If you walk by Bear Stearns Madison Avenue headquarters tomorrow, you might catch a glimpse of former chief executive Jimmy Cayne on the street.
Unfortunately, we’re not privy to Cayne’s personal schedule. Rather, we know that Geoffrey Raymond, Wall Street’s most important artist, will be displaying his latest masterpiece, a portrait of Cayne, outside the headquarters at 383 Madison. He’ll be asking people passing by to annotate the painting with their thoughts about Bear Stearns and its former leadership.
In the past, Raymond has created similar portraits of Lloyd Blankfein, James Cramer (twice), Eliot Spitzer and Erin Burnett. He first came to DealBreaker’s attention when he appeared outside of the New York Stock Exchange with a portrait of former NYSE head Dick Grasso.
Earlier: Our previous commentary on Raymond’s paintings.
Elsewhere: Raymond’s personal website, The Year of Magical Painting.
Archive for May 2008
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SEC
Weird, Useless And Dangerous Shareholder Proposals On Universal Health Care
By John CarneyAs Opening Bell mentioned this morning, shareholder democracy took a turn for the weird recently when the Securities and Exchange Commission began telling major public corporations that they would have to subsidize shareholder proposals urging the company to take a lobbying position in favor of universal health care. Boeing, General Motors, United Technologies, Wendy’s International and Xcel Energy have all received word from the SEC that they’ll have to include these shareholder proposals in the official proxy materials, according to the New York Times.
After the jump, we explain why these proposals are useless, at best, unduly costly and possibly dangerous. Also: a law professor explains better ways to handle these things.
Kirk Wright, the hedge fund manager convicted of 47 counts of fraud and money laundering, whose clients included pro football players and his mother, and who faced as much as 710 years in prison plus a fine of up to $16 million, committed suicide in his jail cell on Saturday. Betty Honey, an investigator with the Fulton County Medical Examiner’s office, said Wright hanged himself, and that no foul play is suspected. Obviously, this is extremely sad for all involved, even those of us just reading/writing about the event. Moving forward, so we (family, friends, strangers with candy) don’t have to experience this sort of pain again, anyone awaiting sentencing (Moz?) should take his/her cue from convicted tax evader, Wesley Snipes.
The departures of two senior Bear Stearns executives from JP Morgan Chase may signal problems with the value of the Bear Stearns mortgage portfolio. Over the weekend Henny Sender of the Financial Times reported that Jeff Mayer and Craig Overlander, the two men who had been in charge of the fixed income arm of Bear Stearns and were named vice-chairman of JP Morgan’s investment bank shortly after the acquisition of Bear was announced, were headed out the door.
Sender’s report cites “question” about the value of the mortgage book, and is written in a weird negative way. The men are leaving for reasons “not exclusively” related to the mortgage book. Which apparently means “but pretty much” related to the mortgage book. At least that seems to be the favorite read of most people watching the move.
Bear duo quit new JPMorgan jobs [Financial Times]
At the end of last week we saw something of a bear run at Lehman Brothers, with traders pushing the stock down 6.2% on Friday. Options traders bought heavily in out of the money puts, including some heavy buying in some really far out of the money options that bet the stock will drop at least another ten dollars.
This morning both Bank of America and Sanford Berstein slashed their earnings estimates for Lehman. Many investors now expect Lehman to post a loss for the quarter. The price of default protection on Lehman debt blew out to 246 basis points.
Some are now saying that Lehman will have to engage in another round of capital raising to shore up its balance sheet and reassure investors that it won’t face a liquidity crisis. At the more extreme end of the bearish outlook, some are saying that Lehman might already be talking to the Federal Reserve about emergency measures.
“With the sinking dollar, my bet is that these guys are already talking to the Fed in a similar bailout that was fashioned for Bear Stearns,” an anonymous market watcher tells Christopher Cruden, the founder of Swiss hedge fund Insch Capital Management.
That’s some pretty wild speculation coming from a totally unknown source. But these are wild times, and unknown sources have made some pretty spectacular and spectacularly right calls in recent months. We just thought we’d pass it along.
Update: A spokesman for Lehman categorically denied the wild speculation.
Recession still likely in US, says Greenspan (FT)
So Greenspan says there’s a better than 50 percent chance of a recession in the US. That’s fine, the sage is certainly entitled to offer up his opinion to the Financial Times whenever he likes. Here’s the question though: What’s he doing about it? No, not in terms of stopping it, but in terms of profiting from it. Is he, for example, buying recession contracts on Intrade at $.40? He should be. Or is he just talking and advising and consulting and generally making more money by pontificating than by acting? Just asking.
Lost Opportunities Haunt Final Days of Bear Stearns (WSJ)
This is kind of the equivalent of the “Blog-Post Confidential” story in the NYT Magazine this weekend, except its Tuesday morning in the WSJ and its about Bear Stearns. But it’s sure to get a lot of buzz, even if it is, in a sense, “history”. The basic premise: Bear Stearns had plenty of opportunities to save itself before going down in flames, but for one reason or another it missed each one — often due to management misgivings. For those who insist on seeing every downfall as somehow Shakespearean, this should be some good fodder.
Vodafone CEO to step down; company back to profit (AP)
Arun Sarin, the longtime boss of global telecom giant Vodafone is stepping down. As for why? Well: “(I) felt the timing was right to hand over as the company is in a good position strategically.” At least officially, there’s nothing overly interesting to interpret about the story. Sarin will be replaced by his lieutenant Vittorio Colao.
LG Looking at GE Appliance Unit (WSJ)
So, which East Asian manufacturer will buy GE’s appliance unit? That’s really the big question. LG? Check, could happen, according to its CEO who says they’re looking at the unit. Hitachi? Nope, not interested according to its CEO. But who knows what can be done at the right price. Haier? Yes, apparently they’ve made a bid. Are we forgetting anyone?
$$$ A reaction to this. [craigslist]
$$$ Maxine Waters Threatens to Nationalize Oil Companies [CWS]
$$$ ESPN Ultimate Remote [1-2]
$$$ In the mood to overcompensate? [TSC]
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