$$$ Draw the blinds: another protest at AIG is planned for Friday. [IACenter]

$$$ Did anyone else think GM’s pledge for ‘deeper, harder, faster’ restructuring was a reference to this? Just us? [Guardian]

$$$ The Grim Math At GM [WSJ]

$$$ Layoffs at RSM McGladrey: “45 people today in their NY office, including a bunch from their hedge fund group. Lots of Jews among the axed, right before Passover.”

With President Barack Obama showing the ailing U.S. auto industry some tough love Monday, POLITICO wondered — what’s …

… in the driveways of White House aides? A lot of foreign cars, as it turns out.

Explore the depths of auto-psychoanalysis, after the jump.

Supposedly “the US head of institutional sales, head of risk for one of the engines and the head of structured finance and prime brokerage are all leaving, as well as one of the former CIOs.”

Some recovery.

The Obama Portfolio (Since Inception): +12.35%

Earlier: The Obama Portfolio

So! A dear friend of Dealbreaker is one of the few b-school applicants to be granted admittance to Club 2 Year Vacay this year. Tuck and Stern have already been crossed off the list (too Hanover, too Nouriel), with Columbia and University of Chicago remaining. Here we have a dilemma, which you can probably guess. The lady in question can’t decide. Difficult as it may be for Dealbreaker readers to form opinions, we figured we’d throw this one at you. Considering all factors (quality of student bodies, social life, chances of getting a job in New York post-grad, etc) please make a decision for her now. Begin. (Oh, and answers like “Columbia” or “Chicago” aren’t helpful. You must elaborate.)

No, just messin’ with ya, but the old boy *was* spotted taking notes at the Senate Finance Committee’s hearing on the emotionally disturbed asset relief program, presumably for the new flick. Will he be taking a meeting with Maxine Waters, or at least stop by her office to see what’s a poppin’ later today? Obviously our fingers are crossed.

Moore wore his trademark baseball cap, standing out among the sea of suits. He sat in the third row, chatting with a dark-haired man as TARP cop Neil Barofsky, Elizabeth Warren, who as Congressional Oversight Panel head is overseeing the banking bailout, and U.S. acting comptroller general and Government Accountability Office chief Gene Dodaro addressed lawmakers.

Moore slipped out of the hearing before it ended, avoiding the reporters.

Well, Global Alpha has seen better days. Anyone get the sense that this was a few years too late? Or is that just us?

Goldman Sachs Group Inc. (GS.N) said the heads of its computer-driven investments and Global Alpha, once the bank’s largest hedge fund, retired on Tuesday.

Departing were Mark Carhart and Raymond Iwanowski, who helped run Global Alpha and a group that managed quantitative investments. They left the bank along with research co-head Giorgio De Santis, the bank said.

The departures follow two years of disappointing performance at Global Alpha, where assets fell to $2.5 billion last year from a peak of $12 billion in 2007.

Goldman Sachs’ Global Alpha co-heads retire [Reuters]

Here’s a thought experiment:

What would you make of the Deputy Prime Minister of a large country that insisted that, compared to the rest of the world, centralized regulation like price or production caps would be difficult to impose in his country because of the independent nature of the country’s legal system and the sanctity of property rights? Sounds reasonable, no?

Then what if I told you that the CEO of the same country’s privately-held and largest energy conglomerate was arrested on almost certainly politically motivated fraud and tax evasion charges? That he was sentenced to nine years in prison and a controlling interest in the firm was then transferred to a successor? And if that that successor was forced to flee to Israel to avoid similar charges? And if I pointed out that what followed was a mass exodus of the entire Board of Directors and most of the executive corps to foreign shores to avoid arrest and prosecution? If I then told you similar stories about the larger media and banking interests in said country, you might find our Deputy Prime Minister’s claims a bit fantastic, no? Consider:

“It would be irresponsible for Russia to join OPEC because we can’t directly regulate the activity of our companies,” he said, as nearly all are privately owned.

Yet, he supports “coordinating actions” with the cartel because of the shared interest in lifting prices. He said Moscow isn’t in a position to mandate lower production, but Russian oil companies will curb output this year as falling prices cut into their ability to produce.

He figured that if oil slides back under $40 a barrel, Russian output this year could fall twice the amount the government now forecasts, or about 300,000 barrels a day.

Oh, and apparently:

“In Post-Soviet Russia, falling price reduces demand.”

Moscow Warns on Low Oil Prices [The Wall Street Journal]

And with the fare hike, he fo sho won’t be able to swing it! Peter Madoff, brother and colleague of Bernie was denied an appeal to not have his assets frozen today, though god love this family, it wasn’t for a lack of trying. According to Pedro’s lawyer Charles Spada, Ponzi Boy’s bro “can’t spend a dime, can’t take a subway ride, can’t buy a loaf of bread, can’t [cough, cough] pay his attorneys…I don’t know that he can afford a MetroCard.” Hopefully he’ll be able to rely on the kindness of sister-in-law Ruth, who, for now, can still cover the Jarlsberg, home in Palm Beach, and costume jewels.

When John Mack was almost lured into enough of a false sense of security (or perhaps a conspiracy) to nearly disclose his plans to raise new equity^* and pay back TARP money by CNBC’s Erin Burnett we thought it might be curtains for the guy. We are also not sure how he could have lived with himself after making such a slip it in front of Lloyd’s of Goldman. Our Bess Levin was (virtually) there to capture the moment:

Burnett: Let’s talk TARP…you’ve said you want to return it after the stress test, as early as April…do you still want to do that?

Blankfein: We didn’t say shit. TARP has never been permanent capital…we will return it, at some point, with interest.

Burnett: How ‘bout you, Stanley?

Mack: We’re in the same position…we can pay it back…we’ll do it if our regulator wants us to.

Burnett: Okay, more about TARP. If you give the money back, and something catastrophic happens again, and you need the money will you—

Mack: Erin, stop. This was not what the meeting was about. We talked about what are we going to do, how are we going to do it, what are the issues.

Burnett: Your stock is high again…are you going to raise equity?

Blankfein: We’ll be talking to our regulators.

Mack: I need to talk to my board first. As much as I like CNBC, I’m really not going to go there.

Yes, yes. Everything is fine. And how dare you ask that question, you little minx. You’ll never work in this town again! (Phew, that was close). Oh, wait:

Morgan Stanley Chief Executive Officer John J. Mack, who will run the largest broker-dealer when the acquisition of Smith Barney from Citigroup Inc. is completed later this year, told employees in a nationwide conference call yesterday that 2009 will be “a difficult year,” mostly because of so many toxic debts that have yet to be cleansed from the bank’s holdings. Among the 529 financial institutions that received loans from American taxpayers, according to data compiled by Bloomberg, Morgan Stanley isn’t yet prepared to pay back the $10 billion it received from the U.S. Treasury in October.

Earlier: Coffee Klatsch With Mack and Blankfein

Mack Warns Morgan Stanley of ‘Difficult Year’ in 2009 [Bloomberg]

* Not that there are now or will be any such plans or that such plans are or are not being considered or that said plans exist or could ever be said to have existed.

And thank god for that, otherwise Time would be looking at the business end of a serious hissyfit that I’m sure we don’t have to tell you would escalate in a back alley assault. After nominating Gaspo for its list of the 100 most influential people of the year, and suggesting that a reason one wouldn’t want to vote for C to the G was that he once prognosticated that AIG would never go bankrupt, the mag has correct the error (yesterday Chaz told Dealbreaker, “The only thing I ever said, in December 2007, was that they had enough capital to survive at that point,” and demanded a correction and cover story apology).

Sayeth The Man Without Sleeves: “When alerted, they said they would investigate and then
changed it. They are stand up people. Vote for Chazzy today.”

Honestly, bless the hearts of the Connecticut branch of the Madoff Movie of the Week. Since losing basically all of Fairfield Greenwich clients’ money to Ponzi-boy, they’ve been trying *really* hard not to flit about telling everyone, but mostly mags and newspapers, how great is to be a Noel. But cutting out press cold turkey is hard! And it’s not like the family has posed for any spreads in Vanity Fair lately which, completely sincerely, we think shows enormous restraint. Look, the road to rehabilitation is tough, sometimes you’re going to have slips, like when you can’t help but saying “Okayyyy, Wall Street Journal, I’ll talk to you on the record about the sweet ass life of a Noel. Oh, but you gotta make sure to mention we’re victims at least five times, k? ‘Cause I’m supposed to be playing one.” It feels good, you know? It feels right. It feels like coming home. Let’s do this:

With an apartment in Manhattan and a mansion in London, and then in Madrid, a butler, a chauffeured car and a private jet, he did just that. The Colombian threw lavish parties, assembled an impressive art collection and held court from his Falcon yacht anchored off the Spanish island resort of Mallorca, where he has a hacienda. Friends he entertained included the Duke of Marlborough and Prince Felipe, the heir to Spain’s throne, and top models like Elle Macpherson.

Friends say Mr. Piedrahita settled down after his marriage to Ms. Noel. He merged Littlestone with Fairfield Greenwich in 1997. Shortly after, he moved to London to a mansion on Chester Square. He entertained lavishly. One friend remembers a dinner party flush with English dukes and members of European royal houses. “The only dukes not there were the Dukes of Hazzard,” joked Mr. Botero.

In Madrid, where he moved in 2003, Mr. Piedrahita’s lifestyle became even grander. He commuted between Madrid and London on a private Gulfstream jet which was parked at a military base close to Madrid. He was invited to a costume party at a Russian estate where everyone dressed up as czarist-era aristocrats. He went hunting for pheasants with the cream of Spanish society.

*Yes, we know, but let’s be serious, this is more fitting.

Unless you have been sleeping under a rock for some extended period of time, you will remember that Porsche is not just a German automobile manufacturer, but also a “fiendishly clever,” hedge fund in its own right. Scant surprise then that the Teutonic threat is realized.

Net profit in the first-half ended Jan. 31 jumped to €5.55 billion ($7.33 billion) from €1.26 billion in the same period the previous year. Pretax profit climbed to €7.34 billion from €1.66 billion. The increase stemmed largely from cash-settled option transactions in VW shares. Income from these transactions rose to €6.84 billion from €850 million a year earlier.

As you might remember, accusations of share manipulation began to fly almost immediately after the incident, as Germany’s disclosure laws did not require Porsche to reveal positions in VW that were suggestive of a takeover. Now, even that hitch is clear.

Some hedge funds, which stood to face billions of dollars in losses, accused Porsche of misleading them about its intent to gain full control of VW. On Oct. 29, BaFin, Germany’s securities regulator, said it opened a formal investigation into VW’s share-price movements for signs of market manipulation.

However, BaFin said Tuesday it has halted its probe. “We didn’t find any indications for a share manipulation,” a BaFin spokeswoman said.

Related: Many Lamentations Heard From Hedge Funds

In Germany There Is No Age Of Consent With Cash Settled Options

From the front lines of a massacre:

I am a second year analyst in Private Wealth Management who just found out from my office’s Business Unit Manager that all second year analysts will have to wait until December, six months after their two years are up, to find out if they will get a bonus. Second year analysts are usually given something on their way out.

And yet…


Related.

Chin up, mon chichis. You’ll always be welcome at the Hawaiian Tropic Zone (for now).

SOHO House no longer wants to be a place where bankers flock to drink and flirt. Sources told Page Six several financial types, already hit by the economy, had their egos slammed when they were notified by the club that their membership would not be renewed as it was returning to its “artsy” roots. Soho House US operations director Mark Somen told us, “We recently celebrated our fifth anniversary and want to make sure we are staying true to our creative roots.

This is admittedly a little under the wire, but if you’re sans job/will to live today, perhaps consider participating in an event for your kind going down at Tompkins Square Park, circa 1pm. It’s called the Unemployment Olympics and only those who can prove they’ve been canned will be allowed to get in on the action. RVSP to organizer Nick Goddard here. Guessing you should do that rightnow, and then commence raising your blood alcohol level to the state that’ll get you through things like the “Fax machine toss.”

Sure, ABC News reports that AIG’s most famous alum is probably going to be brought up on federal fraud charges for his role in kind of bringing the company down. And yeah, when asked for comment on the sitch, he sort of acts like a dick, being all, “I don’t want to talk about it.” But the fact of the matter remains: Cassano, once a regular Jon Lovitz doppelgänger is looking better than ever! He’s definitely lost some lbs, and there just seems to be a certain joie de vivre going on around him. Perhaps it’s the daily bike rides? That’s what we’re thinking. Unfortunately, the new look will probably work against Joe C, once he’s placed in a federal Pound Me In The Ass Prison, but we’ll cross that bridge when we get there.

