Bear, Citi, Goldman, Buffett, Hedge Funds, Some Good News

The Wall Street Journal reports that UK billionaire financier Joseph Lewis has accumulated even more of Bear Stearns stock. Entities controlled by Lewis now own 9.6% of the firm.

Bloomberg reports that Goldman Sachs is forecasting that Citi may need to cut its dividend by up to 40% in order to 'preserve its capital position'. The firm, which is struggling after billions in asset write-downs this year, is currently reviewing its business operations with a view to cutting back costs further. Rumours are circulating that 2007 investment banking bonuses are to be under severe pressure.

And shares in Goldman itself have enjoyed a somewhat rocky ride recently, as concerns grow that the firm's stellar fiscal 2007 performance will not be repeated in fiscal 2008. Investors are also thought to have become worried about Goldman's so-called 'terrible' November, and some wonder how the firm will fare in the coming weeks.

Bloomberg reports that Warren Buffett has confirmed that some unnamed banks and securities firms had approached him recently about taking strategic investments. Buffett said that, to date, none of the deals caused him 'to start salivating'.

The New York Post quotes Chris Whalen, who runs The Institutional Risk Analyst newsletter, who said that it may soon be the turn of hedge funds to start owning up to their subprime lending-related problems. More shocks could be in store.

And finally, Bear Stearns Chief Investment Strategist Jonathan Golub has said that he expects the US to avoid recession in 2008, as a 'stable' job market will keep Americans spending.

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