Tuesday (1/10/12) Pre-Market News: RBS Cutting 5K IB Jobs

    Every morning the Street of Walls team puts out an update on market levels, today’s top stories, and active M&A deals.

    Today’s Top Stories:

    • European Banks Aren’t Cheap: While fundamentals are poor/uncertain, valuation is more attractive, but at its heart the banks remain a call on a 2012 recession http://bit.ly/wn9o1h
    • AA Earnings: AA reported Q4 adjusted EPS from continuing operations of -$0.03; “Overall results were negatively impacted by lower LME prices, ongoing weakness in European markets, seasonality and higher costs” (UBS)
    • Hedge Funds Miss Rally: Rallying stocks have done little to entice professional money managers back to U.S. equities http://buswk.co/w3xQq4
    • Consumer Credit: Consumer credit popped up $20.4bn (0.8%) in November, which was the largest monthly increase reported since 2001
    • Gov’t Housing Deal in the Works: The Obama administration, in conjunction with federal regulators and led by the overseer of Fannie Mae and Freddie Mac, is very close to announcing a pilot program to sell government-owned foreclosures in bulk to investors as rentals, according to administration officialshttp://bit.ly/yjc4Wf
    • BBVA Write-down: says it will write down goodwill on its U.S. operations to reflect lower-than-expected growth at the unit, resulting in a €1 billion hit to its 2011 earnings
    • RBS Scaling Down IBD: RBS on Thursday will detail how it plans on scaling back its investment banking unit.  As many as 5,000 jobs could be cut (FT)
    • RBS Restructures IBD: RBS investment banking is having some serious issues.  Late in 2011 RBS announced plans to restructure their investment banking unit, the restructuring is likely to be an ongoing theme for the UK banking sector with regulation and ICB remaining an overhang on returnshttp://bit.ly/w7tSJW
    • BAC MD Cuts: Bank of America Merrill Lynch aims to cut about 20% of its Asia-Pacific managing directors by the end of the first quarter (WSJ)
    • Fortress Buys BOX: After market close on Friday, Fortress Investment Group disclosed a 41.6% ownership of the outstanding common stock of SeaCube Container Leasing Ltd. (NYSE:BOX)http://bit.ly/yzHJkf
    • Highbridge Adds DUNRD: Glenn Dubin’s Highbridge Capital Management has disclosed a 5.33% ownership of the outstanding common stock of Dune Energy, Inc. (OTC:DUNRD) http://bit.ly/yWNeW0
    • 2012 M&A Market: “our risk arbitrage team has interesting sector by sector thoughts on 2012 M&A activity.  Overall look for 2012 to be less M&A than 2011.   Technology, healthcare, and internet & media/telecom services appear likely to be the most active sectors for M&A in 2012.” (Barclays)

    M&A Watch:

    Should You Go All In On Water Like Michael Burry?

    Water investments? Michael Burry was one of the first institutional investors to bet against the US subprime mortgage market in the mid-2000s, and today he’s concentrating all of his investment efforts on one commodity: water. Burry’s focus on water has attracted plenty of attention to the commodity in the investment community but trying to profit Read More

    • PE Deals of the Week: The Gores Group, a leading LA-based private equity firm, announced that through an affiliate it has signed an agreement to acquire The Hay Group http://bit.ly/ApTlXr
    • Morgan Keegan Deal: Reuters reports that RJF is the lead candidate to buy Morgan Keegan from RF
    Disclosure: I do not have a position in any stocks mentioned in this article, do not have a plan to initiate a position within the next 72 hours.
    Disclaimer:  The information, opinions, material, and any other content provided in this article is for informational purposes only and is not to be used or considered an offer or solicitation to buy or sell securities, investment products, financial instruments, or to participate in any particular investment strategy. The information, opinions, material, and any other content provided in this article does not constitute as a recommendation or as advice to buy or sell securities, investment products,  financial instruments, or to participate in any particular investment strategy.