Write-Offs: 05.25.12

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$$$ Spain to inject up to €19bn into Bankia [FT]

$$$ New Democracy, Syriza Tied In Greek Race For First, Poll Says [Bloomberg]

$$$ “Banks get to play a fun game every quarter that could be called Guess the Value of Your Assets! JPMorgan Chase plays it more than its peers.” [DealBook]

$$$ “This study proposes a novel framework for capital regulation that addresses banks’ incentives to take on excessive risk and leverage. The framework consists of a special capital account in addition to a core capital requirement. The special account would accrue to a bank’s shareholders as long as the bank is solvent, but would pass to the bank’s regulators — rather than its creditors — if the bank fails.” [FRBNY]

$$$ “Barry also had a knack for interceptions. When a joint was making the rounds, he often elbowed his way in, out of turn, shouted “Intercepted!,” and took an extra hit. No one seemed to mind.” [DI]

$$$ That’s it for us today. We’re off Monday for the holiday, enjoy the long weekend and see you on Tuesday!
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    • 25 May 2012 at 1:59 PM

    The Bar Has Been Set For Lengths Gone To In Order To Secure Seed Capital

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    Home?

    Want to get in shape? Want to save money? Want to hole up and pound out a business plan for the [hedge fund/private equity firm/boutique investment bank/whathaveyou] you want to get off the ground? Want to impress industry execs and potential investors with your problem solving skills and can-do attitude? What if we told you there was a foolproof way to accomplish all those goals and more, that it wouldn’t cost you a thing, that you might even have some fun doing it, and that there’d be free cereal and Coke involved? Would that sound like something you’d be interested in? Then, congratulations, you’re already halfway there. Step 1 was getting on board, Step 2 is finding an investment bank or asset management firm that’s lax on night security and moving in. Continue reading »

    A Running List Of Things That Do It For Silvio Berlusconi

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    Should you ever find yourself in a situation in which knowledge pertaining to the arousal triggers of the former Italian prime minister would come in handy, whether it’s bar trivia night or one of his bunga bunga parties, try and remember that Silvio likes (underage prostitutes dressed as):

    1. Nuns

    2. Communists

    3. President Obama Continue reading »

    • 25 May 2012 at 11:23 AM

    Some People Were Selling Facebook On Friday

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    There’s this interesting article in the Journal today about how quickly and expensively short sellers managed to find shares of Facebook to borrow, including a graphic showing that like 150 million shares were shorted on Friday, at -10% to -40% rebates, which, what? Anyway you should read it; I for one was surprised that that much borrow came online so quickly and so share the Journal’s suspicion that some of the locates given by prime brokers were a little aggressive? Or something.

    I’m less willing, though, to view the basic transaction the way the Journal does:

    The role of the firms in enabling short sellers in Facebook’s stock shines a light on a long-standing Wall Street business that has the potential to create conflicts of interest. Even as one arm of a brokerage firm is getting paid to drum up interest in a stock, another part of the firm could be earning big profits by helping bet that the stock will fall in price.

    “In general, Wall Street has conflicts of interest, and conflicts of interest are profitable,” said Daylian Cain, a Yale School of Management professor of business ethics. “It’s hard to navigate them when there are millions of dollars at stake.”

    Two things are worth noting here. First of all, this is the sort of “conflict of interest” that comes inextricably from being a market intermediary: some of your clients want the one thing to happen, others want the other thing to happen, and the things are often – normally in secondary market trading – mutually exclusive. Continue reading »

    • 25 May 2012 at 10:45 AM

    JPMorgan Risk Committee Directors Big On Life Experience, Wall Street Experience Less So

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    The three directors who oversee risk at JPMorgan Chase include a museum head who sat on American International Group Inc.’s governance committee in 2008, the grandson of a billionaire and the chief executive officer of a company that makes flight controls and work boots. What the risk committee of the biggest U.S. lender lacks, and what the five next largest competitors have, are directors who worked at a bank or as financial risk managers. The only member with any Wall Street experience, James Crown, hasn’t been employed in the industry for more than 25 years…The committee, which met seven times last year and hasn’t changed its composition since 2008, approves the bank’s risk- appetite policy and oversees the chief risk officer, according to the company’s April 4 proxy statement. [Bloomberg]

    Opening Bell: 05.25.12

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    J.P. Morgan Unit Made Risky Bets on Firms (WSJ)
    The JPMorgan unit whose wrong-way bets on corporate credit cost the bank more than $2 billion includes a group that has invested in financially challenged companies, including LightSquared Inc., the wireless broadband provider that this month filed for Chapter 11 bankruptcy protection…The Special Investments Group last year took a $150 million stake in closely held LightSquared, in a deal that J.P. Morgan lost money on, according to a person familiar with the bank.

