Cuts are said to be going down in equities at Bank of Amerillwide today.
Update: The population restructuring is apparently affecting former Merrill employees, World Financial Center.
Archive for February 2009
The Wall Street Journal finally got around to doing a story on “the other part of AIG,” that being the one that manged to throw cash and assets out the window without touching a Credit Default Swap:
Accounts of AIG’s near collapse have largely focused on soured trades entered into by the company’s Financial Products division. But a close look at the 2,000-employee AIG Investments unit shows how this part of the conglomerate made gambles that helped cripple the firm.
In running the securities-lending business, AIG Investments bought tens of billions of dollars in subprime-mortgage bonds. That turned out to be a riskier approach than some rivals’, who parked cash from securities lending mostly in low-risk or short-term investments such as Treasury securities and commercial paper, according to analysts.
And how would you like to be these guys from AIG Investments right now?
In December 2005, executives from AIG Investments proposed to AIG’s credit-risk managers a set of guidelines for the securities-lending business. One was to invest up to 75% of the cash collateral it received in “asset-backed securities,” according to people familiar with the matter.
Oops.
An AIG Unit’s Quest to Juice Profit [The Wall Street Journal]
Larry King: Is Obama right or wrong to go after these executives with salary caps?
Donald Trump: Well, I think he’s absolutely right. Billions of dollars is being given to banks and others. You know, once you start using taxpayer money, it’s a whole new game. So I absolutely think he’s right.
Trump: Obama ‘absolutely right’ on executive pay cap [CNN]
As you all know, our favorite Chicago hedge fund is back in the game but luckily for the hostages investors Ken Griffin isn’t taking any chances, and if he gets a car and an airplane with 6 hours fuel standing by at the airport or Fed guy on his staff NOW he wont start throwing assets out the window one at a time with a bullet in them. We’re told K to the G, along with wife Anne, shared an intimate dinner with Randy Kroszner, recently retired Governor of the Federal Reserve, last night at Alinea in Chicago. Apparently on the agenda: “art, wine, debt markets and job offers,” the latter presumably being for Kros (and his rolodex) to come help out in Chi-town, though we do like the idea of KG taking up public service, and Secretary of the Treasury is probably out, on account of the tax issue.*
*Just messing, you know we’ve got nothing but love for Kenny-boy.
Clarium Capital Fund Ltd.:
Childrens Investment Fund:
Let me tell you a little story about a man named SHH! SHH! Even before you start, that was a pre-emptive “shh!” Just know that I have a whole bag of “shh!” with your name on it.
By Bess Levin
Attention all authors, comedians, local yokels: thought you’d inject a little Bernie Madoff humor into your routines? Think again! At least if you’re making an appearance at a certain Manhattan social club (or performing a couple of sets at the Laugh Factory, where the owners got hosed big time). The Ponz. Master’s name has apparently been BANNED at the Harmonie Club. Page Six reports that Laurence Leamer, set to speak on March 5 at the Jewish club house about his book, “Madness Under the Royal Palms: Love and Death in Palm Beach,” was told the keep he who shall not be named in the lock box (with the HC’s manager taking the extra precaution of strapping wires to the author’s nipples that would send an electric current should he try to sneak anything in).
“I was informed that a number of members at the Harmonie has lost money with Madoff and it was a very sore point,” Leamer, whose talk has since been canceled, told P6. “I was willing to go along with it, even though it’s kind of censorship.” Uh, fuck hell yeah it is! Also? The completely wrong way to go about this. You don’t see Madoff victim Kevin Bacon going into denial over the whole thing, do you? No, because Footloose knows that there’s catharsis in talking/dancing it out. And also that we must never forget. We start embargoing the name Bernie Madoff and next thing you know Ahmadinejad is saying it never happened.
Madoff List Made Available Via Court Documents (CBS)
Presented without comment.
Bank Of America US Governments Bitch (Reuters)
It was bound to happen, and while we all figured it would be Citi (sorry, Citi) that first fell to its knees and felt the great warmth of acceptance, it turns out we were wrong; BAC has apparently almost officially made the move from “girlfriend” to “live-in hobo.” And no, we’re not talking the good kind, we’re talking the kind that you rescue from the homeless shelter and can threaten to send back at any moment – though you have to admit there’s a certain popcorn’ish quality to watching CEO’s have their testicles handed to them.
Fun with selective hearing:
“Paulson and Bernanke on December 17 “forcefully urged Mr. Lewis not to walk away,”
[...]
Days later, Bernanke told Lewis Bank of America had no grounds to walk away
[...]
They warned Lewis that if the deal collapsed … their confidence in Bank of America would be “undercut.”
[...]
The government agreed to provide $20 billion in additional capital for the bank and to insure against losses on $118 billion in troubled assets”
Bank Of England Taking Its Sweet Time (Bloomberg)
In all likelihood the Bank of England is shooting for an effective 0%, but it looks like it’s going to take a holiday at 1% and get back to us in a few.
“The Bank of England will probably lower the benchmark interest rate closer to zero today as officials resort to buying securities to revive the economy.
The nine-member Monetary Policy Committee will cut the bank rate by a half-point to 1 percent, the lowest since the institution was founded in 1694, according to the median of 61 economists’ forecasts”
Swiss Government To UBS: Did Not (Reuters)
UBS pulled a brilliant move in announcing prematurely that the Swiss Government had asked them to break up, thus forcing the Swiss into a defensive position and (possibly, depending on previous moves/what comes next) setting them up to say something like “We’re committed to the success of UBS”.
Somewhat related, Bloomberg has it that Swiss Re has stepped outside the hospitality of the Swiss Government to look for funds, turning to O3 for about $2.6B in funds:
“The investment may give Berkshire a stake of more than 20 percent as Swiss Re struggles to keep its AA credit rating. The reinsurer fell as much as 18 percent after posting a 2008 loss of about 1 billion francs and announcing plans to cut the dividend. The Zurich-based company also will disband its financial-markets unit and may seek more capital.”
$$$ Bank Of America Claims It Did Not Engage in Superbowl Carnival [zero hedge]
$$$ Did Madoff’s feeder fund shop for friendly audits? [Fortune]
$$$ Markopolos Says He Will Turn In A Mini-Madoff [AlleyInsider]
Markopolos Says He Will Turn In A Mini-Madoff from AlleyInsider on Vimeo.
Did you recently get laid off? Are you looking to take it all off, but unfortunately missed the deadline to do so for Playboy (speaking of which– when is that thing coming out?). Today is your LUCKY DAY, provided you’re female and pre/post-menopausal, or know someone (perhaps your former boss or wife) who fits that description.
The CitiJet, ok, we understand. The Wells Fargo Vegas jaunt? Yes, that looked bad. But the Goldman Sachs Miami hedge-fund conference? That’s like canceling the Predator’s Ball!
Posh trip to Miami. Hedge funds. I mean what’s not to like?
Goldman Sachs called off its big Miami hedge-fund conference scheduled for the first week of March, telling clients that going ahead with the normally posh event there could cause image problems for the firm at a time of intense scrutiny over banks’ spending habits.
“In light of the current environment, Goldman decided to reschedule the hedge-fund managers’ conference. We plan to hold the conference in the next few months in New York,” Goldman spokesman Ed Canaday said.
