John Thain isn’t the only one out of a job. Apparently all Bank of America equity research 1st years were laid off today.
Archive for January 2009
Charlie Gasparino reports that John Thain is to leave Bank of Amerrillwide, effective immediately. Tom Montag leaving, too.
Update: BoA claims Montag is staying.
As previously mentioned, Ken Lewis is supposed to be holding an “emergency” meeting right now to discuss John Thain’s future, or lack thereof, at Bank of Amerillwide. As recently as an hour ago, most of you probably thought the meat of the conversation would be the matter of Thain selling Lewis a heaping pile of garbage. NO LONGER. Per the game changing bomb dropped by CNBC’s Senior Interior Decorator Charlie Gasparino moments ago, re: Thain spending 90k on an area rug for his office, we have it on good authority that the first issue on Lewis’s agenda is the following surveillance shot of JT “hard at work.” Be interesting to see how Thain explains this.
CNBC’s Senior Interior Decorator Charlie Gasparino dug deep and reports that upon taking over at Merrill last year, John Thain spent $1.22 million redecorating his office (itemized receipt after the jump). We don’t really care either way if JT “gets” to stay at Bank of Amerillwide or not, but please for the love of Angelo Mozilo (who, btw, didn’t get any heat for converting his office into a Hollywood Tans in ’89), if he does, can it be over the issue of spending $35k on a Porta Potty? This is something we want, nay, need, to hear Ken Lewis get worked up over. If that can’t be arranged, we’ll settle for Lewis sending a bunch of men over to Thain’s office to pee on, and then steal, the 90k rug.
Someone famous once asked, “What separates China from the rest of the world?” and then promptly answered, “Accountability.” That author was referring to the Chinese death sentence handed down to the 62 year old top food and drug regulator for taking bribes. Just so you don’t think they were messing around when they said “death,” the guy was executed without fanfare less than 60 days after the sentence was read.
That was in 2007. Not much has changed, well, except some vertical death sentence integration:
The former chairwoman of China’s Sanlu dairy was sentenced to life in prison and three others received death sentences Thursday in a tainted milk scandal that killed at least six infants and sickened nearly 300,000 others.
Tian Wenhua and three other Sanlu Group executives were put on trial for producing and selling fake or substandard products after their arrests in late September.
Tian, who pleaded guilty in December, received a life sentence Thursday. Former deputy general managers Wang Yuliang and Hang Zhiqi received sentences of 15 and eight years, while Wu Jusheng, a former executive heading Sanlu’s milk division, was sentenced to five years in prison.
In addition, Sanlu, Tian and Wang were ordered to pay multi-million dollar fines.
The court also sentenced three people to death, including a suspended sentence pending a review, and two others to life in prison. Six more received prison terms of five to 15 years each.
A list of sentences handed down by a Chinese court Thursday in China’s tainted milk scandal.
Sanlu Group
– Tian Wenhua, former chairwoman: life, $3.6M fine
– Wang Yuliang, former executive: 15 years, $3.5M
– Hang Zhiqi, former executive: 8 years, $133,000
– Wu Jisheng, former executive, 5 years, $88,000
– Company: $7 million fine
Producers
– Geng Jinping, milk producer: death, assets confiscated
– Geng Jinzhu, milk producer, 8 years, $73,000
Middlemen
– Zhang Yujun: death
– Gao Junjie: death; sentence suspended 2 years pending review
– Zhang Yanzhang: life
– Xue Jianzhong: life
– Zhang Yanjun: 15 years
– Xiao Yu: 5 years
Many of the defendants — including one who received a death sentence — were middlemen who sold melamine to milking stations that added the chemical to the milk.
Parents outside the courthouse were outraged by the sentence that spared Tian’s life. A mother who’s baby died from contaminated milk said she wanted Tian shot to pay for the life of her child.
Make no mistake about it. China does not fuck around.