JP Morgan Takes The Lead In Rights Offers (Bloomberg)
JP Morgan is pretty much kicking the shit out of their nearest competitor in arranging rights this year - they’re sitting at $12.8B to Goldman’s $6.3B (UBS is tied for third with an Italian bank at $3.1B).

“There’s a massive shift in terms of market share among the investment banks,” said Patrick Lemmens, who helps manage about 10 billion euros ($13 billion) at Robeco Group in Rotterdam, including JPMorgan shares. “The also-rans will get substantially less market share, and JPMorgan has the advantage of being able to use its balance sheet better than others.”

MS Close To $6B For Real Estate Fund (Reuters)

“Morgan Stanley (MS.N) is close to raising $6 billion for a new global property fund, falling short of its earlier target of $10 billion, sources with direct knowledge of the plan said.

The Morgan Stanley Real Estate Fund VII Global, the latest in a series of its international property investment funds, originally targeted to raise $10 billion, Reuters reported in September.”

Google Launches VC Fund (WSJ)
“Google Inc. announced more details about its highly anticipated venture-capital fund, in which it plans to commit roughly $100 million over the next year, said people familiar with the matter.

In a blog post Monday night, the company announced William Maris, a former entrepreneur whom Google hired to start the fund, and Rich Miner, a former executive in its mobile unit, as managing partners with the fund. Their roles and the expected announcement were previously reported in The Wall Street Journal.”

Fortis Posts $37B Loss (NYT)
The former Belgian powerhouse reported a $37B loss for 2008, proving it can play with the big boys - now all they’re waiting on is a takeover by the French.

“The company and the Belgian government reached a revised deal on March 6 with BNP, under which the French bank would pay €2.9 billion in shares for 75 percent of Fortis Bank; that’s about €510 million more for shareholders than in the previous offer. The new deal also provides guarantees that the insurance unit will remain in business. BNP Paribas will become the largest euro zone bank in terms of deposits if the deal goes through.”

It’s Not Just An American Thing (WSJ)
The French, not to be outdone by their American counterparts, are seeking to limit executive pay and kill stock option disbursement until the end of 2010. The article cites the need to quell French public anger over pay, but the French people bitch incessantly about any and everything, so I can’t imagine that’s the only thing that was at play here. Or maybe it was.

“To avoid further flare-ups, Finance Minister Christine Lagarde urged Medef, the country’s largest business group, to set up a “committee of wise men” to help companies adjust managers’ pay when they cut jobs. But, in a letter to Medef, Ms. Lagarde didn’t specify what the government might consider appropriate pay for managers at such companies.”

Global Banks To Write Down $17B More (Reuters)
“J.P. Morgan Securities forecast global wholesale and investment banks to incur additional pretax writedowns of $17 billion for the rest of 2009 to reach mark-to-market valuations of structured credit assets.

The brokerage said it saw the highest need for further pretax writedowns at Deutsche bank (DBKGn.DE) ($4.9 billion) and Barclays Plc (BARC.L) ($3 billion).”

Contracts Now Seen As Being Rewritable (NYT)
“The depth of the recession and the use of taxpayer dollars to bail out companies have made it politically acceptable for overseers to tinker with employment agreements.

So federal and local governments are looking for ways to pare payouts, endangering the promises made before the financial storm to people like Wall Street traders, automobile workers and garbage collectors.”

$$$ Leitch on Citi Field: What It’s Really Like [Daily Intel]

$$$ Goldman’s Trott, Buffett’s Banker, to Leave Firm [WSJ]

$$$ University of Florida business professor promptly fired for being “stoned” during class. [LWPB]

$$$ How I helped build the bomb that blew up Wall Street. [NYM]

$$$ The Executive Who Brought Down AIG [ABC News]

$$$ A slightly belated F You! goes out to BarCap. You know what you did. (Related: mobile Dealbreaker, optimized for Blackberry and iPhone, is coming this week).

The [AIG] employees were told, “If you agree,” to write checks for $2,100 from themselves and their spouses and to send them to Mr. Dodd’s campaign within four days. They also were to ask the senior members of their management teams to do the same and send copies of their checks to the company.

The Dodd campaign collected $162,100 from AIG-FP employees and their spouses within six weeks of the e-mail, according to data from the Center for Responsive Politics and the Federal Election Commission.

In a way it is a fantastic thing that purely legal transactions of the type enshrined in the First Amendment should give cause for such attention after a legislator acts in a fashion that might (gasp) take account of her constituency that the Washington Post later uses them to skewer the likes of Dodd.

America! Fuck yeah!

AIG chiefs pressed to donate to Dodd [The Washington Post]

Update: I think I failed to express the appropriate level of cynical amusement in this post. I do truly enjoy the perpetual game of whack-a-campaign-mole that the system of political giving in the United States has created. Does anyone else think it would be a good idea to require that campaign monies returned due to scandal be given to the opposing political party rather than some cushy charity? It always rubbed me the wrong way that, as a Senator, your shady contribution collection return/adjustment likely put your name in lights amongst the highest donors for [fill in the blank]. An immediate shift of the funds to the party of your closest contender in the last general election, would make for an interesting disincentive.

“God damn. Sure went down the toilet on that ugly bitch.”

Rough day for the First Asset Allocation.

The Obama Portfolio (Since Inception): +11.61%

Earlier: The Obama Portfolio

Unbearable sadness from the House of Dimon today. From the front lines: “Ten percent let go from Securities Prime Brokerage. F&O, Global Clearing to follow.”

Yeah, probably not but perhaps he is planning on making a guest appearance on Willy’s show and hitting his former rival network where it hurts, per some suggestive tweeting?

And while we’re talkin’ tweet, can we speculate as to what this is about?

And one last one, for the road, which I don’t think I’m alone in saying is completely unfair we didn’t get to see played (mud wrestled) out on-air:

Update: TVNewser thinks it’s a fake account. We’re not convinced. It’s not funny enough to be fake and when we went back just now to check it, the CG burn had been removed, which strikes as something you’d do if it *were* real, as it’s slightly awk (though entirely encouraged around these parts). D-Man, if you’re reading, get in touch and set us straight!

Update II: Okay, we’re still not *entirely* convinced it’s fake, but it’s poss, based on these two.

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: [Banks / Borrowers] are quietly declining to [take / surrender] possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

The so-called [bank / borrower] [walkaways / holdouts] rarely mean relief for the [property owners / banks], caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they [still owe / are owed] on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.

[…]

“It is what some of us think is the next wave of the crisis,” said Kermit Lind, a clinical professor at the Cleveland-Marshall College of Law and an expert on foreclosure law.

Banks Starting to Walk Away on Foreclosures [The New York Times]

Wow. That whole “Bankruptcy one option of many” thing lasted about, what, three whole hours?

Updates to come. The situation is fluid.

If you thought your financial services counterparts across the pond were a bunch of pussies who couldn’t hold their own in fight, you thought wrong. Although JPMorgan London et al have sent out memos telling employees to dress down, lest their unofficial uniforms give them away, and to essentially hide under the covers and not come out til the G20 is over (and what is expected to be angry mobs of demonstrators looking for banker blood subside), not everyone is quaking in their boots.

In fact, some, like Graham Williams, sound like they’re looking for a fight and you know what? We dig it. The 66 year old insurance company director told Bloomberg that, contrary to popular belief, “We’re not all pansies.” Think he’s bluffing? Think again! “Most us have played rugby or boxed,” said Williams. “If any of those guys do get violent against us individually because we’re wearing a suit, we will take action.” Also, lay your fears to rest that W won’t have an octogenarian brother, equally attached to his dress pants, watching his back.

Alan Cornelius, 81, who was wearing a red tie and blue- striped shirt, vowed campaigners wouldn’t make him change the sartorial habit of a lifetime in a city where Savile Row tailors hand stitch bespoke suits for princes and financial royalty.

So, we just spoke with Time 100 finalist Charlie Gasparino and let’s just say that *someone* can expect a call from Gaspo’s lawyer. At issue: in the cons section for why Chaz shouldn’t be named one of the 100 most influential people of the year. According to T mag, CG once predicted that “AIG would never go bankrupt.” Not so says The Man Without Sleeves! “The notion that I was nice to AIG is batshit insane,” C to the C told us. “AIG’s flacks hate me. The only thing I ever said, in December 2007, was that they had enough capital to survive at that point.” Chaz is demanding a correction and— and please, please, please let this happen— “a cover story apology.” Regarding who should be named the most influential person of the year, Gaspo says Meredith Whitney, second only to himself.

By now you’ve read the article that ran in yesterday’s Post about the “scores” of laid off female professionals in town who’ve taken up work as working girls. Such as Randi Newton, seen at left, a former financial analyst at Morgan Stanley who got canned and decided to climb up on the pole to make a few shekels (“A few nights after I got laid off, I went with friends to a strip club to get drunk and forget my unemployment troubles,” Newton said. “The manager offered me a job as a dancer. I thought it was different. And fun.”)

Cuts are said to be going down for Bearpont Morgan Chase’s institutional sales team in San Fransisco, circa now. In related news, a “house cleaning” is said to be occurring at Bank of America as we type.

Should the main feature of the Tickle A Vickle booth,* Vikram Pandit? They all came out of Wednesday lunch date describing the event as a beautiful, life-altering, orgasmic experience, so it’d certainly come as something as a bitch slap for Obama to turn around and fire them, but The Deal is thinking Rick Wagoner’s canning is indication Obama is finished playing Mr. Nice Guy with TARP recipients. Obviously with the shelving of his private Zen garden, Pandit has little reason left to want to keep this gig, but he probably also isn’t looking to get thrown out on his ass. As for Ken Lewis, he’s already sworn we’ll have to drag his dead lifeless body out of the place, so there could be some friction there, as well.

*Like a kissing booth, but with more jolly elfin’ fun.

The situation is fluid.

Obama (In his capacity as the First GM Human Resources Director): Wagoner is moving on to pursue other opportunities.

Obama (In his capacity as the First Managing Director, Investment Banking/Advisory): Chrysler needs a deal with Fiat.

Thought there weren’t any employees left to layoff at the slightly more tax evade-y Swiss bank in town? Think again! Reuters reports that UBS has plans to cut another 8,000 jobs, possibly (though not definitely) on top of the 5,000 senior and management positions it said would be eliminated two weeks back.

Obviously we must take into consideration that the Post uses its column inches to go after rivals, including by not limited to Fox Business’s competition at CNBC, and therefor the following may not be true. That being said, we pray to the god of Gasparino it is. As you know, Dylan Ratigan has never tried to hide his desire to be a late night TV host. But we assumed it was, like, a pipe dream, no more likely to come true than Jimmy Cayne passing a drug test, and not something D-Rat actually though possible. Apparently, that may not be the case. According to Page Six, in addition to his producer being “rude and disrespectful,” Ratigan also “bolted [from the network last week] because he was pissed off he didn’t get Conan O’Brien’s slot since he really wants to do a talk show.”

But it may include a business news reporter best known for whaling mercilessly on the Boflex moments before going on air in order to give his scoops that added air of intensity. That’s right, kemo sabes, there’s a possibility that Charlie Gasparino will be named one of the 100 most influential people of the year, if he plays his cards right (i.e. successfully intimidates you into voting for him via threats of physical harm). Take a moment to let that sink in. Other finalists, who you can endorse this morning in a concerted effort to make the list that much more irrelevant (but way more hilarious!) include: Jim Cramer, Prince Alwaleed bin Talal and Ken Lewis. How KL’s unofficial number 2 at Bank of Amerillwide, Angelo Mozilo, got snubbed, we have no idea. We’re also failing to wrap our minds around Vikram Pandit’s name not being thrown in the hopper, though many of you will be pleased to see his bondage and leather loving nemesis, Meredith Whitney, made the cut, as did Ponzi-boy Madoff. And in what appears to be a (fleeting) moment of lucidity by those compiling the noms, Jamie Dimon, Ben Bernanke and Lloyd Blankfein were tossed in, just for shits. No Paulsons, Chanoses, or Einhornies, though. Let’s not go crazy.

The 2009 TIME 100 Finalists [Time]

Certain networks just attract conspiracy theorists and the theories that these theorists theoretically theorize with the same level of surreal magnetism that acts between big oil and Maxine Waters. That’s not to say, for instance, that Goldman Sachs isn’t totally responsible for spiking oil prices up to nearly $150 a barrel, unleashing law enforcement on Governor Spitzer at a particularly (in)opportune time, sinking Bear Stearns in retribution for that firm’s failure to pitch in to rescue LTCM, and arranging to demoralize Tim “The Safecracker” Geithner and Ben “The Beard” Bernanke by getting them to wear the same tie while attending recent Congressional hearings,^* just that smoke and fire may or may not be totally related.

