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Evening Leaders – Fairholme’s Charles M. Fernandez Steps Down, Brownstein Pled Guilty

Fairholme Top Executive Charles M. Fernandez Steps Down (WSJ)

Charles M. Fernandez has stepped down as one of the key executives at the Fairholme mutual fund, according to a regulatory filing. The filing simply said Fernandez, the longtime right-hand man to Fairholme honcho Bruce Berkowitz, “resigned as an officer and employee of Fairholme Capital Management” effective Oct. 17. Fernandez also stepped down from the board of St. Joe, the real estate company said today.
FAIRHOLME (FAIRX) Bruce Berkowitz
Verizon Earnings Skyrocket (WSJ)
Verizon Communications Inc.’s third-quarter profit more than doubled as the carrier’s growth in contract wireless subscribers outpaced rivals. The company added 882,000 wireless contracts, a 51% improvement from a year earlier. Including prepaid and other customers, the carrier added 1.3 million wireless users, compared with rival AT&T Inc.’s 2.1 million.
Fed Likely to Impose More Easing (WSJ)
Federal Reserve officials are starting to build a case for a new program of buying mortgage-backed securities to boost the ailing economy, though they appear unlikely to move swiftly. The idea would be to target any new efforts by the central bank at the parts of the economy that are most severely impeding a recovery—the housing and mortgage markets—by working to push down mortgage rates.
Murdoch on the Defense at News Corp Shareholders Meeting (NYTimes)
We live-blogged the annual News Corporation shareholders meeting. It’s always a raucous and unpredictable event. Our friends at the MediaDecoder blog have run down five things to watch for at the meeting.
Bridgewater’s Ray Dalio Says ‘I Think I Did Everything Right” (NYTimes)
Ray Dalio, the founder of Bridgewater Associates, didn’t used to do many media appearances. But a series of big magazine profiles that focused on the intense culture of his Connecticut-based hedge fund seem to have eased the billionaire out of his shell. On Thursday, Mr. Dalio appeared on Charlie Rose’s program on PBS to talk about the economy, and to address the accusations that Bridgewater — which is governed by a set of rules laid out in Mr. Dalio’s business manifesto, “Principles” — is a cult of personality.
Groupon IPO Set for Nov 4 (WSJ)
Groupon Inc. set a Nov. 4 date for its long-anticipated IPO, saying it seeks to raise as much as $621 million, valuing the company at up to $11.4 billion. It’s a scaling back of the daily deals company’s earlier plans. Groupon once sought to raise about $750 million to close to $1 billion at a valuation of more than $15 billion. It’s only planning to offer 5% of its shares to the public, a very small percentage that tends to increase the volatility.
S&P Ups Ford Credit Rating (WSJ)
Standard & Poor’s upgraded its credit rating on Ford Motor Co. two notches, moving it closer to investment-grade territory and citing the company’s new labor contract with union workers and expectations of a strong margin and operating cash flow from its global automotive operations. The rating unit of McGraw-Hill & Co. is the second ratings firm to boost its view on Ford in two days, raised its credit rating on the auto maker to double-B-plus, one level below investment grade, from double-B-minus. The firm also removed Ford from credit watch.
Hedge Funds Snap Up Cheap Corporate Bonds (Reuters)
Opportunistic hedge funds are picking up bargains in corporate bonds after a sharp sell-off this summer, preferring the sector to pricey-looking government debt. A number of managers believe credit markets are now pricing in too-deep an economic slowdown and default rates that are too high, and are picking up high-yield bonds in the United States and Europe, often favouring short maturities, as well as senior secured bonds.
S&P Warns of Possible Eurozone Downgrades (WSJ)
Standard & Poor’s Corp. said on Thursday that it would likely downgrade the credit ratings of France, Spain, Italy, Ireland and Portugal if the euro zone slips into another recession, which many economists say is likely.
SunTrust Profits are Up (WSJ)
SunTrust Banks Inc.’s third-quarter earnings rose 41%, as the regional bank increased its loans portfolio and shrank the amount it set aside to cover weaker loans. The Atlanta-based lender, which serves an area that had been hard hit by the real-estate bust, has continued to see its credit quality improve. SunTrust reported a profit of $215 million, or 39 cents a share, up from $153 million, or 17 cents a share, a year earlier. Revenue fell 5.1% to $2.2 billion.
Brownstein Did Plead Guilty for Insider Trading (Bloomberg)
Drew “Bo” Brownstein, the founder and chief executive officer of Denver-based Big 5 Asset Management, pleaded guilty to trading on inside information about a corporate merger. Brownstein, 35, made more than $2.5 million in illegal profits for his hedge fund and for relatives by trading on a tip in advance of Apache Corp. (APA)’s $2.7 billion acquisition of Mariner Energy Inc. (ME) in April 2010, prosecutors said.