Cuts are apparently going down today in ML investment banking across the pond. They’re expected to continue into tomorrow, affecting analysts and associates. No word on severance.
Archive for February 2009
Page Six casually wonders today, “Which morning cable TV show hostess took off a week recently to get her eyes done and her breasts enlarged?” Now, they could be referring to any old news babe, but let’s be honest, the Post uses its column inches to go after Fox Business “rival” CNBC. So that narrows things down nicely. But whose T&E are we talking about here? For obvious reasons, Michelle Caruso-Cabrera is out. I think the Money Honey had a few days off last week, but she’s not on in the morning (she is, however, sporting a new haircut, mentioned several times this week by D. Rat, which may be an attempt to distract us from other changes). And then there’s Erin Burnett. Allegedly she was in China last week on assignment– or was she? Also “on assignment” was Rebecca Jarvis, down in Antigua, supposedly looking for Sir Allen Stanford though, quite suspiciously, always had her face and body scrambled when appearing on-air, which the Peacock would have us believe was due to satellite trubs. So, you tell us:
Big Ben, Live:
Ben: Sorry I’m late. Was helping Geithner with some math problems, and as you can see, my wife’s cat puked on my tie.
Dodd: Here is how this hearing works. I grandstand for a few minutes, then I will tell you how fucked we are and exactly who was responsible. I will use words that suggest disease, maybe “cancer” here. Then you will explain how I am exactly right and how fucked we are (I expect you to use hand gestures here. You will remember that I love pointing at things.) Oh, my tie is dipped in the blood of republicans, you might notice.
Shelby: I’m glad you are here in your capacity as Chairman of the Fed so I can tell you about the Fed’s balance sheet. Oh, and my colorblind manservant picks out my ties.
The Beard: You bitches forgot about the breaking of the buck in a large money market fund and the commercial paper clog in your little pre-prepared history that your congressional aide copy-pasted from Wikipedia two hours ago , didn’t you? Of course you did. You are not the Chairman. I am the Chairman, damnit!
Bullshit in 4… 3… 2… “The Federal Reserve is committed to keeping Congress and the American Public informed on these matters…”
Now I will drone you into complacency to lull you into a semi-comatose state and keep CNBC on its toes wonder if they should cut out to an 8-way split screen.
Dodd: Woah. You almost got me there. So, am I to understand from a few obscure passages in your written testimony that you think there might be just a little bit of hope somewhere? I mean, I have to tell the American People something good here. They are going to storm the Capital with torches. Who is going to lead us out of this recession?
Beard: Hey, is that Elvis over there?
Shelby: [super long statement disguised as a question]
Beard: That’s a very long question, Senator Shelby.
Bunning: Hey, joker, when are you going to show us your balance sheet and when are you going to tell us who you lent to so we can jump their shit?
Beard: Hundreds of years of central banking experience tells us that we really shouldn’t be sharing loan data when it comes to short term collateralize liquidity.
Schumer: We should be regulating hedge funds, right?
Beard: Yeah, it was the larger firms that caused the issues here, not the small ones.
Schumer: That doesn’t answer my question. I ask you about small firms, leveraged firms, you answer with large firms.
Beard: Yep. I know.
(CNBC points out that bank stocks are rallying- relating this to The Beard’s “moral hazard is just the nature of the beast” comments).
Martinez: Ok, ok, how are we going to reinflate the housing bubblerescue the housing market?
Press Secretary Gibbs said Friday that the White House is all about a private banking system BUT one senior administration official, while reiterating that line, seems to be trying to send Andrew Ross Sorkin a message. What is it girl? Rahm’s fallen down the well?
“We absolutely believe that our private banking system is best off being in private hands and we are trying our best to keep it that way,” said one senior administration official, who spoke on condition of anonymity. But, he continued, the government is already deeply involved in propping up the banking system and may have no choice.
Officials said they were bracing for the possibility of new problems that might indeed require the government to take a more aggressive stance.