Goldman, at least, appears mostly to have an appearance of quiet (and loud) competence. It is not all that intellectually pressing to imagine Goldman at the center of a plan to irradiate a bunch of gold (see what we did there?) and thereby reduce available supply to spike the price and boost the value of the long positions it may or may not hold in the metal (“Gold-man Sachs-en-fin-ger” even sounds cool when Karaoked loudly to the theme song). But, it seems to us, that this sort of thing begins to collapse in on itself when AIG becomes the supposed criminal mastermind organization at the center of a plot complex enough to involve more than three laptop computers with disparate versions of Windows. So, when we see posts like the one Zero Hedge penned this weekend (“AIG Was Responsible For The Banks’ January & February Profitability”) you can color us skeptical- at least of the conspiracy laden parts. (Not that we do or do not love Zero Hedge, but still). We have no doubt that AIG poured an Imperial Asston of cash into a series of counter-parties in January and February. What, exactly, is mysterious about this?

Study Has Banks Admitting Pay Structure Was A Contributing Factor (WSJ)
“Banks almost unanimously agree that their compensation packages contributed to the global financial crisis but still are struggling to correct some of the flaws in their pay structures, according to a survey of financial institutions due for publication Monday.

The survey, conducted by U.K. management consultancy Oliver Wyman, was commissioned by the Institute of International Finance, a global association of banks and other financial companies based in Washington, D.C. It found 98% of responding banks “believe the compensation structures were a factor underlying the crisis.”“

Thoughts On Ratigan Leaving (MarketWatch)
People think Dylan Ratigan is the Che Guevara of business news.

Geithner Says Some Banks Need ‘Large Amounts’ Of Assistance (Bloomberg)
The article has a couple of strong points, most notably that there’s an open admission that if this plan changes (or there’s a hint at change, or someone looks at it wrong) it’s going to fuck any chance of success.

“”We still don’t have the transparency and oversight,” McCain said on “Meet the Press.” He said his biggest concern is that the cost of stemming the financial crisis will worsen annual deficits projected to exceed $1 trillion for many years.

“What I am most worried about is laying the debt on future generations of Americans,” he said.”

Blackstone Tells SEC To Get Bent (Bloomberg)
The SEC asked both Fortress and Blackstone to disclose their performance in their financial reports; Fortress agreed, Blackstone declined. You have to wonder what the long term agenda is going to be for the reporting agencies: there’s going to be a marked change to the regulatory landscape, of that we’re certain - but where and how the power fall have yet to be seen.

“In the prospectus for its initial public offering, Blackstone said it intends to be a “different kind of public company” whose managers take a long-term perspective. The firm won’t provide earnings forecasts because the performance of its businesses may vary in “significant and unexpected ways” from quarter to quarter, according to the filing.”

China Looks For Global Currency (Reuters)
This is fun:

“Beijing’s ultimate goal is to replace the globally dominant dollar with a beefed-up Special Drawing Right, the International Monetary Fund’s in-house unit of account, which would become a “super-sovereign reserve currency.”

[…]

However, with 5,000 years of history behind it, Beijing is ready for a long game. Zhou knew his trial balloon would immediately be shot down, save for backing from Russia. Hence his acknowledgement that creating a new international monetary order would require “extraordinary political vision and courage”.

Translation: Beijing realizes that a currency does not lose its global domination overnight. Even after the United States overtook Britain in economic size in the late 19th century, it took two world wars that drained Britain’s Treasury and its military might before the dollar supplanted sterling. The American grandmaster will not surrender his title lightly.”

Mr. Wagoner has been CEO since 2000 and has managed the company through some of its most difficult moments. Over the last four years, GM has reported losses of $82 billion and nearly ran out of money at the end of 2008 before the U.S. Treasury Department provided emergency loans.

GM’s Wagoner Will Step Down [The Wall Street Journal]

$$$ A Glance Back at Cramer vs. Cuomo: “Cuomo’s about confiscation — genuine communist,” Mr. Cramer said. “The Chinese are capitalist, we got a communist.” [NYT]

$$$ Rich: The cost to insure the debt of Merrill Lynch surged on Friday after Kenneth Lewis, Chief Executive at Bank of America (BAC.N), which acquired Merrill, was reported as saying that the U.S. should consider separating commercial lenders from investment banking activities. [Reuters]

$$$ Bernie Madoff on a baseball card [CNN Money]

$$$ Job of the Week: Deutsche bank needs a Traded Credit Products risk analyst. YOU. [DB Career Center]

Attention all D-Rat fans. If you thought you’d get once last chance to watch the Fast Money ringmaster at work before he sails off into the sunset of—finger crossed— late night television, think again!

In what was a mutual decision, [CNBC’s Brian] Steel tells TVNewser, “Dylan has told us he is leaving effective today….Due to the serious economic times in which we live, we made a decision that it would be a distraction for Dylan to host ‘Fast Money’ today.”

Melissa Lee is expected to fill in on “Fast Money” for the time being.

Bank of America Corp. plans to increase some investment bankers’ salaries by as much as 70 percent following the takeover of Merrill Lynch & Co., people familiar with the proposal said.

Bank of America, which has received $45 billion of taxpayers’ money, may raise the annual base pay for some managing directors to about $300,000 from $180,000, said the people, who declined to be identified because the final numbers are still under discussion. Salaries for less-senior directors would climb to about $250,000 from $150,000, and vice presidents would get $200,000, up from about $125,000, the people said.

Bank of America May Raise Investment Bankers’ Salaries by 70% [Bloomberg]

Ok, let’s take a little breather.

The Obama Portfolio (Since Inception): +15.49%

Earlier: The Obama Portfolio

We aren’t laughing with you, Max, we are laughing at you.

“So any country looks at those examples and they say, ‘You know if we get out of the U.S. dollar, does this mean that U.S. Marines are going to show up in our backdoor and start to cause mischief?’” Keiser said. “That’s a legitimate concern these countries have.”

BBC Host and HuffPo Blogger Warns of U.S. Military Action if China Pushes for Global Currency [Business and Media Institute]

The CEOs arrived today at the White House alone and escorted by other company executives; some were quickly ushered in through the security gate by Bartlett, while others were forced to go through the usual routine for visitors. Dimon was asked to repeat his name twice and spell it once. He said he was there for a meeting with the president.

Bank CEOs Tell Obama They Are Working Toward Recovery [Bloomberg]

Got some time on your hands? Mail call:

Just saw Michael Moore in front of the Brown Brother’s building on Broadway in lower Manhattan. He’s conducting street interviews, presumably for the new big bad Wall Street movie. The guy he was interviewing looked like Joe the Plumber, I’m guessing that he’s getting a “working man’s” take on things.

We maintain D-Rat would be open to hosting a lifestyle show for bros, but apparently the (soon to be) former Fast Money ringermaster is considering a number of big dreams.

Insiders tell TVNewser the Page Six item is “overblown.” “It’s less about Krakower and more about him,” says the source. “He wants to be the next Letterman.”

And Ratigan has made no secret of that. “My dream job is late-night TV,” Ratigan told Marketwatch.com’s Jon Friedman in 2007. That summer, Ratigan also hosted a game show for CNBC.

Dylan Ratigan Departing CNBC [TVNewser]

If Ken Lewis’s li’l slip of the tongue with Erin Burnett is any indication, not so good! As you’re aware, Ken Lewis sent an email blast out a couple weeks ago letting everyone know that Bank of Amerillwide was profitable for January and February (not mentioning anything like writedowns or shizzle like that). Just now when asked by Burns how the firm’s been doing of late, K to the L said trading wasn’t “as good” in March, then paused when EB wondered if they were still profitable, said some stuff about deposit flows, got flustered, and was all, “uhh, we’re too far into the quarter to discuss, gotta go, k bye!”

Burnett: Was there tension? Did anyone get sucker punched?

Mack: No tension…just a bunch of brohamsters catching up.

Blankfein: cough:::bull shit::: cough

Burnett: What?

Blankfein: What? Oh, nothing, just hey from before.

Burnett: What did you talk about Lloyd?

Blankfein: I think we’re all on the same page here.

Burnett: Let’s talk TARP…you’ve said you want to return it after the stress test, as early as April…do you still want to do that?

Blankfein: We didn’t say shit. TARP has never been permanent capital…we will return it, at some point, with interest.

Burnett: How ‘bout you, Stanley?

Mack: We’re in the same position…we can pay it back…we’ll do it if our regulator wants us to.

Burnett: Okay, more about TARP. If you give the money back, and something catastrophic happens again, and you need the money will you—

Mack: Erin, stop. This was not what the meeting was about. We talked about what are we going to do, how are we going to do it, what are the issues.

Burnett: Your stock is high again…are you going to raise equity?

Blankfein: We’ll be talking to our regulators.

Mack: I need to talk to my board first. As much as I like CNBC, I’m really not going to go there.

“We spent a lot of time…there were CEOs in the room…we were asking questions.”

First the Big Guy inches in, now this.

Matt Andresen, who joined the Chicago-based hedge fund giant in 2004 after a stint running Island ECN, the largest electronic stock market in the U.S., has a non-compete agreement with Citadel and no plans for the immediate future, Wall Street Letter reports.

I like the ring of “no plans for the immediate future,” how about you?

Citadel Derivates Co-Chief Out [FINalternatives]

Lloyd Blankfein of Goldman Sachs, Kenneth Chenault of American Express, Kenneth Lewis of Bank of America and Edward Yingling of the American Bankers Association [WSJ]

Meanwhile, still waiting for a pic of these two bringing up the rear.

When we heard this morning that Dylan Ratigan was probably out at CNBC, after a supposed row with a producer over the matter of reading viewer e-mail on-air, which D-Rat did not want to do, as it would threaten to drag Fast Money into low-brow territory, our first thought was, but what will he do without FM and the gang? Down 4 bald domes (+ K. Fine), a garish set, rapid fire cuts of the camera, the general stench of midtown, and the opportunity, on any given day, to tussle with Charlie Gasparino, would D-Rat wander the streets losing his sense of purpose and falling into an emotional hole? Clearly, we were losing mid-morning sleep over the whole thing. But our fears have been put to rest, after stumbling upon this.

UBS analyst Michael Carrier apparently resigned today, 3 days after taking over Glenn Schorr’s coverage, who peaced earlier this week. Those inside the bank suspect he, too, is headed to Deutsche Bank.

The prez is meeting with Wall Street’s CEOs today, and Tim Geithner is also expected to get a little face time with his old pals, too. But! Apparently in advance of the reunion, Geithner is “in a closed meeting with Senate Banking Committee members,” in Dirksen 538, circa now. What do you think they’re talking about? We’re guessing a list of demands the Congressmen want Li’l Geith to bring back to the CEOs, such as “You’ll work for a dollar a year, taxed at 99.9% and you’ll like it” and “Please don’t forget your campaign donations.” Also: “Tough break on the Zen garden. We weren’t even planning on raising shit on that one, ‘cause it sounded spectacular.”

So, as you’re aware, this happened:

“This was a crisis that was fostered and boosted by the irrational behaviour of people who were white and blue-eyed, who before the crisis they looked like they knew everything about economics, but now have demonstrated they know nothing about economics,” President Lula da Silva of Brazil said, mocking the “gods of wisdom” who had had to be bailed out. “The part of humanity that is responsible should be the part that pays for the crisis,” he added.

Which is cool, we’re all for laying blame, ‘cause it feels good, but let’s get specific, and compile some data. So far, the following info has been compiled:

Alan Greenspan - Brown eyes

Sandy Weill - Brown eyes

Phil Gramm - Brown eyes

Joe Cassano - Brown eyes

Robert Rubin - Brown eyes

Christopher Cox - Brown eyes

Angelo Mozillo - Brown eyes

John Thain - Brown eyes

Henry Paulson - Hazel eyes

Dick Fuld - Brown eyes

Ken Lewis - Hazel eyes

The rest falls to you. Surely among the Dealbreaker audience there must be at least a handful of people who’ve gazed lovingly into the eyes of Chuck Prince.

President Lula of Brazil blames crisis on ‘white and blue-eyed’ [Times Online]

Thought Allen Stanford was going to go the way of Bernie Madoff? Think again! The cricket lover has denied his biz was a Ponzi scam, and claims that meddling bastard US regulators caused a run on Stanford Financial. Stan’s lawyer, Dick DeGuerin, agrees. “He’s not a swindler,” DeGuerin said yesterday. “This isn’t a Ponzi scheme. He was able to pay back every investor until the regulators came in like storm troopers, caused a panic, and his banks got nationalized in Venezuela and Antigua.”

