Archive for October 2007
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Investors began the morning warily. Trading volume was low and stocks climbed slowly and steadily. Last minute jitters before the Fed announcement sent the major indexes lower. But when the Fed revealed that even an economy growing faster than expected wouldn’t stop it from giving Wall Street the rate cut it was demanding, stocks soared once more. The Dow Jones Industrial Average flew up 137.54, or 1%, to 13930.01. The S&P 500 bounded 18.36, or 1.2%, to 1549.38. The Nasdaq Composite Index rocketed 42.41, or 1.5%, to 2859.12. Volume on the New York Stock Exchange was 1.6 billion shares, which is pretty much standard these days.
The Fed’s statement is largely being read as drawing a line in the sand. “This far we will cut and no further.” It remains to be seen whether they will be believed or whether the Punch Bowl caucus will be back demanding another swipe at the punch before the year is out.
FT Alphaville. Boo!
He tried to get a job at an investment bank, failed and went into hiding for about a year but Aleksey Vayner is back, my bitches, and doing what, you might ask? Trying to find a job. Yes, even people who can bench press one billion pounds on sheer exaggeration alone need some sort of way to pay the rent, and take it from someone who knows, 2-bedroom realities of one’s own making do not come cheap. Mr. Vayner has been making the rounds and just last week interviewed at a fund in New York that would only speak about the life change experience if we promised not to reveal its name, because taking a meeting with this guy (or not knowing who he was in the first place) does not tend to be good for anyone’s reputation.
We’re going to get the most disappointing stuff out of the way first, starting with the fact that Vayner’s no longer sending his CV out in video form. Bull shit, I know. Equally upsetting: AV’s resume no longer makes mention of the book he previously claimed to have written, “Women’s Silent Tears: A Unique Gendered Perspective on the Holocaust.” As a woman and a fan on the Holocaust who often cries inaudibly, I have to say, this one stings, and I’m not really sure what the rationale was behind it. Additional letdowns—he’s now going by “Alex” and is said to have come off as “personable,” “chatty,” and “laid back.” It’s like, who the hell is this guy? Luckily, that only lasted for about five minutes, at which point he took off his normal person mask and became the monstrously arrogant and, dare we say it, sociopathic liar we all know and love.
Was the video he sent to UBS an error in judgment? No, was not an error in judgment, fuck you very much. It was just, in the words of the Maestro, “taken out of context.” Oh, and he’s got another book coming out (ETA, Summer 2008). It’s called the Millionaires’ Blueprint to Success , and is based on Aleksey’s experience with the rich people he met through tennis and skiing. He wrote it because, honestly, he’s read every professional development book out there, and they’re mostly full of crap. Obviously he could do better, so he did (that’s called initiative and the ability to do simple math, just two of the many qualities he offered the firm). Aleksey’s tome—a cross between a hard finance book and a self-help guide—works because it teaches you to “train your mind to have the right attitude toward money, and then shows you how to get it.” Seriously, just buy it, you’ll love it.
You’re probably wondering why Aleksey, who graduated in May, is just now looking for employment. Well wonder no longer—it’s because he was going to go pro in tennis, with a debut playing doubles in the US Open. Unfortunately, his partner hurt his wrist two hours before their match, and though he thought about playing as a single, Aleks just decided he might as well go into finance, at which he is equally if not more so adept.
Earlier: Everything we’ve ever written about Aleksey Vayner.
Aleksey Vayner’s Somewhat Toned-Down Resumé [Word doc]
When Goldman turned in it’s third-quarter earnings and revealed the the credit-crunch was its friend, several eyebrows were raised by market watchers. How could Goldman have made the kind of money it claimed to have made by shorting subprime mortgages, more than person we spoke with asked.
Apparently, the same question is being asked over at the Securities and Exchange Commission. Writing in today’s New York Post, John Crudele reports that the SEC is “curious” about whether Goldman’s traders were tipped off by the firm’s investment bankers, giving them an edge on the market. Interestingly, there seems to be some debate within the SEC about whether or not such tipping would constitute insider trading. We assume the crux of the matter is the technical legal question of whether the notoriously conflict-ridden Goldman could ever commit insider trading. If your clients already know you are on both sides of every trade, can you really be convicted of misappropriating from them?
We’d like to know a question Crudele doesn’t ask: what kind of non-public information could have led Goldman to take on those winning positions?
SEC Eyes Goldman Sachs’ Good Fortune [New York Post]
Tomorrow is the first day of Movember, a charity event started in Australia that gets men to grow mustaches (and ‘stache supporters to sponsor their efforts) in order to raise money for prostate cancer research. In years past, Mo Bro participation from the Aussie branches of Citigroup, Goldman Sachs, Deloitte and PricewaterhouseCoopers has been huge, and nearly 25% of funds generated since the organization was started four years ago have come from finance professionals. With Thursday marking the first time the contest is being held in the U.S., you would think that top banks would be gung-ho about their employees growing hair, just to prove themselves better than one another in a category other than record losses, but, apparently, not so much. We placed some calls today to find out which firms will officially be sporting wool and let’s just say that you should all be performing regular self-exams for early detection, because a cure is not around the corner. When asked if their CEOs would be setting good examples for their minions by growing moustaches this month (and, obviously, contractually obligating the plebes to do so, as well), Bear Stearns, Lehman Brothers and Citigroup all said no, and Goldman Sachs said it’d get back to us but hasn’t (which is probably a no and besides the point: Blankfein promised himself he’d never go back to his hobo days a long time ago). A spokeswoman for Merrill Lynch told us that, like all the other pro-cancer banks in New York, hers would not be asking employees to take part in the event, and reminded us that, at the present time, MER has no CEO on which to grow a ‘stache. When we casually wondered aloud whether or not the last guy to run the company would’ve seen the same fate had he worn some fur, she responded, “maybe not.” And honestly? Girl didn’t sound like she was kidding.
