The chairman of JPMorgan Chase, Jamie Dimon, was receptive [to the agreement to sell shares of his company to the government], saying he thought the deal looked pretty good once he ran the numbers through his head.
We loves us some Jamie Dimon (congratulations on beating expectations this morning, btw, we’re not ashamed to admit that we were estimating a 99% drop in third quarter profits), and that’s why we’re actually going to take the contrarian view on this one and say its not a harbinger of terrible things come (and it’s not like he can acquire Jimmy Cayne’s bong water again) but the new direction of banking, for the betterment of the industry. Yeah, he had a gun pointed to his head but had obviously done his due diligence already, in the 30 seconds between reading the terms and Bald threatening in no uncertain terms to palm his skull like a basketball if he didn’t sign on the dotted line. This would be the same DD that went into BAC’s acquisition of asbestos-riddled Countrywide, Joe Lewis’s decision to float Jimmy Cayne some money around March, the Germans transfer of a bunch o’ bills to Lehman the day it filed for bankruptcy, and Steve Cohen’s “What are friends for” loan to Gary Busey a few eons ago during a weekend in AC (which the Buse would really be doing the big guy a solid if he could pay back stat).
Drama Behind a $250 Billion Banking Deal [NYT]
Too incomprehensible. Didn’t read.
Too incomprehensible. Didn’t read.
Little-known fact about your tag: Vikram Pandit can’t read. At all. But he talks such a good game* that Bob Rubin couldn’t help but give the guy keys to the store.
*Either that or the damn “Citi never sleeps” voice has hypnotized me into thinking so.
Was there an assurance that either their brains or their signature would be on the paper?
Was Luca Bratzi there?
I have always found it difficult to completely trust business people who allege they can do complex math in their head. Isn’t all that “smartness” what got us into the financial mess we are in now?
Too incomprehensible. Didn’t read.
@1/2- too stupid to not know how to only post once, so didn’t read.
@5, Who said it was complex? Not sure they even had a choice.
What was so hard about the math? Let’s see…Goldman Sachs is paying Buffet 10% plus a crapload of warrants.
The taxpayer is only charging 5% – which, hell, is only a little more than 3 mo Libor, and is taking fewer warrants. Plus, if things turn positive, we can cash the silly taxpayer out.
What I really like is how this is structured like a subprime loan. “Hey, it’s just 5% interest for the first 3 years, then it resets to 9%. But – hey – asset values always go up and you can always refinance sometime in the next 3 years. It’s a NO LOSE situation!”
I’m with #9 – it wasn’t “complex math” by any stretch of the imagination.
Senator Pat Geary: I want your answer and the money by noon tomorrow. And one more thing. Don’t you contact me again, ever. From now on, you deal with Turnbull.
Michael Corleone: Senator? You can have my answer now, if you like. My final offer is this: nothing. Not even the fee for the gaming license, which I would appreciate if you would put up personally.
Senator Pat Geary: I can get you a gaming license. The price is $250,000.
Michael Corleone: Now, the price of a gaming license it less than $20,000. Is that correct?
Senator Pat Geary: Yes.
Michael Corleone: So why would I ever consider paying more than that?
Senator Pat Geary: Because I intend to squeeze you.
In proper order…
Senator Pat Geary: I can get you a gaming license. The price is $250,000.
Michael Corleone: Now, the price of a gaming license it less than $20,000. Is that correct?
Senator Pat Geary: Yes.
Michael Corleone: So why would I ever consider paying more than that?
Senator Pat Geary: Because I intend to squeeze you.
Senator Pat Geary: I want your answer and the money by noon tomorrow. And one more thing. Don’t you contact me again, ever. From now on, you deal with Turnbull.
Michael Corleone: Senator? You can have my answer now, if you like. My final offer is this: nothing. Not even the fee for the gaming license, which I would appreciate if you would put up personally.
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