Does the “so the hedge funds don’t get too rich” thing- the current justification for the idea of wrapping toxic assets up in a few big mutual funds- sound a bit like… I don’t know… bullshit to anyone?

There is political utility in enlisting Main Street investors. It could quell criticism that the government is giving a gift to hedge funds and other Wall Street titans, which helped spawn the financial crisis in the first place and which are now being tapped by Washington to help buy toxic assets.

This assumes lots of facts not presently in evidence. For instance:

• Hedge funds want to participate in the sort of programs that are characterized by the PPIP’s structure. (Not so far as we are hearing).
• That there actually are many “hedge funds” that qualify for programs like this after being screened for the $10 billion in current market value AUM limit.
• That anyone is going to make money waiting praying for these assets to appreciate sufficiently to provide decent annualized returns.

This looks quite a bit more like an opportunity for funds deeply under their high watermarks to extract some management fees from the public. Like the reason California managed to raise anything near (much less over) their $4 billion target. Like we are going door to door asking people to buy war bonds.

Call us cynics.

Fund Firms Look to Offer a Toxic Taste [The Wall Street Journal]

President To Have Finance Party (Bloomberg)
President Obama is inviting roughly the entire banking world to Washington today to get their input on rebuilding the economy and the new PPIP initiative - I think hopes are high that he can come out at the end of the day with the confirmation that some of the major banks will in fact be taking part in this (well, and further, think it’s a good idea).

“”For the economy to recover, for the stimulus to work, Main Street and Wall Street have to work hand in hand,” said Rob Nichols, a former Treasury official and now president of the Financial Services Forum in Washington.”

Barclays Unlikely to Need More Capital (WSJ)
Congrats on that.

Morgan Stanley Recovers Ground In M&A Rankings (Reuters)
“Morgan Stanley ranked first in the closely watched M&A rankings, or league tables, of investment banks in the first quarter, according to preliminary data from Thomson Reuters, reversing its fortunes after it missed out last year’s biggest deal — the $113 billion spin-off of Philip Morris International

JPMorgan Chase & Co (JPM.N) and Citi held onto their second and third spots respectively.”

(Goldman was fourth).

Ackman’s Ongoing Target Struggles (Reuters)
“In a letter dated Thursday and filed with the U.S. Securities & Exchange Commission, Ackman wrote to Target Chairman and Chief Executive and Gregg Steinhafel to say he disagreed with the size of the board.

We “have found no disclosure to the effect that the size of the Target Board has been changed from 13,” he wrote. Ackman noted that although former Chairman Bob Ulrich had recently resigned, the board “does not automatically shrink as a result of a resignation; rather, a vacancy is created.”

Ackman said if the company does not nominate a fifth director to fill a 13-member board, the issue should be jointly submitted for binding arbitration.”

Washington’s Inside Man At AIG (WSJ)
“AIG has paid lawyer James Cole and his firm, Bryan Cave LLP, about $20 million to oversee business practices at the insurer, according to people familiar with the matter. His reports on the company’s progress, periodically delivered to federal regulators since 2005, aren’t public.

Mr. Cole was installed inside AIG as a monitor, or independent consultant, as part of a $126 million settlement struck in November 2004 between AIG and the Justice Department and Securities and Exchange Commission.”

Czech PM Says AC/DC Was Behind “Road To Hell” Comment (Reuters)
Can’t make this shit up:

“Ousted Czech Prime Minister Mirek Topolanek says he was inspired by the rock group AC/DC when he mocked U.S. President Barack Obama’s economic stimulus plans as a “road to hell.”

Topolanek criticized Washington’s anti-crisis spending in a speech to the European Parliament on Wednesday.

“AC/DC played here (in Prague) last week. And their cult song ‘Highway to Hell’ might have led me in that very improvised speech to use the phrase ‘road to hell’,” Topolanek was quoted by daily Lidovy Noviny as saying on Friday.”

$$$ “Business Plus, an imprint of Grand Central Publishing (Hachette Book Group), announced today that it will publish a new book by former Secretary of the Treasury Henry M. Paulson, Jr. It is scheduled for publication in October 2009.” [PRNews]

$$$ Credit Suisse Says Investor Stole Hundreds Of Millions From Funds Unit [Forbes]

$$$ FDIC Seeks Comment on the Recently Announced Legacy Loans Program [FDIC, earlier]

$$$ This has been confirmed. [Bloomberg]

It strikes us that the PPIP plan requires a certain faith by the administration. Specifically, that balance sheets are not actually so underwater that even a 30% subsidy is a hollow gesture. What’s more, how sure is the administration that actual price discovery is something that any of these institutions actually want? Clearly, given the seller-financing leverage shell-game baked into the plan, the hope is that bids will buoy up. The problem, however, was perfectly highlighted on today’s FDIC call.

What, a banker effectively asked, if his participation were to “blow a hole in the capital?” Would capital requirements be waived or adjusted to keep the institution from running afoul? (Probably not). The meaning was somewhat veiled, but the broader implication was that actual price discovery would so impact the balance sheet and impact equity capital so negatively as to reveal this particular institution to be liver sausage.

What about bids or asks that resulted in no actual transaction? Would they, one voice trembled, constitute… (gulp, deep breath)… pricing data sufficient to trigger mark-to-market treatment? (Could be!)

As if on cue, another questioner wondered if the FDIC could force participation. (Probably not). You could almost feel the exhale of held breath.

Would participation exempt an institution from special examination? (Laughter). No exhale on this one.

Could it be that the biggest problem confronting the nation isn’t that Goldman Sachs might make money buying assets in the PPIP because Tim “The Safecracker” Geithner is in league with the devil? What if almost no one participated at all? One side of us thinks that we are reading too much into all this. Another thinks that if you can read between the lines you can almost hear the cracks widening.

Daily Intel reports that Citi will be laying of 65 members of its cleaning staff in two weeks. Obviously, this could not come at a worse time, considering that workers are about to break ground on new offices for Pandit and his peeps, and those discarded bags of chips and cans of soda littered around the conference room’s circle of Laz-y Boys ain’t going to clean themselves. Nor will the spit balls that Pandito and Co. plan to launch at the glass walls during brainstorming sessions. As you’ll recall, a key selling point for the $10 million project was the fact that it would create a “more open atmosphere…to encourage spontaneous meetings of executives.” With this recent revelation, I’m not sure they’ll be able to make good on their promise to “make Citi the best company in the world, bar none.” Unless of course the laid off janitorial staff is being replaced by analysts given the choice to be canned or shine Vikram’s shit for less than minimum wage. Which is entirely possible.

Oh noes. Bernie Madoff lawyer Ira Lee Sorkin is being impersonated over e-mail. Suspect numero uno would obviously be Ponzi-Boy, though the fact that the sender doesn’t ask for any money gives us a moment’s pause (but perhaps he does so in the follow-up).

From: [redacted]

Sent: Thursday, March 26, 2009 12:22 PM

Subject: FYI: Dickstein Shapiro Email Scam

A scam message is circulating purporting to be from Dickstein Shapiro LLP, and more specifically, Ira Sorkin. A sample of the message is provided below. These messages are not being sent from the Dickstein Shapiro email system, and the email address being used is ilsorkin@lawyers.com. We are currently investigating its origin and will be notifying the authorities with whatever information we can provide.

If you receive such a message, do not reply to it. Please forward it with the email’s header information (full header or show header option in most email programs) to EmailAdmin@DicksteinShapiro.com so that we can investigate further.

If you have any questions, please contact the Help Desk at x14888. Thank you for your cooperation.

___________________________________________________

From: Dickstein Shapiro LLP

Subject: Very Important

Date: Wednesday, March 25, 2009, 9:05 PM

Hello,

I am Ira Lee Sorkin Co-leader of the Firm’s Securities and the Defense Attorney to Mr. Bernard Lawrence Madoff Investment Securities LLC. Who was recently alleged for a
Ponzi scheme. I’m contacting you accordingly, because this crucial matter requires a matured partnership, co-operation and assistance to make a valuable change of
name to some of his assets and monies lodged with an offshore security company that might be discovered sooner or later by the Government.

Your view to this assignment is urgently needed,if you’re willingly to work with me on this, then get back to me asap.

Attorney Ira Lee Sorkin

Dickstein Shapiro LLP

I mean, you just have to give it up for the First Analyst. Hot. Hot. Hot.

The Obama Portfolio (Since Inception): +17.68%

Earlier: The Obama Portfolio

By telling its employees to lock the doors, draw the shades, get under the bed and hide. The Financial Times reports that in the face of questions about innocent stuff like helping clients evade taxes, from meddling bastard countries like the US, etc, Switzerland’s private banks have begun banning top executives from traveling abroad, “even to neighbouring France and Germany, because of fears they will be detained as part of a global crackdown on bank secrecy.”

The head of one leading private bank in Geneva said the growing determination of countries such as the US and Germany to tackle tax evasion and secrecy meant banks felt they had to take extra measures to protect employees.

“Some banks have taken this precaution,” he said. “If today I go to Germany to visit two banks I deal with…German customs can take me in and question me.”

“The partners are not leaving Geneva at all,” said a senior industry figure close to several private banks

Just to make sure, you know, no one gets any ideas after the Elven Safecracker convinced world markets that the United States might maybe perhaps abandon the dollar, Congresswoman Michele Bachmann parachutes in to the rescue.

Rep. Michele Bachmann (R-MN) has introduced legislation that would “bar the dollar from being replace [sic] by any foreign currency.”

Ah, yes. The Special Drawing Rights concept. What exactly does Bachmann have against the Chinese, we wonder. Someone should get to the bottom of this. Of course, the only candidate remotely qualified is the new, post extreme-makeover Maxine Waters.

Bachmann bill would ban global currency [The Hill’s Blog Briefing Room]

Disgraced Wall Street sheriff and noted hooker fucker Eliot Spitzer says yes! Angling for something (his old job? An adjunct professor position? A regular Friday night slot at Caroline’s?) Spitz-y Boy will be speaking next Tuesday at Columbia as part of the business school’s “Ethics In the Capital Markets” week. Register today!

Of course, that Maxine Waters is totally batshit fucking crazy is not news. That Maxine Waters somehow managed not to appear totally batshit fucking crazy, that, dear friends, is news. We, therefore, report to you today our unadulterated astonishment (and palpable disappointment) that Maxine Waters somehow managed not to appear totally batshit fucking crazy. In fact, her demeanor, once dominated by the lines and curves of the raving mad conspiracy theorist who lectures into empty radio waves on my local community access channel while wearing aluminum foil and polarized sunglasses in his faux-wood paneled basement, had today moderated to such an extent that, during her discussion, actual boredom began to threaten what had once been our keen anticipation. Hopes raised by the introduction of the topic of Credit Default Swaps were quickly dashed when Waters simply asked why they could not be banned, rather than suggesting that “Swaps of the Default be adjudicated by the CEO of the Treasury in her capacity as the international risk taker of note to prevent Gold Sack from selling insurance.”

During markedly rational questioning at today’s Committee hearing, Waters expressed strong signs of empathy, even to the point of physical mirroring of Tim “The Safecracker” Geithner’s manic tumbler opening gestures. Such a dramatic shift in approach and psychological sophistication could only be the result of some dramatic comings to pass. Among the alternatives that seem most likely are:

1. Neurological damage due to severe blunt-force head trauma
2. The sudden introduction of a high-dose course of anti-psychotic medication
3. The clandestine substitution of an imposer (actor/robot)
4. Aggressive religious deprogramming in conjunction with electro-convulsive therapy

After completing extensive research, we believe that the photographic evidence strongly supports alternative #2 listed above. (Thorazine seems the most likely candidate).

Oh, apparently there were some other people at the hearing too.

CNBC reports that the Attorney General, emboldened by the success of his campaign to get AIG bonuses back by threatening to name names and bust knee caps, is ramping up his investigation into the insurer. A source tells the peacock that Cuomo is getting ready to ask “more profound questions,” including whether or not CDS are being properly unwound and “If a Gasparino benches 350 in the woods and no one sees it, did it really happen?”

Ahead of next week’s G 20 summit, JPMorgan just sent out the following memo to employees in London, re: not getting maimed.

This is a reminder that the G20 meetings in London during the week of March 30 are expected to be accompanied by organized and impromptu protests. Although they have been planned for April 1 and 2, there may be small scale disruption at any time during the week commencing March 30. We have been advised by police and security to prepare for disruption to transport networks and to take precautions to avoid trouble with protestors. Below are guidelines J.P. Morgan is adopting, though details may vary between individual lines of business.

