Am I the only one amused that the SEC still has this much power? Still has any power? Still has offices? Still is being supplied with electricity?
A little-noticed ruling by the Securities and Exchange Commission is setting the stage for shareholders to further question the compensation packages doled out to executives at banks that received rescue cash from Uncle Sam.
On Friday the agency gave the OK to a group of investors that wants to put to a shareholder vote a proposal to impose stricter pay caps than those the feds have outlined for executives at Birmingham, Ala.-based Regions Financial, which got $3.5 billion from the Trouble Asset Relief Program.
The SEC’s move may spell trouble for banks that have received TARP funds and have been targeted by shareholders for change, including Bank of America, American Express and Fifth-Third Bancorp.
Didn’t someone take away their remote control already and shut down the phones?
SEC OKs Stockholder Input At Firms Getting Tarp Funds [The New York Post]
In this new age of cost cutting no contractual obligation, no matter how ancient, is safe from scrutiny. What might have seemed an innocent provision on a severance agreement eight years ago today comes back to haunt firms and subject them to navel gazing by The Safecracker and crew. To wit: Bloomberg’s shocking exposé on offices and secretaries that, no doubt, will result in a Congressional investigation by Friday.
Looking for Charles O. “Chuck” Prince, ousted 15 months ago as Citigroup Inc.’s chief executive officer? Just call his extension at the bank, which still pays for his office and secretary in Midtown Manhattan.
Former Citigroup investment-banking head Michael Klein also has a free office and secretary after receiving a $34.3 million exit package when he quit in July 2008. John Reed, 70, who hasn’t worked at the bank since he resigned as co-CEO in 2000 with a $5 million parting bonus, is entitled to an office and secretary for as long as he wants.
Oh, the humanity.
Citi Cost-Cutters Skip Offices, Staff for Ex-CEOs Prince, Reed [Bloomberg]
Don’t worry. The regulators are on it like white on rice. They are screaming through materials on “island time,” baby. Yes, yes, sure, they heard the screams, but they never looked before because the neighbors never complained. Now that blood is running under the door into the sidewalk, however, they’ve decided to take matters in hand and apply for a search warrant. The judge, however, is on vacation until next week so, we’ll have to wait until then to open the door. Don’t worry. They’ve flown in experts from Sarasota to assist in the investigation. Until they arrive, they will just play trivial pursuit with the prime suspect. (What was Columbo’s first name?)
Antigua and Barbuda regulators will quiz Stanford International Bank officials about issues raised in press reports, but have not launched a formal investigation of the Caribbean nation’s largest bank, in part because no customers have complained, the top regulator told Reuters on Friday.
Antigua regulator to quiz Stanford [Reuters]
Earlier: Dear Aspiring White Collar Criminal…
What do you do when you are on the hook for notional CDS amounts 30-50 times the actual face value of a bunch of worthless ($0.10 on the dollar) bonds? Why, buy the bonds at 100% of face, of course. This is especially clever if you are using the taxpayer’s dime. Not that we know anyone for sure who is actually doing this or anything, you understand. Just a rumor. Nothing to see here.
So GM is going to grudgingly accept another check for $4 billion. Is anyone else so numbed to large numbers at this point that $4 billion really doesn’t seem like much money? I mean, John Paulson spits $4 billion. Tim “The Safecracker” Geithner exhales larger sums while taking his afternoon nap. (And you believed that story about closing the cash room for “painting” every afternoon).
Yes, oddly, those sorts of figures seem boring now. Even when the UAW and management have walked away from the table, we seem so attached to the Buick Lucerne that a few billion more seems trivial to throw down the tubes in order to save it from oblivion.
The U.S. government will release $4 billion in additional aid to General Motors Corp (GM.N) on Tuesday as planned, a White House aide said on Monday, ahead of the deadline for the automaker to submit a new survival plan.
I suppose we can just hope they did their homework right this time.
