The Ticker

Three is a trend right? Well, today's Wall Street Journal (sub. req.) is chock full of bad news hitting the top 1 percent. A quick round-up:

India's 'King of Good Times' Puts His Realm at Risk

Times are tough for India's "king of good times."

Vijay Mallya's United Spirits Ltd. and Kingfisher Airlines Ltd. have made him one of India's wealthiest and most-recognized businessmen -- an image he cultivates with a Formula One auto-racing team, parties with Bollywood actors and liberal use of his nickname. Yet this week, with his airline logging millions of dollars in losses and United Spirits' liquidity dropping sharply, Mr. Mallya and his partners put some of their own shares on the line to keep both businesses afloat.

Irish Mogul's Empire Totters As Slump Tames Celtic Tiger  

 Sir Anthony O'Reilly long has been a symbol of Irish resurgence, a national rugby hero and raconteur who conquered the U.S. corporate world before returning home to oversee a sprawling business empire. That empire now shows signs of unraveling.

Sir Anthony, once America's highest-paid chief executive while leading H.J. Heinz & Co., has seen the value of his holding in his Dublin-based global newspaper group, Independent News & Media PLC, plunge to $52 million from more than $1.1 billion just 18 months ago.

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Among the more retro trends inspired by the ongoing banking crisis is the creation of super-star analysts who punch above their weight class in terms of exposure and influence. As the banking and credit mess heated up, Meredith Whitney of Oppenheimer & Co. and Richard Bove of Ladenburg Thalman both emerged as closely watched voices who called problems in the sector ahead of time. Both changed jobs this week as a direct result of the ongoing saga in the industry they follow.

Whitney is striking out on her own at the Meredith Whitney Advisory Group specializing in bank research, and the FT reports she'll also apply for a broker-dealer license. Whitney rose to prominence in late 2007 when she warned Citigroup would have to cut its dividend and raise capital. That call sent Citigroup's shares slumping, and the bank did cut its dividend in January 2008. For the record, Whitney is still bearish on the sector, and predicts more capital raising will be needed before the crisis ends. This time, she'll be cashing in as the financial sector rebuilds. (She also made our list of Top 25 Market Movers.)

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Is anyone out there still trying to catch the falling knife that is shares of U.S. home builders? It's tempting to watch the stocks drop like rocks and think, "I'll get back in when the damage is done." Well, investors have been saying that (and getting burned) for a good chunk of the last year. The optimists are in for more pain. At this point, buying shares of homebuilders is largely a bet that the bottom is close for the housing market. It isn't, so you shouldn't. Here are 5 reasons to keep avoiding the sector:

Obama's foreclosure plan is no help for Wall Street. The $75 billion plan could help nine million Americans avoid foreclosure. That's good news if it works, but investors looking for a chance to bottom-feed on builders are disappointed today. The SPDR S&P Homebuilders ETF (XHB) is down more than 2 percent today and more than 15 percent so far this year.

Home sales are still plunging. Today we get housing start data for January, and it's uniformly grim. U.S. builders began construction on the fewest homes on record during the month. Starts slumped 17 percent to an annual rate of 466,000, the Commerce Department said. Goldman Sachs economists called the drop "shocking" by itself, and even more troubling since it's the third straight month of double-digit declines in sales.

[See also: Good New For Stocks: Earnings Expectations Look More Reasonable]

Leadership is lagging. Luxury builder Toll Brothers normally trades at a premium to the rest of the group, but earlier this month Citigroup's Josh Levin noted that Toll had slipped below both its peer group and its book value. Part of the reason, he says, is worries over the impact of the falling stock market on buyers for higher-priced homes (They're unfounded, Levin says, because home buyers worry more about income than net worth when buying a home). There's still a case against Toll, however, since pricey homes aren't going to be moving anytime soon.

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Robert Allen Stanford, head of Stanford Financial Group, looks like he's about to replace Bernard Madoff in the financial scandal headlines. His "massive ongoing fraud" in selling some $8 billion worth of high-yielding certificates of deposit from an Antigua-based bank has regulators coming after the Houston-based financial company. Federal agents raided his offices Tuesday morning.

From the NYT:

In the complaint, filed in Federal District Court in Dallas, the S.E.C. accused Mr. Stanford and two associates — James M. Davis, a director and chief financial officer of Stanford Group and the Antigua-based bank affiliate, and Laura Pendergest-Holt, the chief investment officer of both organizations — with misrepresenting the safety and liquidity of the uninsured C.D.’s.

The C.D.’s were sold by Stanford International Bank through the firm’s registered broker-dealer and investment adviser, which are in Houston. Both the bank, which claims $8.5 billion in assets and 30,000 clients in 131 countries, and the brokerage unit, which operates about 30 offices in the United States, were named in the S.E.C. suit. Stanford Financial asserts that it advises about $50 billion in assets.

The WSJ links to the SEC's statement on the charges, and points out that it appears Stanford lost money in the Madoff scandal. From the WSJ:

The SEC said that Stanford suffered losses in the alleged Madoff fraud, contradicting Stanford's assurances to its investors that it had no direct or indirect exposure. According to the SEC, Messrs. Stanford and Davis were told on Dec. 15 that Stanford companies had a loss of roughly $400,000 based on indirect exposure to Mr. Madoff.

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