We would ask staff to be vigilant and report anything they may consider unusual to the GS&I Control Room on the number below.

Transport - April 1 and 2:

* Dress down: Staff are permitted to wear casual clothing — jeans/trainers — commencing March 30

* Avoid briefcases/branded bags/computer cases: Put materials in rucksacks or carrier bags where possible

* Arrive at work early: There is a strong possibility that the transport network will be targeted

* Alternative routes to work: Consider using mainline stations and walking/taking the bus to your office

* Do not drive or cycle: The road network may be disrupted and cars may also be targeted

* Avoid Bank tube station and the surrounding area on Wednesday, April 1, especially between 9.00 a.m and 12.00 p.m., due to protests centred on the Bank of England

* Avoid St. Pauls tube station on Thursday, April 2, due to the planned disruption to the LSE

From: redacted at do dot treas dot gov

Date: Thu, Mar 26, 2009 at 11:31 AM

Subject: Regulatory Reform Materials

Today, U.S. Treasury Secretary Geithner is testifying before the House Committee on Financial Services. He discusses the need for comprehensive regulatory reform to restore faith in the financial system. We thought you would be interested in and wanted to share the following information with you. We are happy to answer any questions you may have.

Reg Reform Fact Sheet [PDF]

There is an FDIC Conference Call for Bankers (and Investors now) discussing Legacy Loans Program under the newly announced Public Private Partnership, scheduled for noon.

1-888-790-3946

Passcode: 9857969

11:51: The hold music is…Tears In Heaven.

11:55: Now it’s the theme song from Trading Places (“Overture, Marriage of Figaro”). No joke.

12:06: Bair: “We don’t have all the answers now, so we want to hear from you. Put your thinking caps on.”

Questions:

Franklin Card: In terms of starting the program, do you have a time range for when you hope to be up and running? A month? Couple months?

FDIC: Not before we get public comments. We put a end date on that of April 10. We’re anxious to get it moving as quickly as possible. We need the input before we give a specific time frame.

Card: Is price discovery here going to impact accounting treatment for similar assets?

FDIC: Only if there are enough transactions to give several data points, and you have to remember that the leverage distorts the pricing to some degree.

Missed questioner’s name: Will participating in the program potentially put a hole in capital to the extent we have to remark assets? How will this effect our regulatory capital requirements? Will the requirements be changed to alleviate this problem?

FDIC: Uh… maybe.

Missed questioner’s name again: Will the FDIC, I don’t want to use the word ‘coerce’, but use this to nudge the bank along to sell the assets?

FDIC: The supervisory process is already there.

Guy: Can you give us a headcount of people you have devoted to this?

FDIC: No, next question.

‘Nother Guy: Has it been determined if there are bidders, and what the qualifications are to bid?

FDIC: We’re soliciting comments on that. There will be qualifications.

Dude from JPMorgan: breathing into phone

Operator: Sir, your line is open.

Dude from JPMorgan: Hello? Hello? Hello?

Operator: Sir, your line is open.

Dude from JPMorgan: Hello?

FDIC: We’re here. Ask your question.

Dude from JPMorgan: Sorry, I’m an analyst at JP Morgan who doesn’t know how to use a phone.

Guy from DE Shaw: What level of interest have you seen from the banks to participate in this process so far. If you’re not seeing a lot of participation, will you force people to?

FDIC: We just started this monday so…but yeah, people have told us they’re interested.

RBC Capital Markets: Will unaccepted bids impact mark-to-market marks?

FDIC: Depends.

RBC Capital Markets: If not enough banks want to get involved, is there something you can do to force encourage them to?

FDIC: We’re seeking comment on that.

Hedge funds investments in the PPIP will be levered, but the equity downside is still 100%. Apparently, though, that’s not enough for Rep. Kenny Marchant, who believes the private side doesn’t “have enough skin in the game.” He wants them taking this shit seriously, and in order to get them to do so, we’ve got to up the stakes. So, suggestions? Off the top of our heads we’re thinking 300% downside for the hedge funds that get involved. You know, a real Dantesque financial plan. We also like the idea of them getting burned but like, REALLY burned, as in third degree burned, via dipping managers in a life-sized deep fryer, with gigantic tongs.

Running list of the best slogans:

“The foxes don’t want us to guard the henhouse.” (Rep. Green)
“The paralysis of analysis. The paralysis of analysis. The paralysis of analysis. Analysis of paralysis.” (Repeated incessantly) (Rep. Green)

Zee frogs see your silly little proposed tax and say, “90%? You flaccid Americans! Try 100%.” Yes, mon chichis, dry your eyes ‘cause it could be so much worse. The French government is apparently set to “issue a decree banning bonuses and share options for executives of banks that have received government aid,” to be adopted as early as next week. Presidential “official” Claude Gueant said in a statement that “Capitalism is there to enrich all the population and not just the bosses.”

Sorry, we meant throw this up earlier, but got distracted by Barney Frank’s thoughts on the industrial revolution. Anyway, via the Journal, the li’l fella’s prepared remarks.

Thank you Chairman Frank, Ranking Member Bachus, and other members of the Committee. I appreciate the opportunity to testify about the critical topic of financial regulatory reform.

Over the past 18 months, we have faced the most severe global financial crisis in generations. Some of the world’s largest financial institutions have failed. Equity and real estate prices have fallen sharply, eroding the value of our savings. The supply of credit has tightened dramatically. Confidence in the overall financial system, in the protections it is supposed to afford for investors and consumers, has eroded. These financial pressures have intensified the recession now underway around the world.

Make room on the Goldman conspiracy bandwagon. As you may or may not be aware, oil pipeline giant Semgroup Holdings took $2.4 billion in losses last summer following the oil price spike. Semgroup had been short crude and paid for it dearly. The firm went under, filing for bankruptcy protection in July. At least one voice is blaming Goldman:

But now some of the people involved in cleaning up the financial mess are suggesting that Semgroup’s collapse was more than just bad judgment and worse timing. There is evidence of a malevolent hand at work: oil price manipulation by traders orchestrating a short squeeze to push up the price of West Texas Intermediate crude to the point that it would generate fatal losses in Semgroup’s accounts.

“What transpired at Semgroup was no less than a $500 billion fraud on the people of the world,” says John Catsimatidis, the billionaire grocer turned oil refiner who is attempting to reorganize Semgroup in bankruptcy court. The $500 billion is how much the world would have overpaid for crude had a successful scam pushed up oil prices by $50 a barrel for 100 days.

We love a good conspiracy theory and this one has all the ingredients:

Target of the theory is a powerful and somewhat mysterious entity? (Check)
Claim is difficult to (dis)prove? (Check)
Well known names attach to various tentacles of the theory? (Check)
The Daniel Pipes Criteria (the perpetrator always gains power, fame, money, and sex) is satisfied? (Check)

Excellent!

Did Goldman Goose Oil? [Forbes]

March 23, 2009

Dear Shareholder,

As you are aware, at the end of last year the Directors in consultation with Touradji Capital Management LP (“Touradji”) determined that the most appropriate way to handle the illiquid portion of the Fund’s portfolio was to recognize that they are beneficially owned pro-rata by every shareholder in Touradji Diversified Offshore Fund, Ltd. (the “Fund”) as of December 31, 2008. As such, the Fund transferred all of these illiquid investments to Touradji Diversified Holdings Ltd. (“Holdings”). The percentage of each shareholder’s capital account balance allocated to Holdings was 5.7%. Investors who invested in the Fund after December 31, 2008 do not have an interest in Holdings. It was originally intended that every investor that redeemed voluntarily in whole or in part as of December 31, 2008 would receive a non-voting interest in Holdings as a partial “distribution in-kind” of redemption proceeds and investors remaining in the Fund would own their respective portion of Holdings via their interest in the Fund.

Touradji has determined that it is in the best interest of the Fund to have such interest distributed to investors as a distribution in-kind so that all investors who were invested in the Fund on December 31, 2008 will hold their interest in Holdings directly rather than indirectly through their interest in the Fund. This distribution will be effective retroactively as of December 31, 2008. For example, if a limited partner held $1,000,000 in the Fund as of 12/31/08 and requested a full redemption, the investor would receive a $57,000 direct investment in Holdings and 848,700 in cash proceeds with the remaining $94,300 (10% of the post Holdings balance of $943,000) payable pending completion of the year-end audit which we anticipate to be completed by the beginning of May.

Likewise, if the same investor requested a 50% redemption, the treatment would be the same except there would be no portion held back pending completion of the year-end audit. Thus, the investor would receive a $57,000 direct investment in Holdings and $471,500 in cash proceeds with the remaining $471,500 still invested in the Fund.

Alpha magazine officially followed up yesterday’s list of 2008’s top earning hedge fund mangers this morning with its list of 2008’s top losers. Clocking in at number one, we are sad to say, is our favorite midwestern fund boss, Ken Griffin, who lost $2 billion last year, as opposed to making $1.5 billion in 2007. Eddie Lampert won the dubious honor of making the list two years in a row, having lost $1.1 billion in 2007 and $1 billion in 2008. Rounding out the top three was the industry’s resident Zamboni driver, who personally misplaced $900 million after taking in $750 million the last time around. Tontine’s Jeffrey Gendell, who has not previously qualified for the mag’s top earnings list, having only made $190 million last year, took a $625 million hit in ‘08 but please don’t worry about JG, ‘cause he’s got a plan to make it all back and then some. And, to reiterate, as one of the men above noted to his troops yesterday, “I know this looks bad, but don’t worry about me compadres. You should see our clients.”

Geithner Pushes For Oversight (WSJ)
At the Congressional hearing today we’re going to hear Geithner’s best on systemic risks to economy, and changes necessary to prevent them going forward (there’s good reasons for not making brash decisions when emotions are high, you end up with things like the Patriot Act). There’s talk of changes to the rules of risk management in Banks, though we’re not entirely sure what that might look like; the only thing concrete that we’ve seen from the Administration thus far is that they want the ability to seize or take over any institution that’s imminent collapse could cause damage to the economy. Good stuff.

“One area where the U.S. is departing from its European allies is the Obama administration’s approach to hedge funds, private-equity firms and venture-capital funds. Mr. Geithner is expected to ask Congress to require all of these firms over a certain size to register with the Securities and Exchange Commission and disclose certain information so government officials can determine whether their size or complexity puts the broader economy at risk.”

AIG Managers In Paris Resign, Billions Could Default (WSJ)
“The executives at Paris-based Banque AIG, Mauro Gabriele and James Shephard, have resigned in recent days but have agreed to stay on for a transition, according to people familiar with the matter. In the wake of their resignations, AIG must replace them to the satisfaction of French banking regulators.

If they don’t, French regulators may appoint their own designee to manage the bank — an outcome that could trigger defaults under the bank’s derivative contracts. The private contracts say that a regulator’s appointment of a manager constitutes a change in control, according to a person familiar with the matter; the provision is often included in derivative contracts where parties want to preserve a way out if something about their counterparties changes.”

EU Leader Condemns US “Road To Hell” (FT)
I’m sure it wasn’t meant like that, probably a cultural difference. Something lost in translation, or maybe, I dunno - he’s been drinking?

“”The US Treasury secretary talks about permanent action and we, at our spring council, were quite alarmed at that … The US is repeating mistakes from the 1930s, such as wide-ranging stimuluses, protectionist tendencies and appeals, the Buy American campaign, and so on,” he told a European parliament session in Strasbourg. “All these steps, their combination and their permanency, are the road to hell.”“

PIMCO Calls For Fed To Double Balance Sheet (Reuters)
I’ll leave it to you: Genius or Mad Man?

“Bond giant Pacific Investment Management Co said the Federal Reserve needs to double its balance sheet up to $6 trillion to replace the amount of wealth destroyed in the United States, an executive said on Thursday.

Liabilities on the Fed’s balance sheet should rise to between $5 trillion and $6 trillion later this year amid the financial crisis that roiled global markets, said Brian Baker, chief executive Pimco Asia Ltd.

“Right now, the Fed has spent about $3 trillion. We believe there has to be further stimulus policies put in place,” Baker told Reuters.”