Do you have the ability to grow facial hair and the balls to say corporate culture be damned, I am not down with this life-threatening disease? Send photographic updates on your progress here.
Growing Facial Hair for Charity [WSJ]
In all the talk about losses at individual banks and brokerages, sometimes it’s easy to lose sight of the bigger picture. A report issued by the New York City comptroller yesterday nicely pointed to the forest made up by those trees. The collective profit loss at Goldman Sachs, Morgan Stanley, Merrill Lynch, Citigroup, Lehman Brothers, J.P. Morgan Chase and Bear Stearns was 65%, according to the report. And the damage would have been even worse if not for Goldman’s miraculous/evil genius performance.
New York City, State Budget Outlooks Dim as Wall Street Falters [Bloomberg]
We realize this is kind of last minute, not very well thought out, and a lot to ask of the 20% of you who are still employed and have more important things to do today, but you’ve always said that if we ever found ourselves in trouble and had nowhere else to turn, we could come to you. Well, we’re coming to you—we want to rehire this kid Heath Khan (no relation to Genghis) who used to work here but don’t have the money (maybe if more of you had clicked on the Mike’s ads, we wouldn’t be in this situation). Can someone float us the funds? If we get enough page views with Heath back on the team, there’s a chance we’ll even be able to pay you back in cash at some point in the future, or you could take some equity in the company now. What do you say? Know what we say? Kidding! No one named Heath ever worked here. Little ‘trick’ for you, in honor of the day. Okay, but let’s talk seriously for a second– we really do have a friend who needs your help/charity. His name is Tim and he’s in a major jam. Kid has no clue what to be for Halloween. We know you’ve got ideas for him. The only stipulation is that it doesn’t cost too much, because he doesn’t currently have a source if income, per se. It won’t be hard to top last year’s costume, which was apparently a lumberjack (this was just before Wall Street Warriors became a hit, you see, so the pressure wasn’t really on him to think up something great), but that doesn’t mean you shouldn’t reach for the stars. We’ve come up with a few jumping off points, from which you can either pick one and say “Hey, great, and this is how you execute it, Tim” or come up with your own.
A hedge fund manager (he’s always wanted to be one, and Halloween is a holiday of aspiration)
Neil Cavuto (they’ve got the same hair)
Lolcat Ben Bernanke: I’z up in yer marketz, cutting yer inflation. (That was John’s idea)
A person who’s going to buy his book (so this might just require his regular street clothes, I don’t know)
It’s almost too good to be true. But it is true. Goldman Sachs chief executive Lloyd Blankfein lives in the same building at Merrill Lynch’s ousted chief, Stan O’Neal, according to some at New York magazine who reads DealBook. The address: 941 Park Avenue, on 81st street.
Thanks to a reader, we were reminded this morning of a story in Nassim Taleb’s Fooled by Randomness about the hard working lawyer from Brooklyn. Although he’s a success by almost any measure, he is the poorest member of his Park Avenue Co-Op, and feels lousy about himself. The anecdote is used to illustrate how happiness is not just attained through material success but is also based on relative comparison. Nassim’s point is that over reaching in order to “keep up with the Jones” can lead to excessive risk taking for a trader.
Suddenly, Stan’s obsession with Goldman’s earnings is starting to make sense.
“Just imagine that psychological trauma!” our reader writes. “If only Stan had moved into Jimmy Cayne’s building he would still be CEO of Merrill.”
As Merrill Reels, Goldman Glitters [DealBook]
Hello, Blankfein [New York Magazine]
Alcatel-Lucent deepens job cuts as it posts loss (MarketWatch)
More evidence that ALA-LU has become an ugly competition. Lesses again in the quarter and another 4000 job cuts. Among those leaving is the CFO, who is “pursuing other opportunities”. We’re not sure whether he’s part of the 4000 cut jobs or whether he makes it 4001. Hopefully they’ll clarify that at some point. Seems pretty obvious that CEO Patricia Russo is not long for this job either, though nobody ever thought she was.
Fans go loco for free tacos (Boston Herald)
The Red Sox’ victory prompted quite a bit of underpricing of real assets. First there was that furniture store that was stuck $40,000 because of a promotion it had run earlier in the season pertaining to a Red Sox World Series victory. Then yesterday there were free tacos at Taco Bells all across the country, again because of some Red Sox-related promotion. We didn’t get a chance to hit one up, but we hope there wasn’t any violence, like that time that school district sold underpriced Macs
Crude Oil Falls a Second Day After Goldman Recommends Selling (Bloomberg)
Has Goldman turned bearish on Crude? That’s not clear, but they have told clients to “take profits” on the brown stuff, just as its nearing $100. It’s possible that the drop is related to this call, although it’s also possible it could relate to any number of other things… like the Kurds or Bernanke. That being said, this might be the first time we’ve ever read one of these stories where the movement of oil was associated with an institutional call. To be honest, we didn’t really realize they made calls on this stuff, though, it makes sense… just doesn’t get much attention.
Greenspan warns of further pain for US property prices (Guardian)
Alan Greenspan is warnings that the housing market will get worse before it gets better. But get this, so is Robert Shiller, the creator of the S&P/Case Shiller index to track housing prices. Then again, saying Robert Shiller is negative on housing doesn’t mean a whole lot, since he’s just pretty much a negative guy on housing period. Meanwhile, you have to agree that for the moment, things do like mighty ugly.