    Both Campaigns Seize on Romney’s Years at Bain (NYT)
    …the Romney campaign is actively recruiting testimonials from workers who have had positive experiences with Bain. It is getting ready to release advertising highlighting Bain’s marquee success stories, like the turnaround of Staples. It is considering seeking out middle-class surrogates — a fireman or members of a teachers union, for instance — who would be willing to talk about how Bain managed and increased the size of their pension funds, a lesser-known aspect of private equity…Mr. Romney’s advisers are betting that if they stay out of the nuances of private equity and tell a story about turning around failing companies, they can transform the Bain attacks into a narrative that underscores Mr. Romney’s image as a skilled executive who can steer a troubled economy back to prosperity.

    ECB Official: On Greece, ‘We Are Working on Plan A’ (CNBC)
    “It’s our strong preference that Greece stays in the euro zone…We are working on plan A,” Joerg Asmussen said in the interview yesterday. “I always work on plan A. I am not speculating, I am working to make plan A successful,” he added.

    What Would A Greek Exit Mean For The US Economy? (Reuters)
    usiness investment would stall, banks would pull back on credit, and lost wealth as equity prices fall would cause consumers to slow their spending. Commodity prices would plunge, helping importers but hurting growth in export economies.

    Merkel May Be Persuaded On Euro Debt-Sharing Compromise (Bloomberg)
    Chancellor Angela Merkel left the door open to a compromise on debt sharing in the euro area as Italian Prime Minister Mario Monti said he can help bring Germany round to acting in Europe’s “common good.”

    Short Sellers Find Friends In Banks (WSJ)
    As traders at Morgan Stanley were frantically trying to shore up Facebook Inc.’s FB share price following the company’s initial public offering, other managers on the deal were helping short sellers bet that the newly minted stock would fall. Trading desks at Goldman Sachs Group and J.P. Morgan Chase, two of the firms that helped Morgan Stanley underwrite the IPO, were among those lending out Facebook shares that hedge funds needed for short sales, according to people familiar with the matter. While it isn’t uncommon for Wall Street firms to make shares available for shorting on IPOs they manage, Morgan Stanley, the lead underwriter, didn’t lend shares, according to people familiar with the matter.

    Escaped monkey holds up flight at JFK for hours (NYP)
    Monkey business held up a Beijing-bound flight at Kennedy Airport nearly four hours yesterday.
    A monkey escaped its crate in the cargo hold of an Air China Boeing 747 scheduled to leave Terminal 1 at 4:50 p.m., said Port Authority police. Port Authority emergency services officers and an airport worker caught the monkey and handed it over to the airline. The animal never got out of the jet’s cargo hold. The foot-tall monkey was one of about 50 to 60 being shipped to China for medical research, said police sources. “He was a slippery little beast,” one source said. Continue reading »

      Write-Offs: 05.24.12

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      $$$ European Economic Outlook Dims Amid Leaders’ Impasse [NYT]

      $$$ U.S. Bank Lending Falls, Profits Rise [WSJ]

      $$$ Buffett’s Goldman Deal Is Topic in an Insider Case [DealBook]

      $$$ Study Finds Germans Incapable of Enjoying Life [Der Spiegel]

      $$$ This happened:

       

      $$$ Man who formerly claimed to be a “certified member of the quiet society of pimps” and asked to be certified as an expert witness in pimpology now says “I was a failure as a pimp. I was a much better car salesman, I was a much better telemarketer, I was much better when I was selling mortgages by phone. I really wasn’t very good at it. A lot of it was exaggerated.” [NYP, earlier]
      Continue reading »

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        • 24 May 2012 at 7:06 PM

        Dick Fuld Attends Hockey Game Without Getting Into Physical Altercation

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        One tale many love to tell about Richard S. Fuld, besides the one involving him destroying an 158 year-old institution, is that of the time he got into a fistfight at his son’s hockey game, with a parent from the opposing team. Though there have been many stories over the years of adults who lack impulse control throwing down at their children’s sporting events, perhaps people were fascinated by the fact that the the CEO of a public company was unable to reason that punching someone in the face at a Peewee hockey game (or anywhere in public? or anywhere period?) = bad, keeping your hands to yourself = good.  On that note, one sports fan reports that Fuld has since matured, and realizing his own limitations, now travels with protection (for himself/spectators in his section). Continue reading »