Barclays Officers Land In Hot Seat (WSJ)
So, here’s what’s up: the kids over at Barclays have been doing their best to keep the bank from Government control (kind of not easy in Britain), but it doesn’t look like they’re going to be successful. Meanwhile, not only have they put themselves up for re-election early for the board seats, but they’ve been trying to sell all kinds of shit. Oh, and also, if they try to raise capital they turn control of the bank over to investors from the Middle East:

“Along the way, Messrs. Varley and Agius have made some calls that are now putting them in a tough spot. Last fall, in an effort to avoid government ownership, the bank raised £7 billion from investors from Qatar and Abu Dhabi, who received securities similar to preferred shares paying 14% annual interest.

The deal includes a clause that could give the Middle Eastern investors control of the bank if Barclays issues shares to raise fresh capital before June 30. Many shareholders still are angry that they initially didn’t get the same terms, according to a person familiar with the matter.”

Governments Unwilling To Prosecute Pirates (Bloomberg)
While it’s clear they could prosecute them, they’re not - it’s just too much of a pain in the ass, apparently. So this is really more like a pirate catch and release program, pirate fishing?

$$$ Law student gets Bernard Madoff’s brother’s assets frozen [Newsday]

$$$ “The banks are not going to be nationalized for any reason,” Mr. Bove wrote. “Most important, they do not need to be. They are healthy with positive cash flows.” [NYT]

$$$ AIG Exodus [Breaking Views]

We sold California short months ago, but perhaps we were a little to hasty. We would have bet the rest of our Hyatt Gold Passport Points that their $4 billion bond sale was doomed after nine months of being shut out of the credit markets all together and being downgraded to the lowest credit rating any state in the Union has to offer. That would have totally ruled out our trip to Lake Tahoe (off peak, you know) because Cali managed to suck in over $6.5 billion instead. We think, however, we know why:

Of the $6.54 billion, California sold $3.2 billion to individual investors.

An effective 9% yield may also have pulled shell shocked Cali denizens out the door (along with the blitz of an advertising campaign).

California Ends Bond Sale [The Wall Street Journal]

Well, no one ever claimed that Mirek Topolánek, the (quasi) Prime Minister of the Czech Republic, was soft spoken (particularly aggressive photographers), so we aren’t particularly surprised to hear him describe the stimulus plans of the United States as “the road to hell.” Perhaps he was just cranky (he was been shown the door by the Czech Parliament just yesterday and this whole missile shield thing is enough to annoy the most stoic Eastern European statesman) or he was just prepping the waters for Obama’s up coming visit to Prague. Whatever the case, you can bet Obama and Mirek will be studiously ignoring each other for some time to come, and, really, Mirek has nothing on Maxine Waters anyhow.

Czech Premier Slams Obama Stimulus Plan [The Wall Street Journal]

Touched by his Crackness.

The Obama Portfolio (Since Inception): +14.85%

Earlier: The Obama Portfolio

Just in case you have an urge to relive it, the credit crisis is the subject of a museum exhibit. Like the dropping of the atom bomb on Japan, the potential for exhibit controversy is high. We cant help but wonder how the sensitive issue of Maxine Waters and Goldman Sachs will be presented, for example. Which outfit will Mad Max be wearing in her wax figure? How will she be depicted? In the midst of a conspiratorial discourse with large microphone? Will Ruth Madoff’s grocery habits find treatment? We, of course, are pitching for the Marcus Schrenker faux-suicide scene in campground tent.

The global economic crisis wears on, but the Museum of American Finance is already documenting its history in an exhibit that opened on Wednesday.

“Tracking the Credit Crisis” provides a timeline of the events that led to the current recession and translates the catchphrases of the economic downturn such as “securitization,” “liquidity,” and “derivative” for the average person.

New York museum opens exhibit on credit crisis [Reuters]

“Five public pension funds sued BofA, alleging it made “untrue” statements during the Merrill deal.”—WSJ

Considering he has apparently transformed into a mortgage backed securities bull (in selective cases) it’s interesting to hear that John Paulson doesn’t seem interested in using cheap government leverage and guarantees to participate in the public-private plan to pick up legacy assets, as he told the Times. Why not? We actually have no idea, given Paulson’s soft spoken treatment of the subject, but it is great fun to speculate.

Perhaps the prospect of an ever-changing regulatory morass or retroactive witch-hunts turned off our hero? Or perhaps Paulson would simply prefer to cherry pick his own hit-list of prospective value plays, avoid the gamble of an auction and the spectacle of banks trying to game the system? Lots of buyer’s regret potential here. Leveraged buyer’s regret, actually. It is also not particularly hard to imagine that anything the banks want to sell might be less attractive than a few carefully picked distressed assets from better motivated sellers.

Is Paulson alone? We would like to find out. Dealbreaker is going to keep a running tally of who decides to opt out and in. So far:

Bridgewater: Considering it.
Citadel (according to sources): Considering it.
Paulson: No.

Let us know as you hear. Share: tips at dealbreaker dot com.

Top Hedge Fund Managers Do Well in a Down Year [The New York Times]

If you don’t end it? Here’s a li’l preview of what you’ll have to look forward to, according to “Anthony Papa,” who in 1985 was “sentenced to 15 years to life under New York’s draconian Rockefeller Drug Laws for a first-time nonviolent drug crime.”

Your identity will be taken away when you are stripped naked and ordered to bend over and spread your butt cheeks. You will be forced to comply. If you don’t, the officer conducting the search will call the “goon squad,” abouta half-dozen killing machines who will come in dressed in battle gear, armed with batons. They won’t care that you are 70. They will strike blows in a way that will not leave bruises because you are a high-profile case.

Once you are sitting in your temporary cell awaiting sentencing, officials will isolate you from the general population. By this time, several contracts on your life have been taken out. Even those who are not contracted will want to take your head off so they can get their name in the paper.

Our spy on a Treasuries desk has some interesting things to say via the mailbag about the bond market in the imminent face of $300 billion in quantitative easing by proxy:

Wall Street Dealers are giving the Treasury the biggest “fuck you” on new Treasury debt. There’s an auction today and a buy program tomorrow. Since Bernanke just announced that the Treasury is buying bonds, Wall Street- the dealers en masse- are basically refusing to show a good bid but then taking out a huge profit out of the Treasury. You want to talk 90% taxes? This is unprecedented.

Hell hath no fury like a bond trader scorned? We aren’t so sure. The UK had similar problems today.

The U.K.’s effort to buy government debt wasn’t enough to prevent today’s failed auction of 40-year gilts, the first time that the government failed to attract enough bids at a sale of nominal debt since 1995. Investors bid for 1.63 billion pounds ($2.4 billion) of 4.25 percent notes, less than the 1.75 billion pounds offered.

“The failed gilt auction doesn’t bode well for Treasuries,” said Michael Franzese, head of government bond trading for Standard Chartered in New York. “It is a supply issue on top of that. Is the buying that’s happening today by the Fed going to offset the selling that’s going on today and tomorrow by the Treasury?”

What say you DB? The largest bond price fixing conspiracy in history? That would be quite entertaining.

Treasuries Fall as Five-Year Note Auction Draws Yield of 1.849% [Bloomberg]

As mentioned earlier, Alpha magazine is set to follow up its annual list of the this year’s top earning hedge fund managers tomorrow with a list of 2008’s Biggest Losers, comprised of a group of managers who together lost $6.2 billion 2008. (The mag uses two factors to calculate earnings, or, in this case, lack thereof: “the managers’ shares of their firm’s performance and management fees, as well as gains on their own capital.”) According to CNBC, it will look something like this:

1. Ken Griffin, down $2 billion (personally)

2. Eddie Lampert, down $1 billion

3. Steve Cohen, down $750 million

Sure, the President claims not to pay any attention to blogs, but we aren’t sure how else you could explain the latest news in light of our recent piece on Paul Volcker. At first glance you would think The Volck a bit too busy with that whole “saving the financial world” project to take on a task as gargantuan as reforming the tax code, but if you look at the meeting record of the Presidential Economic Recovery Advisory Board (won’t take long, there isn’t one) it quickly becomes apparent that there’s plenty of time for side projects.

President Barack Obama is putting former Federal Reserve Chairman Paul Volcker in charge of a tax-code review aimed at closing loopholes, streamlining the law and generating revenue, budget Director Peter Orszag said.

Volcker, 81, who heads the president’s Economic Recovery Advisory Board, is being asked to take a top-to-bottom look at the laws in an effort to rebalance the tax system.

Obama Asks Volcker to Lead Panel on Tax-Code Overhaul [Bloomberg]

No lesser source of scintillating financial analysis than the New York Post is reporting the suddenly ravenous appetite of Citigroup and Bank of America for mortgage backed securities.

Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids.

The Post, surprisingly, declines to provide details so we are left to wonder. Shrewd public relations? Doubtful. Altruistic financial patriotism? We think not, but BofA claims so:

“Our purchases in [mortgage-backed securities] increase liquidity in the mortgage market allowing people to buy a home,” said BofA spokesman Scott Silvestri.

Shameless profiteering? Yes, of course. But we don’t suppose anyone would believe us if we said that Citi and BofA are calling an MBA bottom… would they?

Double Dippers [The New York Post]

Hint:

Close ups on the damage done at Fred Goodwin’s home this morning.

As you’re a aware, a whole slew of groups and individuals have threatened bonus-receiving AIG employees. So far, though, that we know of, none have made good on their intentions, leading us to believe they’re bluffing. This is not the case across the pond, where their British doppelgängers attacked the Edinburgh home of former RBS chief Fred “The Shred” Goodwin, early this morning, smashing several windows and the windshield of his Mercedes-Benz S600. At issue: the matter of FG’s £700,000/year pension despite the minor matter of the bank reporting the largest annual loss in British corporate history last month.

Vandals target Sir Fred Goodwin’s house and car [The Guardian]

Yes, Oppenheimer. YES.

Oppenheimer & Co.’s Canadian parent said it may seek money from the U.S. government’s financial- bailout programs to repay brokerage customers facing losses on frozen auction-rate securities.

Oppenheimer Holdings Inc., based in Toronto, asked shareholders to approve an incorporation switch to Delaware, which would make the firm more likely to qualify for the rescue funds, according to a March 13 proxy statement. Money from the Treasury’s Troubled Asset Relief Program “could assist us” in repurchasing securities from clients trapped when the $330 billion auction-rate market seized up, the company said in the filing.

“It takes your breath away,” Anthony Sanders, a finance professor at Arizona State University, said in an interview. “We’re going to ask taxpayers, the people who got hurt by these securities, to pay for buying them back.”

Oppenheimer May Seek TARP Funds to Repay Auction-Rate Clients [Bloomberg]

Bank of Amerillwide chief Ken Lewis told the LA Times last night that he wants to start giving the government its $45 billion after the completion of the firm’s stress test, which he expects to pass, though no promises, on either front. Lewis said it’s possible BAC will pay it all back “as early as the fourth quarter of this year,” and also defended the Countrywide and Merrill Lynch acquisitions as “strategically sound in the long run.”

Hedge Fund Bridgewater Mulls U.S Toxic Asset Plan (Reuters)
“In a letter to clients, Bridgewater Associates: “From a macro perspective, this is a big transfer of money from the government to the banks (who are getting the higher prices for their assets) and to the buyers (who are probably going to get a heck of a deal because of the non-recourse loan and the easy access to leverage).

“If the government was operating in an economic way, it would not do this deal — it would deal with the banks’ finances separately and sell this insurance (i.e. the implied put arising from the non-recourse loan) for what it’s worth,” Bridgewater said in the letter.

“But, politics being what they are, this route is probably motivating this non-economic behavior. We are eager to see how it is received on the Hill,” it said.”

This would be awesome, if Geithner, Bernanke, Obama et al were subject to Bridgewater’s 360 review, wherein subordinates are supposed to tell their bosses what they’re doing wrong.

Hedge Fund Employee Pay May Drop 25% (Bloomberg)
With 70% of the single manager funds down, the industry will have to look at pay cuts across the board.

“Chief executive officers earned an average of $2 million last year, while chief investment officers made $1.4 million, according to Alpha’s survey. Senior portfolio managers took home $1.1 million and senior traders were paid $790,000.”

And of course there’s this.

U.S. Plan Seeking Expanded Power in Seizing Firms (NYT)
“It is precisely because of the lack of this authority that the A.I.G. situation has gotten worse,” Mr. Obama said, predicting that “there is going to be strong support from the American people and from Congress to provide that authority.”

Boehner says Geithner nonbank plan a power grab (Reuters)
“This is an unprecedented grab of power, and before that occurs, there ought to be a real debate about whether we should give that authority to the Treasury Secretary,” Boehner, an Ohio Republican, told reporters.

Senator Dodd’s Wife Worked As An Outside “Director” For A Bermuda-based Company Affiliated With AIG (NYP)
Presented without comment.