Try accelerating some bonuses over there and I bet you get your ass handed to you (literally) before you die of massive hypovolemia, have your assets seized, your body boiled down for its essential oils, your children sent off somewhere to be ground up and sold, the proceeds sent to the victims and a bill for processing services sent to your estate with penalties and 8% per month in late fees.
I do have to wonder though, with all this accountability (China has been handing down death sentences like this for some time) why is it that I still can’t get a tube of toothpaste from the place that won’t kill me? (I’ve since switched to Tom’s of Maine). If China can’t eliminate greed (and we are talking naked bribery and corruption here, not someone front running clients or stacking the board with old fraternity brothers) with the liberal use of the death penalty, how exactly is the present administration (or any other) going to stamp it out in the present (semi)capitalist system?
Hint: It can’t.
No my friends. We must learn to harness this great power. Properly refined, a certain otherwise un-noteworthy area in Connecticut could provide enough killogreed-hours to power the entire Northern hemisphere.
Death sentences in China tainted milk case [CNN]
A breathless Charlie Gasparino reports that Ken Lewis will conduct an “emergency meeting” with Thain to “discuss his future at B of A,” circa 11:30 this morning, with former Countrywide CEO and current Bank of Amerillwide administrative assistant Angelo Mozilo taking notes. “Discuss his future” kind of sounds like Lewis is going to take his belt off, which makes me nervous for JT, but let us not forget THIS:
What do you do when your firm is on the verge of being absorbed, you are about to announce massive quarterly losses and the government might impose salary restrictions? Why, announce bonuses early! That was easy.
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.
The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal.
Merrill and BofA shareholders voted to approve the takeover on December 5. Three days later, Merrill’s compensation committee approved the bonuses, which were paid on December 29. In past years, Merrill had paid bonuses later – usually late January or early February, according to company officials.
Within days of the compensation committee meeting, BofA officials said they became aware that Merrill’s fourth-quarter losses would be greater than expected and began talks with the US Treasury on securing additional Tarp money.
It will come as no surprise that we love bankers. Yes, we mean you. Without your antics, where on earth would we be here at Dealbreaker? Still, there must be some limits to the shifty imaginations lurking under those big, blue eyes. No? At some point someone has to say “enough is enough” and buckle down to admit that maybe the institutional decision to hold 30:1 leverage, and the structural changes you’ve made over the past ten to fifteen years to become a securitization clearing house, routinely torturing Basel to within inches of its life, might not actually have been the way to eternal glory and a spot in the great hall at Valhalla (where the time will be spent underwriting Bowie bonds on hunting ventures, no doubt). Someone had to say that. Someone had to, ever so gently, put a toe on the brakes.
Unfortunately, in this case, that someone was John Thain.
It looks like the fantasy that tech was going to pull everything out (did anyone really believe this) has been torpedoed twice, is dead in the water and is listing 12 degrees to port.
Microsoft Corp. will cut 5,000 jobs, or about 5 percent of its workforce, as the global recession eats into demand for software.
The reductions, Microsoft’s first companywide firings, will take place in nearly all areas, including research, sales and marketing, the company said today in a statement. The measure, announced with the company’s second-quarter earnings, will save $1.5 billion, Microsoft said.
Chief Executive Officer Steve Ballmer is under pressure to reduce costs as sales growth dries up in what may be the worst recession since World War II. The company’s Windows division, which accounts for about a quarter of sales, is suffering after personal-computer shipments rose at the slowest rate in six years in the fourth quarter.
Doing the monkey-boy dance isn’t likely to save things for Microsoft, which, like it or not, faces increasing irrelevancy and timing of a product cycle that isn’t doing it any favors. Vista is a disappointment and Windows 7 isn’t likely to help much. There are just so many new tricks you can squeeze into an operating system and until Windows cooks perfect toast in the morning, we’ve hit the point of diminishing marginal returns. This, combined with the Microsoft-Intel chain gang effect puts old Steve in the spotlight while chained by the ankle to Woody Allen. There are fates worse than death, but not many.