“Given our involvement at this particular stage, there is an element, a possibility over time, that we will end up with some ownership of these institutions,” the official said. “This is really about aggressive anticipatory action. It is an acceptance that the future is uncertain, but that we can plan on a certain basis for it.”
Thain Can Testify, Cuomo Soils Pants (Reuters)
The fun just doesn’t stop boys and girls: it looks like Cuomo has won the right to question the ever living shit out of Thain (and by extension, perhaps anyone else?) in re: who got what, pay scale wise. It’s comforting.
“A judge on Monday ruled that former Merrill Lynch & Co Chief Executive John Thain is free to disclose the names of individuals who received bonuses awarded by the former investment bank before it was bought by Bank of America Corp.
The ruling by New York State Supreme Court Justice Bernard Fried is a victory for state Attorney General Andrew Cuomo, who filed a motion in court on Monday to compel Thain to testify about bonuses awarded to individuals other than Merrill’s top five executives.”
William Isaac Says Bank Nationalization Isn’t The Answer (WSJ)
In direct response to Greenspan (it appears), Isaac (who may actually know his shit) has come forward with some compelling thoughts about nationalization.
“So-called experts frequently cite the success of the Swedish experience with bank nationalization in the last decade. Nothing could be less relevant. Sweden’s population, economy and banking system are roughly the size of Ohio’s. Sweden’s largest bank is roughly 10% the size of each of our three largest banking companies. Moreover, Sweden nationalized only Gota Bank — and that was after it had already collapsed.”
UBS Fights For Names In Court (Reuters)
“UBS AG shares fell to a new all-time low on Tuesday after news the Swiss bank will have to wait until July to fight in court a U.S. bid to force it to disclose client names in a tax fraud probe.
UBS, the world’s largest banker to the rich, agreed last week to pay a $780 million fine and disclose the identity of about 300 of its U.S. clients to avert criminal charges, raising hopes the troubled bank could end its U.S. legal problems.”
AIG May Convert Government Held Shares To Common (Bloomberg)
It looks like AIG is considering a move to common shares to kill the dividend associated with the preferred shares. The problem is AIG is currently paying 10% on their preferreds – which makes you wonder whether the responsible/rational Government move would have been to set that at LIBOR to start with.
Not that the government is one for responsible/rational.
“”Paying a huge dividend on the preferred only makes you bleed slowly over time, so this would help,” said Robert Haines, an analyst at CreditSights Inc. in New York. AIG is facing a “huge potential loss on its investment portfolio,” which could lead to credit-rating downgrades, he said.”
UAW Concedes To Ford, There May Be Hope Yet (NYT)
In what could be a turning point for the negotiations with auto makers, the United Auto Workers has agreed to Ford’s stance on retiree health plans. I understand that this is going to hurt a lot of people, and that’s not exactly a point of joy for anyone – but the fact remains that it’s one step closer to a solvent company. Besides, there’s an underlying current here that’s really to blame for all of this: people are living far too long. I’m talking Social Security, retirement bene’s, hell – even my parents planning for retirement. Too long people.
AIG Gets Bid From MetLife, Axa (Reuters)
This has to be embarrassing. I’ll leave it at that.
“American International Group Inc received bids from MetLife Inc and Axa SA for its American Life Insurance Co unit, Bloomberg reported on Tuesday, citing people familiar with the situation.
MetLife made a preliminary offer of $11.2 billion for the life insurer, a price that may drop to about $8 billion because of a deterioration in the unit’s financial condition, the people told the agency.