Dear AIG, I Quit (NYT)
Sent Tuesday by Jake DeSantis, an executive vice president of AIG’s financial products unit, to Ed Liddy.

“DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

…will not be taking celebratory Zamboni joy rides on one of their own this year! Institutional Investor’s Alpha magazine came out with its annual list of the highest paid hedge fund managers today. Here’s who made the most in 2008, calculated by “the managers’ shares of their firm’s performance and management fees, as well as gains on their own capital invested in their funds.”

Obviously there’s a big pink elephant in the room right now, so we might as well acknowledge it by comparing this to 2007’s top earners.

I honestly feel like I’ve been slapped in the face with a Twinkie right about now. How did this happen? HOW? I don’t ask this to be mean,* I genuinely need to know. We knew things didn’t end so great in 2008 (and there was a li’l outburst in the fall) but we didn’t know they were this bad. Someone please help us to understand how this came to pass. Last we heard things at CR Intrinsic— which is, or was, significantly comprised of Cohen’s personal capital, kind of a major factor in the rankings— were a bit tense but we never could have anticipated a blow of this magnitude.

In hopefully unrelated news, Alpha will reveal its NBC reality TV-inspired list of Biggest Losers tomorrow, a group of managers who together lost $6.2 billion in personal wealth last year. But delayed gratification is overrated, so, amongst yourselves, please determine now which names will be named.

*Though, to that end, and in the interest of full disclosure, there is a selfish element to all this. See, gang, heretofore, we’ve been able to so guiltlessly rib the big guy because a) we’re doing it from a place of love, and not hate and b) he’s been insulated from whatever we send his way by a 100 foot radius of estrogen pills, leaf cookies and mega, mega wealth. Now that he’s destitute, we might actually feel a little bad and have to momentarily consider laying off him. Or: continue doing what we’re doing, but send him a cheesesteak for lunch, on us. It’ll be one of these two options, for sure.

**PS, condolences to KG, as well, but we think the wife’s fund had not too terrible a year, so things can’t be THAT bad. If that’s not the case, hit us up for some cash later. We know you’re good for it.

Earlier tonight someone told us about a one-off SAC Capital hire (Shakeeb Alam, previously a senior executive and partner at Boston-based Highfields Capital where he led the firm’s consumer and retail industry investment team, as a PM) that we probably wouldn’t have cared about (because we’re dismissive assholes), except for this— supposedly Alam will be working out of SAC’s “new Chicago office.” When did this happen? We haven’t heard or seen anything about the mini-Steves taking off their shoes, unbuckling their belts and making themselves at home in Ken Griffin’s house, and we (KG) need to mentally prepare for the upheaval (and start deciding what flavors to put in the welcome wagon deep dish pizzas).

Update: Apparently the Chi-town office has been “just getting started over the past couple weeks.” Send your congratulatory Deep D’s to the supposed new space (a block and a half from Citadel’s 131 South Dearborn Street spread):

1 South Dearborn Street Suite 2108
Chicago, Illinois 60603

$$$”President Barack Obama plans to meet with about a dozen of the U.S.’s top banking chiefs in an unusual gathering designed to discuss the administration’s plans to shore up the financial sector.

Attendees are expected to include Goldman Sachs, J.P. Morgan Chase and Citigroup. The meeting comes as relations between Washington and Wall Street are frayed following last week’s furor over bonuses paid to American International Group employees.” [WSJ]

$$$ The leading candidate to run the Treasury’s $700 billion bailout program has withdrawn his name from consideration. [WSJ]

$$$ Meredith Whitney: Regional Banks Are the Future [Economics Blog]

$$$ Successful bank rescue still far away [FT]

$$$ Wall Streeters Flocking to Rehab [Cityfile]

$$$ The gentleman requires a bailout [Foggy Monocle]

The No. 2 Democrat in the House on Tuesday said hastily-crafted legislation imposing punitive taxes on executive bonuses has accomplished its mission even if it doesn’t become law.

Majority Leader Steny Hoyer (Md.) was reacting to an announcement from New York Attorney General Andrew Cuomo that 15 of the top 20 employees at American International Group have agreed to return their bonuses.

“I think, apparently, the House bill had its affect,” Hoyer said. “They’re giving it back.”

[…]

Still, Hoyer defended the House bill as a success and the appropriate response.

“If you’ll recall last week, what did I say? They ought to give it back,” Hoyer said. “I don’t think it was symbolic. It was real if it became law. Now, whether or not it becomes law is another question.

“If the money is returned,” he continued, “the legislation may not be necessary.”

Hoyer says mission accomplished on AIG bonus bill [The Hill]

Holding on to those double digits.

The Obama Portfolio (Since Inception): +14.14%

Earlier: The Obama Portfolio

In case you missed Mad Max’s latest track.

Liberals do not consider cheating on taxes to be as morally problematic as conservatives do. This presents an obvious moral quandry [sic] of its own, as, putatively less surprisingly, liberals are more likely than conservatives are to favor greater amounts of taxation and wealth redistribution.

Liberals and Tax Cheating [The Audacious Epigone]

Krugman doesn’t think much of the latest Geithner plan. Surprise, surprise.

Notice that the government equity stake doesn’t matter — the calculation is the same whether private investors put up all or only part of the equity. It’s the loan that provides the subsidy.

And in this example it’s a large subsidy — 30 percent.

We are sort of puzzled, however, that he hasn’t fixated more on the effect the plan, and the inflated marks it could create, will have on related assets that are stuck in mark-to-market mode, and that this may be the Treasury’s real goal. After all, imagine the multiplier the Treasury is getting this way. Consider:

Agency and non-agency mortgage backed securities outstanding were about $7.5 trillion in late 2008. If a mere 10% of these are currently afflicted with the evils of mark-to-market accounting because they have become Level III assets (we can’t help but think of Schedule III narcotics whenever we see that), the Treasury is in a position here to buoy up marks on $750 billion in assets with the use of $50 billion in capital. (Assuming half the $100 billion PPIP program is used on the Securities rather than the Legacy Loan side of the problem and that the figure stays at $100 billion for the entire program). Plug in your own figure for the amount of subsidy you think the Fed’s leverage is putting on the marks and do your own calculation as to the effects.

We think the plan is just re-inflation (and we bet the Administration really wishes Krugman would shut up about this subsidy stuff) but at least it seems it might be effective re-inflation.

Geithner plan arithmetic [The New York Times]

In case you missed it the first time, Glenn Schorr is leaving UBS.

Earlier: Glenn Schorr Leaving UBS

Their work has been cut down for them pretty significantly but no matter. The gov has no idea what it’s doing and needs their help!

At least two high-profile plaintiffs attorneys are considering filing lawsuits over the recent controversies surrounding $165 million in retention bonuses that American International Group Inc. paid to its executives.

In a March 19 letter to Treasury Secretary Timothy F. Geithner, Darren Robbins, name partner at San Diego’s Coughlin Stoia Geller Rudman & Robbins, said several of the firm’s pension fund clients have directed him to “advise the Treasury Department of our mandate to take appropriate steps on behalf of AIG against the members of AIG’s board of directors.”

So far, AIG has received $170 billion in bailout funds from the U.S. government, which owns 80 percent of the insurance firm. On Friday, legislators in Congress voted to impose a 90 percent tax on the bonuses. Similar legislation has been introduced in the Senate.

In his letter, Robbins noted that President Obama, expressing his “outrage” over the developments at AIG, directed Geithner to “pursue every legal avenue” to block the bonuses. “Although limitations may exist with respect to available legislative and regulatory remedies, the Treasury Department has legal recourse as AIG’s largest stakeholder,” the letter states. “These rights should be exercised.”

Robbins told The National Law Journal that he wrote the letter to offer his services to file a lawsuit on behalf of the U.S. government.

“They seem to be somewhat flummoxed by the inability of the various constituencies in the government to obtain redress for the misappropriation of what is a significant amount of money,” he said.

Having spent most of our time Lloyd Watching, we haven’t observed Goldman President Gary Cohn in the brush too much. Gotta say though, we are digging his style. Watch here how he finds the loophole during a talk with the WSJ re: which bank will be the *FIRST* to repay its TARP money, (verbally) throws the interviewer on his back and says “No, sir, we will indeed quibble over semantics.” (We also enjoy the uncanny resemblance to Champ Kind, who will play him in the movie.)

WSJ: One question on everyone’s mind’s and us and other have raised it several times in the last few days is…does Goldman become the first to give back TARP money?

Cohn: I don’t know.

WSJ [confused]: Why not?

Cohn: I can’t speak for everyone else who has it. [Since the question was, “will GS be the first,” and, conceivably, for all we know, Ken Lewis could be paying BAC’s money back right this second, making GS the second to repay.]

WSJ: But you’re the president of Goldman Sachs [can’t you speak for yourself?]

Cohn: There may be someone giving it back right now.

WSJ: [Figuring out where he’s going with this] Could be.

Cohn: Could be.

[stare each other down]

Cohn: I would have no idea. If you got all the TARP recipients up here maybe we could come up with an answer to that.

We thought harebrained schemes like this only came from the Swiss and Bank of Amerillwide but apparently Morgan Stanley has jumped on the clawback bandwagon:

Morgan Stanley has added a component to its compensation scheme for this financial year in which senior executives will have to forfeit stock awards if they fail to meet targets over a three-year period, a measure that further aligns rewards with long-term goals.

Morgan Stanley adds three-year stipulation to compensation [Financial News]

Holy shit, right? Didn’t see that coming. Anyway, apparently those AIG employees that we found out last night turned over their bonuses? There’s talk it might’ve been through a series of, OMG, scare tactics by the Attorney General, who may have threatened to reveal names if he didn’t get the money!

The “Damning” Evidence [CNBC, PDF]

Or, don’t, whichever. The Financial Times reports that Snehal Amin, one of five founding partners at The Children’s Investment Fund, is not sticking it out for the kids, but rather peacing, and leaving the firm with one original partner, Chris Hohn. TCI was down forty three percent in 2008, and down four percent year to date through February. According to people who keep up with things of this nature, “everyone is running for the doors,” as in personnel, not investors, though maybe them too! (JK…just keeping you honest, Hohn.)

TCI Co-Founder Quits [FINalternatives]

No word where the analyst is headed, and though it’s a long shot, our fingers are obviously crossed it’s to Meredith Whitney Advisors.

Update: Confirmed by UBS.

As you know, Bernie Madoff and the wife own a bunch of homes around the world, including the Upper East Side penthouse, the Palm Beach manse, and a crash pad in Jersey City where Ponzi-Boy would go to blow off steam when Ruth was getting really harpy. Apparently there’s also a nice little place on the French Riviera, called “Chateau des Pins Villa 2,” in the resort town of Cap d’Antibes where the dynamic duo would spend at least a few days a year when the mood struck to hit up some nude beaches. Anyway, U.S. prosecutors were planning on taking the place over in an effort to get some coin for Madoff’s victims but apparently their French doppelgängers have another plan. They want the place and the million it could go for, too, and according to David Sheehan, a lawyer involved in liquidating Madoff’s assets, “Things are moving very quickly in this arena…We’re told the French are going to grab the chateau.” Are we going to let them? Maybe! That or neither will get the place, and the judge sentencing Ponz-B on June 16 will turn it into a B&B and force Madoff to be the innkeeper.

Drawbridge Global Macro Fund LP (Liquid Pool & Illiquid Pool):

AQR Global Stock Selection Offshore Ltd.

We started watching the latest episode of “The Safecracker” and intended to begin live blogging it, but we were transfixed immediately by the undulating waves on his Crackness’ forehead. Branded there like a quantum interference pattern, emanating from the twin slits of two Pink Floydesque eyebrows, as the single photons of bailout are at once reducing the cost of home ownership, and reflating asset prices in his brain. Excuse us for a few minutes while we gaze upon the physical paradox of the forehead wrinkles in time.

Maxine Waters has jarred us out of our contemplation of the great cosmic order with her particularly insane brand of chaos theory.

Waters: Mr. Geithner, your CEO is from Goldman Sachs?

The Safecracker: My CEO?

We wonder, who is the CEO of the Treasury? Who is the boss of you, Your Crackness?

Waters: The talk is, that this small group of decision makers at the center of it is Goldman Sachs because people are thinking or believing that Goldman Sachs, because of the connections, is having a lot to do with the decisions are being made. (phew) We believe that Goldman Sachs will again be one of those that will be the beneficiary.

The Safecracker: I think it is deeply unfair to suggest that Goldman Sachs is a den of poisonous, bloodsucking vipers.