GM to get $4 billion aid tranche Tuesday [Reuters]
Not really a big deal, considering that the pawn shop scrilla will be enough to right the ship and then some, but for the haters (Meredith Whitney) in need of fresh tracks:
Citigroup’s quest to raise cash by selling the assets it doesn’t want is falling flat, as would-be suitors have more interest in the parts of the business that Citi would like to keep.
[...]
Problem is, the old Golden State assets and Banamex have been ring-fenced into Citi’s so-called good bank, Citicorp, which contains assets and businesses that the hobbled banking giant wants to keep.
Meanwhile, the assets that make up Citi’s so-called bad bank, businesses that are seen as non-core and are at the heart of a strategy to raise much-needed capital, are garnering little interest, investment bankers told The Post. The assets include CitiFinancial, CitiMortgage and Primerica, which has been for sale for more than a year.
Sources said those businesses aren’t drawing buyers because they are in sectors that face the strongest headwinds these days.
Citi Assets Flop [NYP]
Brokerage firms, via the WSJ, get service-y today, dividing a bunch of so-called marquee hedge funds into two groups. The first is the A-team, and those listed have the lucky distinction of, besides receiving “perks such as stock research, trading data and introductions to executives of companies in which they might invest,” being branded as firms which will probably not go under. So, high-five on that endorsement. They are:
* Brevan Howard Asset Management
* Bridgewater Associates
* Caxton Associates
* D.E. Shaw & Co.
* Duquesne Capital
* Elliott Management Corp.
* Eton Park Capital
* Galleon Group
* Highbridge Capital Management
* King Street Capital Management
* Kingdon Capital Management
* Marshall Wace Asset Management
* Millennium Partners
* Moore Capital Management
* Och-Ziff Capital Management
* Paulson & Co.
* Pequot Capital Management
* Renaissance Technologies
* SAC Capital Advisors
* Soros Fund Management
* Stark Investments
* Tudor Investment Corp.
* UBS-O’Connor
And then there’s the B-team, whose participants are getting less leverage lovin,’ and who have the unique opportunity to shock everyone by beating the prognostication that they won’t be profitable enough for the banks’ liking and/or “will fold.” Among the two hundred names, a handful you might recognize:
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That’s not a dis, btw, everyone here should be fully aware of the fact that battles of the petty variety are our favorite kind. Quick recap, then down to the dirty. Last week, in a CNBC BREAKING NEWS segment, Charlie Gasparino report that Goldman Sachs had held a double secret you must have the password to enter meeting, mere hours after Tim Geithner’s Congressional debut. According to Chaz, those gathered at the coffee klatch, which included the likes of Ken Griffin, were of the mind that the boy toy Treasury Secretary has no idea what he’s doing.
Almost immediately following the hit, Goldman Sachs denied that the meeting was secret, saying it had been planned weeks in advance, and that T. Geith was not the issue. Later that afternoon, Chaspo, in a way only he can, claimed GS was talking BS, because if the meeting hadn’t been secret, “where was my invitation?” And speaking of shit from a bull? The next morning CG suggested Goldman change its ticker to that, which he believes to be a more fitting acronym for the bank’s business model. For those of you who thought that was the end of it– how wrong you are.
This morning, Gaspo appeared in a bit called “Goldman’s Losing Luster,” and though the Times said pretty much the same thing this morning, the rag’s piece lacked that angle of vendetta. While he Gasparino charitably noted that GS “is not going under,” he went on to wax poetic:
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Back in December, the gut-wrenching rumors circulated that Fairfield Greenwich Group founder Walter Noel, his wife Monica, and their five daughters would not be spending Christmas at the family’s home in Mustique, which they were– and my fingers are recoiling in horror here but I’m powering through it– renting out by the week, like a common street whore. The sadness was almost too much to bear, and though we pleaded with Uncle Bernie to do something, anything, our cries fell on deaf/under 24-hour surveillance ears. We were gazing into the abyss and you know what was staring back at us? A vision of the two once vibrant human beings you see at left, sitting in a Seaside Heights motel. And then, like an angel descended from a heaven that takes whatever money could be returned to bilked investors and places it in the hands of the truly deserving, came this glimmer of hope that everything is going to be alright.