A rival bid from Axa excludes operations in Japan, the unit’s biggest market, the people told the agency.”
$$$ Microsoft overpaid severance, wants money back [The Deal]
$$$ Madoff: The Monster Mensch [NYM]
$$$ Zachary Michaelson to Teach Portfolio Management Course as Part of New York University’s Credit Crisis Offerings [PRN]
$$$ AmEx Offers Some Holders $300 To Pay And Leave [DJ]
$$$ J.P. Morgan Cuts Dividend 87% [WSJ]
Yes, yes, we know that the excuse to start pushing for common stock with voting rights is that Tangible Common Equity is the standard for bank health that everyone is raving about- as if the voting rights were just an afterthought- but we told you before what this would mean when it came right down to it:
In an unexpectedly assertive joint statement, the Treasury Department, Federal Reserve and federal bank regulatory agencies announced that the government might end up demanding a direct ownership stake in major banks after they undergo a tough evaluation of their strength, which is to begin shortly.
“The capital needs of major U.S. banking institutions will be evaluated under a more challenging economic environment,” the administration said. “Should that assessment indicate that an additional capital buffer is warranted,” it continued, the banks could be required to give the government a right to acquire common shares, with voting rights.
The statement came as federal regulators confirmed that they were in discussions with Citigroup over precisely that kind of swap. Citigroup, which has received $45 billion in direct assistance and given the Treasury nonvoting preferred shares that pay a guaranteed dividend — is negotiating to swap the preferred shares for common shares that would give the government a stake as high as 40 percent.
You can’t get a little bit pregnant, people. Best you can do is to offer to go halfzies on an abortion. Plus, if you don’t seem to care about preferred anymore, its likely at least partly because you have given up any attempt to claim that taxpayers are ever going to see a dime of the money back.
In Latest Plan for Banks, U.S. Could Demand Voting Stake [The New York Times]
It literally was only a matter of time, and it really makes no difference how “temporarily” businesses are absolutely-definitely-totally-not-really nationalized. Patronage politics will show their ugly face and give us the insanity of a government tempted to dumb down a business it had to take over because of poor performance. Citi isn’t even technically nationalized yet and already, it’s starting. Latest nonsense follows:
Citigroup’s rivals are lobbying the government to shackle its investment banking business and international operations if the authorities nationalise or take a large stake in the troubled financial group.
The increasing likelihood the US Treasury will end up with a big holding in return for throwing Citi its third lifeline in less than four months has prompted other Wall Street groups to go on the offensive in Washington.
Apparently, the slippery slope is covered in melted butter runoff from all the popcorn being consumed on the sidelines.
Rivals want curb on nationalised Citi [The Financial Times]
They’re few and far between (pawn shops, anti-Semites, Gary Busey…so much you don’t know) but the number of people making bank as a result of the greatest Ponz of all time is growing by the day. Like the guy who took this photo of Bernie-boy back in the day, when he was a mostly anonymous rich prick. Now that he’s an infamous poor schmuck, the photog, Jonathan Saunders, has found his work in high-demand. And that got us thinking– we should try and make some cash-money off the pic we recently came across when cleaning out a former co-worker’s desk. So we’re pimping it out to the highest bidder, after the jump. Next, the Ruth y Fish files.
This is not the environment in which to mess with Cuomo. Particularly if you are John Thain. Seriously. Says Dealbook:
Merrill Lynch’s former chief executive, John A. Thain, was questioned by the New York State Attorney General Office last week. In a six-hour session [complete with stress positions, extended standing, cultural humiliation (for example, exposure to retail banking executives, state employees), exploitation of phobias (for example, the use of dogs, poor people, coach class seating)]* Mr. Thain answered wide-ranging questions about the bonuses he paid Merrill employees and about his interactions with officials at Bank of America, which acquired Merrill at the end of the year.
Attorney General Andrew M. Cuomo was not satisfied by Mr. Thain’s answers, and he filed a motion on Monday asking that Mr. Thain return and provide more details about the bonuses .
What did the Thain dish? Take a look after the jump.
* Dramatization. May not have actually happened.
[voice, body shaking] “We’re really gonna to make it work this time, promise…Seriously, really, from one Joe to a Bro.”
AIG Is In Talks With Government To Secure Additional Funds to Keep Operating [CNBC]
