Remember all that noise, delivered with practiced and indignant huff, about lobby rules? About the hiring of former lobbyists, and how that was a bad thing(tm) and would in no way be permitted in the new administration. Yeah, well, not so much.
It seems the boyish charm Banker in our big Monopoly game, Tim Geithner, wants to hire an old acquaintance who is a former lobbyist for Goldman Sachs.
We expect he will get his way. I mean its not as serious as paying your taxes or anything, and that (along with penalties and interest) is the sort of thing that’s obviously to inconvenient to bother with when there is important work to be done.
Obama’s hypocrisy showing [CNN]
Archive for January 2009
Dollar Dominatrix Has Had It Up To Here [points to head] With This ‘Good Bank/Bad Bank’ Nonsense
By Bess Levin
Must you make her say it again? Stiletto spikes to all of your asses! You think this is funny? You won’t be laughing when she administers the testicle clamps!
Talks of creating a “bad bank” are once again gaining momentum, and accordingly, we feel compelled to repeat and review our thoughts on the subject. In brief, simply removing “toxic” assets from bank balance sheets will not directly cause banks to increase lending. Lending standards have tightened dramatically, and there is an unavoidable restructuring of risk taking place. Such causes money to come out of the system and lending to contract, with or without this “bad bank” structure. Lower asset bases, higher credit losses, and bloated expense structures will continue to pressure banks’ earnings power and capital creation. We remain cautious on the group.
No Bad Bank Please [Oppenheimer]
At this point it pretty much looks like it’d be preferable to be laid off from Bank of Amerillwide than employed, compensation-wise. However, there is still some, shall we say, discontent among the former BAC’ers no longer lucky enough to be working under Ken Lewis, and in the reflected glow of Ang. Moz. An unofficial spokesman for the group writes:
FYI – maybe there is something in this issue; I’ve confirmed that Corporate and Investment Banking (CIB) employees who were cut last week were treated differently in NYC and Charlotte in severance pay. The NYC employees were all given 3 months + 2 weeks of pay * every full year of service (rounds down). The Charlotte employees were given a meager 2 weeks of pay * every full year…a huge difference.
$$$ Ex-Marine Launches Long/Short Hedge Fund [FINalternatives]
$$$ Wells Fargo Says Madoff Scheme Cost Bank $294 Million [Bloomberg]
$$$ Job of the Day: A “top tier HF in Greenwich, CT” is looking for a consumer analyst with 3-5 years experience. That could be you! Compensation, if the employer is who we think it is, includes deep-fried leaf cookies. [DB Career Center]
Possibly, if it can be inferred from the fact that he was still referred to as CEO/chairman on the most recent press release from Bank of Amerrillwide, post-board meeting. See you at Phil’s (or Sonoma), drinks on Moz.
First, it was the house on Mustique. Now, it’s being whispered that one of Fairfield Greenwich founder Walter Noel’s daughters and son-in-law (a FFG partner, natch) are mulling over vacating their place at 12 East 78th Street. It’s really too much to bear, unless of course you’re in the market for a $13.5 million townhouse with a “pale gleaming Indiana limestone facade” in which case, get in touch.
From the mailbag:
WFC 8K says misstated book value in press release this morning:
On January 28, 2009, the Company issued a press release regarding its results of operations and financial condition for the quarter and year ended December 31, 2008. The press release incorrectly reported book value per common share of $23.43 for the quarter and year ended December 31, 2008. The correct book value per common share for the quarter and year ended December 31, 2008 is $16.14.
Robert Rubin, who quit his post as senior counselor at Citigroup Inc. this month, said an accounting rule forcing companies to mark down assets every quarter to reflect market value has “done a great deal of damage.”
“I spent my whole life at Goldman Sachs believing in mark- to-market accounting, and having said that, if you look at the experience from the last two years, I think mark-to-market accounting has led to terrible vicious cycles in asset prices,” Rubin, the former U.S. Treasury secretary, said during a discussion at the 92nd St. YMCA late yesterday.
Yes, because it was the accounting treatment, not the toxic assets and years of building leverage, that required drastic markdowns. Who was responsible for draining the liquidity from the market? Poseidon?
Robert Rubin Says ‘Mark-to-Market’ Accounting has Done ‘Damage’ [Bloomberg]
Attention, Bank of Amerrillwide shareholders and employees: I know you’re probably all pretty prettay prettay down in the dumps right now but redirect your anger my friends, because Ken Lewis et al. are in no way to blame. In fact, no one really is. When you think about it, Bank of Amerillwide is a lot like a farm. You can work your damn hardest, and then some bad luck, or weather, could come along and wipe our all your great effort. I guess in this scenario, Countrywide would be, hmm, what, a stray horse that came along and shat in the mouth our crops and Merrill as…as what? Hmm? How about “the radioactive fallout of plutonium assets, drifting gently down to impregnate the soil with its poison”? Would that work?
For those of you wondering WTF I’m talking about, after the jump, an email sent from Chief Administrative Officer, Lewis right-hand man, and recently-subpoenaed Steele Alphin to a shareholder this morning, in response to said shareholder’s expression of disappointment in BAC, of late.
In our effort to bring you all things Ponzi, we couldn’t help but mention the article in the Journal that dedicates a great deal of formerly white space to the topic.
Federal and state authorities are reporting a growing number of financial scams that echo the alleged Madoff fraud, as strapped investors seek access to their cash amid increasingly hard times.
At least six suspected multimillion-dollar fraud cases have emerged this month alone, many of them alleged Ponzi schemes, in which investors are lured by promises of lofty returns but are actually paid off from new victims’ funds.
The piece is worth the effort, particularly given the fantastic irony of the circle sized Ponzi losses graphic that, doubtless, came from JP Morgan. (The Journal might understand geometry a bit better, however).
In Echoes Of Madoff, Ponzi Cases Proliferate [The Wall Street Journal]
It’s Davos time, and you know what that means. Every talking head with an opinion will be spouting off their big idea(tm) of the day, their mouths forced to move at a rapid pace, opening and closing spasmicly lest an overeager reporter shove a microphone past the point that triggers the gag reflex. Soros, of course, is no exception.
“That (the “bad bank” proposal) will help relieve the situation, but it will not be sufficient to turn it around,” Soros said during a live interview at the Davos economic conference in Switzerland. Instead, Soros said he would create a “good bank” and re-capitalize the good assets.
If it’s not Soros talking about the effects of “the Lehman thing,” it is someone else talking about the effects of “the Lehman thing,” so really, couldn’t we just do without Soros for awhile?
Soros: ‘Bad Bank’ for Troubled Assets Is Bad Idea [CNBC]
