JP Morgan has taken a hatchet to Bear Stearns’ foreign exchange business, with 62 of 73 positions set to be “put on notice,” according to a Forex Factory story citing “a senior Bear Stearns official.”
Both the New York and London offices of Bear Stearns have been slashed. In New York, 28 out of 34 people working in foreign exchange are expected to receive this week what Forex Factory describes as “consultation letters.” In London, 33 of the 39 team members received notification last week that they had entered a consultation period. It’s unclear how many of these “consultations” will result in job cuts or offers for positions. Apparently some have been offered positions at JP Morgan but turned them down because they were a lower levels—and presumably paid less—than their positions at Bear Stearns.
“Bear Stearns’ New York trading operations have almost ground to a halt, with the FX team handling only 1% of its pre-takeover commerce,” Forex Factory reports.
Bear Stearns gets the axe [Forex Factory]
Archive for May 12th, 2008
Listen, we talk a lot of shit about Citi here, and I highly doubt that’s going to stop any time soon. But let’s just all agree that the C’s got a new contrarian indicator and she’s telling us to buy. Big time. And that contrarian indicator is: Meredith Whitney. Crazy? Yes. Implausible? No. Here’s why.
As she’s wont to do, Whitney recently offered what can be interpreted as largely negative statements about Citi, following the bank’s announcement that it promises to begin realizing its “enormous potential.” She even upped the ante a bit, moving from “you will suck until you do exactly what I tell you to do” to “you will suck no matter what you do so just give up and die.”
Specifically, Whitney said today that CEO Vikram Pandit faces “an impossible feat” in trying to turn the diversified whorehouse into a profitable company. Not surprisingly, Mistress Meredith recommended that investors sell their shares, noting that “they don’t have the revenue power [and] they don’t have the earnings power in so many of their businesses.” She also took issue with the lack of details in Vikram’s Friday morning presentation, entitled, “Locating The User Manual To This Bitch.” All valid, if not predictable, points. Whitney lost us, however, when she started in with the jokes.
“Even Stephen Hawking could not pull this off,” she said. And that’s true—Stephen Hawking, who to our knowledge has never attempted to underwrite any subprime debt, probably couldn’t singlehandedly turn that dump into something resembling a solvent company. It’s just slightly disconcerting when your most vociferous critic, who’s supposed to be offering reasoned, sober analysis is playing to the Borscht belt. She might as well have said, “Even Chuck Norris could not pull this off.” (In fact, if yuks are her new schtick, she should have gone with Chuck Norris.) Anyway my point is that while we will continue to be unrelenting in our mockery of Shittygroup, you should take this as a sign to back up the truck and buy this bitch. And reserve your seats from Meredith’s debut at the Laugh Factory’s monthly open mic night pronto.
Citi’s Pandit Faces `Impossible Feat,’ Whitney Says [Bloomberg]
Time Warner Inc.’s HBO cable network is thisclose to reaching a deal to have its programming delivered through Apple’s iTunes. Portfolio broke the story this morning, noting that when the deal is announced it will be the first time Apple agreed to a different price structure for a content provider.
The details are still vague, but HBO apparently got a better deal than other content providers. “One possibility is that HBO programming will have a higher retail price than the flat $1.99 fee Apple currently charges for video content; another is that HBO will receive a larger cut of the same flat rate than other iTunes content providers receive,” Portfolio’s Josh Saul writes.
Although both companies are likely to bill the agreement as a victory—Apple gets more content and HBO more distribution—the deal could inspire other content providers to seek better deals from Apple. Many of those who have struck deals with Apple are reportedly dissatisfied, arguing they should be getting better economics from Apple, which makes money both on the distribution of content through iTunes as well as the sale of iPods and iPhones.
HBO In Your Pocket [Portfolio.com]
It’s Monday and you know what that means—another exciting round of Who Said It?. This week’s entry is based in part on a letter sent out on Friday by a very important person, about a very important task. After the jump, you’ll find two excerpts from said memo. One is real, one is fake, based on the original but slightly altered for our purposes. Correctly identify which is which and there’s a letter of recommendation by us for you to Nick Maounis, re: why he should let you get in on his new cash cow, minimum net worth requirements waived.
It is well known that smart people—particularly the subset of the intelligent sometimes called intellectuals—tend to overrate the role of intelligence in providing solutions to social problems. This was on display in lurid colors in Gretchen Morgenson’s Sunday column in the New York Times lamenting the lack of “an intelligent and comprehensive plan for dealing with mass foreclosures and the economic consequences associated with the [credit crash] debacle.”
Morgenson goes to great lengths to draw comparisons to New York City’s bankruptcy crisis in the midseventies—which, as she says, was avoided in part by a cabal of government officials and bankers conspiring to refinance the city’s teetering debt structure. But she goes too far in reading a greater lesson into this story. It becomes almost a fairy tale of intellectualism, in which well intentioned intellectuals swoop in from their glass and steel perches to rescue capitalism from its tendency toward anarchy. The idea that no rescue plan outside of permitting market processes to operate is available is reduced to “doing nothing.” A better way must be available because “America is full of smart and caring people!”
We’re second to no one in our appreciation of the smart and caring—we’re not supposed to call them the “best and the brightest” anymore—Inhabiting these Untied States. Unfortunately, we have stubborn memories that insist on recalling the fact that the mortgage crisis that set off the broader credit crisis has its origins in the plans of the smart and caring to expand homeownership beyond the levels established through market processes. Perhaps its time to give “doing nothing” a chance.
Big Rescues Can Work. Just Ask New York. [New York Times]
It’s almost summer and you know what that means—DealBreaker is looking for one or two lucky individuals to be our interns and, if you play your cards right, it might just be you. Basically, it boils down to willingness for, nay a passion to excel at, picking up Carney’s dry cleaning. Are you man enough for the job? If not, please seek alternative employment via the DB Career Center. For those of you up to the task, read on.
- Use the Bloomberg command
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