So much for 10,000: Still a lot of bears out there, and the mish-mash of an earnings report from Citi hasn't helped. Dow is down about 25 points in early trading.
Foreclosures still high: California had the third-highest foreclosure rate in the third quarter, with one out of 53 homes receiving a filing (Nevada and Arizona had higher rates). September filings in the state fell 6.5 percent from August but were up 24 percent from September 2008. (RealtyTrac)
Calpers and "middlemen": The review by the California giant pension fund centers on the role of placement agents hired by money managers seeking big investment dollars. At the center of the inquiry is Alfred Villalobos, who served on the Calpers board from 1993 to 1995 and runs Arvco Financial Ventures. From the Sacto Bee:
A thick stack of records released by CalPERS shows the fees paid to Villalobos by three investment firms: Apollo Management of New York; Aurora Resurgence Capital Partners, chaired by well-known California business and political figure Gerald Parsky; and Ares Management, a Los Angeles firm.
Guess who pays?: State and local governments are bound to make up for the Calpers investment losses of more than $50 billion. From the WSJ:
In the Orange County city of Fullerton, officials said they were notified by Calpers in August that their city would have to pay a total of $5.5 million more in the four-year period beginning in 2011 to fully fund city employees' retirements. The city, which passed a balanced budget in June that included a hiring freeze, has already dipped another $4 million into the red and now plans to cut employee pay by an as-yet-undetermined amount. "The bottom line from my point of view is that just about the time we will start to see a recovery in 2011, we are going to have this huge additional cost," said Fullerton City Manager Chris Meyer.
Rich get richer: For a banking giant that was on death's door just a year ago, Goldman Sachs is sure looking good. The firm's third-quarter results topped expectations. CEO Lloyd Blankfein sees "improving conditions and evidence of stabilization, even growth, across a number of sectors." (NYT)
And at Citigroup?: Not so hot. That other banking giant, still under strict supervision from the feds, reported a 27-cents-per-share loss for its third quarter. But credit card losses and costs on delinquent loans shrank rather than rose and that's a good thing.(DealBook)
Mattel clears claims: The El Segundo-based toy giant settled a group lawsuit by consumers over recalled Chinese-made toys that contained excessive levels of lead. The settlement provides "tens of millions of dollars in monetary relief," plaintiff law firm Whatley Drake & Kallas said in a statement. (Bloomberg)
Guilty plea in Ponzi scheme: Bev Hills investment advisor Michael McCready admitted to swindling at least 25 clients out of $9 million - money that he used to bankroll girlfriends' businesses and finance a movie. From the LAT:
Starting in 2004, McCready began using clients' funds as a personal bank account, according to the plea agreement. He spent the money on cars, girlfriends and a trip to the Super Bowl. McCready also used the money to run his advisory company and pay off other clients who were requesting money.