Page Six reports that Walter and Mon have returned home. Yes, mon chichis, the duo is safely ensconced in Yemanja. And though, due to the matter of selling their share of a private jet, they were forced to fly commercial, it sounds like M and Dubs are going to be okay. Provided the plot to fake their own deaths, being hatched as we speak, goes off without a hitch. Otherwise I don’t know what they’re going to do. If anyone has any get rich quick schemes to speak of, let us know and we’ll pass them on.
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California Announces 20% Cut In Staff (Reuters)
California has announced it’s cutting roughly 20% of its staff after failing to pass their budget, which included both cuts in spending and tax hikes. Skipping the Terminator jokes for the moment (just too easy), we should look to California to start a war: given the correlation of recession -> conflict it wouldn’t be out of line to expect The Golden State to pony up and take out/reform a not-so-allie’ish state (or small foreign entity, though we’ll disavow any knowledge officially.)
British Columbia would fit nicely in to the fold.
Data Hints At Slowing Of Decline (NYT)
“But recently, a handful of lesser-known indexes and indicators measuring things like overseas shipping rates and manufacturing outlooks have begun to paint a picture that, while bad, is not quite as bleak as a few months ago.
“It’s too early to get excited, but I think there are a couple of green shoots that say we’re not going down as heavily in the first quarter as we were in the fourth quarter,” said Bruce Kasman, chief economist at JPMorgan Chase.”
Wal-Mart Earnings Top Analyst Estimates (Reuters)
“Wal-Mart Stores Inc on Tuesday posted a quarterly profit that beat Wall Street expectations, helped by strong U.S. sales at its namesake discount stores.
Profit fell to $3.79 billion, or 96 cents per share, for its fiscal fourth quarter that ended January 31, from $4.096 billion, or $1.02 share, a year ago.
The company said earnings per share excluding a 7 cent charge for the settlement of class action lawsuits was $1.03 per share. Analysts, on average, had been expecting it to earn 99 cents per share, according to Reuters Estimates.”
UBS Sees 35% Drop In Hedge Fund Assets (Reuters)
The firm is calling for a drop in assets in hedge funds, calling the sweet spot at $1.2T end of Q1, down from the high water mark at $1.93T mid 2008.
Money Shot:
“We are gonna see a reduction in hedge fund assets, we are gonna see decline in the number of hedge funds, we are gonna see some strategies that will not work in this environment,” Timothy Bell, global head of hedge funds advisory at UBS Wealth Management, told reporters in Singapore.”
Soon after, Bell left the conference to make himself a nice soup from chopped up hot dogs and Stove Top stuffing.
Japan’s Finance Chief Resigns For Being Hammered At G7 Press Conference (Bloomberg)
I’m not sure I can attack this with any grace: given the whole gang was back together, and under the circumstances, I’m not sure I would have handled it any differently. Maybe, maybe I would have had a junior member step into the Press for me: but who can resist cameras?
Trump Entertainment Files For Ch 11 (NYT)
“The casino operator had assets of about $2.1 billion and total debts of about $1.74 billion on Dec. 31, 2008, it said in its filing with the U.S. Bankruptcy Court for the District of New Jersey.
Nine affiliates of the casino operator including Trump Plaza Associates, Trump Plaza Associates, Trump Marina Associates and Trump Taj Mahal Associates simultaneously sought protection, according to the filing.”
Stanford Investors Head To Antigua For Redemptions (WSJ)
The run on Stanford investments continues as investors scramble for redemptions that may be contractually locked. It appears as though the CDs have provisions (similar to gates) built in to them that allow for the host firm to close redemptions should they chose.
None the less, investigations looming/ongoing – situation is fluid.
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