Microsoft Cuts 5,000 Jobs as Recession Curbs Growth [Bloomberg]
Merrill has apparently converted itself into a slaughterhouse this morning, with “rates getting annihilated.” Regarding yesterday’s BoA cannings, a bit more color:
Citi Wants More, So Sayeth Parsons (BBC)
The $306B guarantee of assets last year wasn’t enough so far as Mr. Parsons is concerned: he wants the assets off of his sheets for good. The conversation came about when Parsons started making comments to the affect of lending and why they aren’t doing more of it, and somehow ended with this: “It’s not a situation of, you do this for me, and I’ll do that.” This, as I’m sure you’re aware, is effectively like saying “I maxed out my credit cards on Hookers, take those off my hands and I’ll donate to the charity pool”… “except I might not.”
AIG Remains Active In Dissolution (FT)
AIG has been making headlines lately with their active spin-off and sell strategy, valuing companies and finding perspective buyers more quickly than I had imagined was possible. Having not yet found leniency in the government structured payment requirements (as mentioned, they were looking for stock in the sell instead of cash only), they appear to have developed a sustainable model in rent-to-own – the question now becomes one of who can afford to absorb this stuff; $20B isn’t change these days.
“Prospective bidders include: China Life, the world’s largest life assurer; HSBC, the UK-based bank; Prudential, the UK insurance group; as well as Prudential Financial of the US.
ManuLife Financial, one of North America’s biggest insurance groups, and Allianz of Germany have also requested information.”
More Merrill Mayhem (DJNewswire)
One has to wonder if the exits were strategic negotiations on the part of BAC, or just angered employees heading for the hills. Either way, ML Asia is projecting a flight of confidence from its upper ranks, as evidenced:
“Ajay Sawhney, head of regional leveraged finance, has left Merrill in Singapore, one person told Dow Jones Newswires.
Jon Pratt, head of Asia Debt Capital Markets, left the firm in Hong Kong recently, while Rahul Malhotra, head of the bank’s Global Wealth Management Asia Advisory unit, has left the Singapore office, another person said.”
Sortable TARP Map (WSJ)
While we’ve seen these on lunatic fringe sites, this one is actually kind of fun. You’ll notice that there’s eight states that didn’t take TARP funds, so good for you: it turns out being boring DID actually pay off.
Math Could Have Proved Madoff Was A Thief (FT)
In a fleeting moment of genius, someone said let’s bring in a risk manager to see if thing would have tested out..it didn’t:
“A study to be published on Thursday by Riskdata, a risk management specialist, argues that Mr Madoff’s returns are called into question by the bias ratio – a mathematical technique that identifies abnormalities in the distribution of a series of investment returns.”
UBS To Cut More Jobs (Bloomberg)
Today, on the daily UBS update, we see that they’re looking at cutting Securities and more Debt people. When asked, Dirk Hoffmann-Becking responded:
“The end-game result I expect for UBS’s investment bank is a business entirely focused on equities, equity underwriting, merger advice and foreign exchange”
Bank of America Accused by Investor of Undisclosed Merrill Loss (Bloomberg)
Some BAC shareholders are miffed over not being told MER was a pile of garbage pre-merger.
$$$ Maria Bartiromo sticking with the peacock [NYP]
$$$ Dimon Bought $11.5 Million in JPM Stock Last Week [Bloomberg]
$$$ Why Do I Keep Having to Repeat Myself? [1-2]
$$$ “Falsely no doubt“? Considering the “rumor” originated in the fucked up imaginations of this here website, I think we’ll be the ones determining what’s false and what’s not, thank you very much. (And false it is not. The big guy really did task his top employees with shutting the Kogans down. Confirm it as 203-890-2000.) That is all. (Steve backs me up on this, btw.) [FWIW via ZeroHedge]