Carolyn Maloney: I’m doing a study on failure. You know, I have a PhD in fail. Yes it was from the University of Phoenix, but I think we all know they are the foremost authority on fail. Can you give me the government analysis that determined that Lehman should fail? The death warrant. You know? The fail warrant?

Beard: What? Uh, sure. I’ll look.

Bachmann: Mr. Chair, can I have an answer on my inane and misguided question?

His Frankness: No, you can go pound salt.

Jenkins: How much more money is AIG going to need?

Dudley: We have no fucking clue.

Castle: So Dodd is fucked on this bonus language. How about you? Are your fingerprints on that?

The Safecracker: I wore a tie today.

Ackerman: Those AIG traitors should have returned twice their bonuses. Greed is the problem. We need to legislate away greed. Greed plus innovation is very dangerous. Let’s kill them both. My white carnation is the new yellow bracelet. It stands against greed. And intelligence. I couldn’t figure out how to put it into my button hole so I just stapled it onto my suit.

Royce: I lost my jacket in the morning Congressional poker game.

Sherman: I cannot believe we are letting this populist uproar to fade. How are we going to get this back roaring? Geithner, you. How about you publish the current and future salary info on all the TARP recipients? Are you going to give us the chart? Or are you going to hide the ball?

The Safecracker: I am not going to hide the ball

Sherman: So are you going to give us the chart?

The Safecracker: I’ll think about it.

Sherman: So you’re not?

The Safecracker: I said I would think about it.

Sherman: What the hell is Cash-Carry (your quarterback) still doing running the compensation standards? When are we going to get regs to prevent anyone anywhere from making a million dollars ever?

Lucas: So, investors are going to make millions on this bailout?

The Safecracker: The taxpayer too.

Lucas (puzzled look): Hmmmph.

Meeks: Should we regulate credit default swaps?

The Safecracker: Let me uncork my standard, bottled speech on central clearinghouses.

Meeks: Are Wall Street jobs going to head to London now that we’ve threatened these employees with dismemberment and death?

The Safecracker: Uh… maybe.

Paul: We didn’t have capitalism. We had the Federal Reserve messing up the entire system. (Lather, rinse, repeat. x4). Didn’t we have too much government here? Who’s to blame. Market, or crony capitalism?

Beard: I don’t blame capitalism. Panics are a reality.

Moore: The Inspector General of TARP believes that taxpayer exposure is near $3 trillion. What the hell?

The Safecracker: That figure is the total loan figure. You’d have to assume a total loss for that to be realized. And that is never… going… to… ever… happen… I’m… totally… serious.

Lynch: Let’s sue AIG for these bonuses. Isn’t this a fraudulent conveyance?

The Safecracker: We are looking very carefully at all legal avenues to go back and see if we can get these back. I can’t tell you today that we’ve found a way to do it. But we are on it.

Beard: We’ll check. I hope we can.

Dudley: We’ll try.

Apparently the plan take all (bonus receiving) employees on a reverse tour of the foreclosed homes once owned by participants in last week’s event in Connecticut, hovering over the hovels for just enough time to open a window and yell “one hundy sixty five million” has hit a snag.

In a sign that citizen outrage is beginning to have an impact, embattled insurance company AIG has sold two of its luxury corporate jets in the last two months and cancelled delivery on two aircraft, company officials tell ABC News. AIG has received around $180 billion in taxpayer bailout funds.

“As part of a comprehensive expense reduction plan, AIG has dramatically reduced airplane usage and sold several aircraft,” said AIG spokesperson Joe Norton.

AIG sold two jets in its corporate air fleet in the last two months, a Dassault Falcon 900EX and a Falcon 2000EX EASy. It has also cancelled a 2010 order for a Dassault Falcon, and was able to transfer the sale of another Falcon to a third party, according to Norton. Norton says the use of corporate jets at AIG is down about 70% from last year.

AIG Getting The Message On Corporate Jets? [ABC News]

We really aren’t that sure how to greet this news, considering that we aren’t really sure that another $3 trillion in lending transactions is exactly what we need right now. But, then again, it does feel like 2005 for the first time all over again, and we’ve got that going for us. So that’s nice. And, we suppose, to the extent this is refinancing, that’s a good thing. For half of the market.

Mortgage Bankers Association boosted its forecast for 2009 home-loan originations by $800 billion to $2.78 trillion, which would make it the fourth- highest year on record.

The increase is due to the drop in fixed mortgage rates following last week’s Federal Reserve announcement that it will triple its planned purchases of mortgage-backed securities, the Washington-based trade group said.

U.S. Mortgage Lending May Reach $2.78 Trillion, Bankers Say [Bloomberg]

AIG’s Bonus Unit Now in IRS’s Sights (WSJ)
“”Some of the same banks that got government-funded payouts to settle contracts with American International Group Inc. also turned to the insurer for help cutting their income taxes in the U.S. and Europe, according to court records and people familiar with the business.

The Internal Revenue Service is challenging some of the tax deals structured by AIG Financial Products Corp., the same unit of the New York company that has caused political ire over $165 million in employee bonuses.

The company paid $61 million last year in disputed taxes stemming from the deals but sued the U.S. government last month in federal court in New York, seeking a refund, according to filings in the case.”

Geithner Finds Government Strength In Oddest of Places (NYT)
To the quote:

“He said it was a “terrible, tragic thing” that the government did not have better tools, such as the power to take over major firms, when the credit crisis accelerated last fall. “Our system basically failed its most fundamental test,” Mr. Geithner told the conference, which was sponsored by The Wall Street Journal. “It was too fragile.”“

I offer that the government’s inability to take over major firms, regardless of the crisis at hand, is precisely what affords our system its strength.

Stiglitz Critical Of Geithner’s PPIP (Reuters)
This is bound to be the academic topic of the year, so it makes sense that we’d have a Nobel-prize winning economist leading the pack. To point: Stiglitz is concerned for the American taxpayer, calling the plan “robbery” (graceful, Stigz) - apparently not a fan of the government propping up 90% of the cash for the recovery efforts.

“The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.”

Deutsche and Credit Suisse Of To Strong Start (Bloomberg)
In what’s quickly becoming “See, we’re still okay” press releases, I’m sure you’re all overcome with joy to learn DB and CS are still breathing, and really doing pretty well this quarter.

Welcome Back To The 80’s (Bloomberg)
“Wall Street bond trading is heading back to the 1980s, when private partnerships and independent firms dominated the market.”

“Smaller firms are emerging from the wreckage of the world’s largest financial companies, which are conserving capital following more than $1.2 trillion of writedowns and credit losses since the start of 2007. They’re luring traders with a shot at $500,000 commissions for two days’ work as banks that accepted federal bailouts retrench and slash bonuses.

If Goldman Returns Aid, Will Others? (NYT)
Sorkin: “So here’s something else to ponder: Goldman Sachs is planning to give back its TARP money soon. Very soon, actually — ideally within the next month, according to people involved in the process. That’s a much quicker timetable than the end-of-year goal previously set out by Lloyd C. Blankfein, Goldman Sachs’s chief executive. As taxpayers, we should be thrilled that Goldman is going to quickly pay back the $10 billion it was given last October, right?”

Update, 10AM: Bernstein, Rosenberg Plan to Leave Bank of America (Bloomberg)

Richard Bernstein, chief investment strategist, and David Rosenberg, the chief North American economist, plan to leave Bank of America Corp. within two months, a company spokeswoman said.

Bernstein, 50, will start his own money management company after leaving on April 15, and Rosenberg, a native of Canada who plans to leave on May 11, will join Gluskin Sheff & Associates in Toronto, said a person familiar with the decisions. Bank of America spokeswoman Susan McCabe confirmed the departures.

New York Attorney General Andrew Cuomo said late Monday that 15 of the top 20 recipients of $165 million in retention bonuses from American International Group Inc.’s Financial Products unit have agreed to give back their bonuses — amounting to an excess of $50 million in cash.

[…]

“I applaud all the AIG employees that are returning the bonuses,” said Mr. Cuomo in a conference call. “They are doing the right thing.”

He added that he sees no public interest in revealing the names of people who return their bonuses, and he acknowledged that returning the money is a difficult decision for many people in the unit who were not involved in creating the problematic transactions that helped topple AIG.

AIG Executives to Return $50 Million of Bonuses [WSJ]

I thought you meant something else by “all assets.”

A lawyer for the court-appointed trustee liquidating Bernard Madoff’s firm confirmed Monday they’ve located another $75 million in Madoff assets - a figure that would put the total above $1 billion.

A lawyer for the court-appointed trustee also said Monday that French authorities are moving to seize Mr. Madoff’s residence in France, to satisfy claims by Madoff’s victims in France.

Trustee Finds More Madoff Assets [The Wall Street Journal]

$$$ Donnie Deutsch Wants to Accost Bonus-Takers In Front of Their Kids [Daily Intel]

$$$ CODEPINK Holds Overnight Vigil for a People’s Bailout on Eve of Second AIG Hearing [CD]

$$$ Cuomo’s Shifting Thinking on A.I.G. Bonuses [Dealbook]

’s branches. As was rumored round these parts this morning. Full press release from Stifel Financial:

Stifel Financial Corp. (NYSE: SF) announced today that its principal operating subsidiary, Stifel, Nicolaus & Company, Incorporated, has entered into an exclusive agreement with UBS Financial Services Inc. (“UBS”) to acquire up to 55 branches from the UBS Wealth Management Americas branch network.

The 55 offices are located in 24 states throughout the country, and employ an aggregate of approximately 320 Financial Advisors, who have approximately $15 billion in assets under management, including $215 million in Reg U and Reg T loans and $1.7 billion in money market and FDIC insured balances. In 2008, these branches generated estimated total revenue of approximately $116 million, including approximately $100 million in compensable Financial Advisor revenue. The transaction is structured as an asset purchase for cash at a premium over certain balance sheet items, subject to adjustment. The payments to UBS include:

WOW! See what happens when you hold calls for bloggers?

The Obama Portfolio (Since Inception): +16.21%

Earlier: The Obama Portfolio

3:25-3:38: In its second conference call of the day, the Treasury has mastered the concept of hold music, and is killing us with the soft jazz. We prefer the coughing, wheezing, nose blower.

3:44: Just hangin’

3:45: Tina Chin, Director of White House office of public liason in the hizzous, joined by Mary Goodman, Sam Hanson, and Jeremy Stein. No T. Geith :(

Got a q? Shoot a line to: public@who.eop.gov.

Mary takes the mic.

3:47: We’re faced by “4 challenges,” which is a 100% increase in challenges since this morning.

Apparently “TALF” is “one of our catchy little phrases here at Treasury.”

The challenges are: fall in housing prices, credit flow, bank capital strength or lack thereof, legacy assets.

3:52: Jeremy takes the mic.

So, with regard to these legacy assets, Jer asks the audience, “why do we care about these things?”

This is a very complicated case, Maude. You know, a lotta ins, a lotta outs, a lotta what-have-yous. And, uh, lotta strands to keep in my head, man. Lotta strands in old Duder’s head.

Re: Assigning asset prices, Jeremy actually says this: “We think we are pretty clever here at the Treasury department, but we aren’t that clever.”

“Goldman Sachs is considering selling part of its 4.9% stake in ICBC, a move that could raise more than $1 billion.”— WSJ

Please join Senior Treasury officials Mary Goodman, Sam Hanson, and Jeremy Stein for a call at 3:30pm EST today to discuss the latest piece of the financial stability plan. Call in details: Title: White House/Treasury Call Participant dial in: (800) 230-1085

Seriously. Connecticut is really pissed off and they want their piece of the pie. Yesterday.

The state of Connecticut is analyzing the details of bonuses paid by American International Group to see whether they violated state law and what possible remedies might be pursued, the Commissioner of Consumer Protection said on Monday.

But that’s nothing. Consider the point of this $165 v. $218 million bonus discrepancy thing. Connecticut wants to get that. Now.

This discrepancy now will be probed, Farrell said.

Well, Ed, prepare to be probed.

Connecticut eyes AIG bonuses, possible remedies [Reuters]

I see his mouth moving, and hear stuff coming out of it, and yet, I got nothing. (“We’re going to work with Congress” doesn’t count. For all we know that could mean Frank putting TG in a sleeper hold.)

Maybe!

NEW YORK (Dow Jones)—The U.S. Senate’s proposed legislation that attacks Wall Street compensation might not mean the end of all bonuses for brokers.

The bill, which is on the agenda this week, would impose a 70% surtax on so-called “excessive bonuses” - half on employees and half on banks that received bailout funds from the federal government. The tax, while less damaging than a similar measure passed by the House of Representatives on Thursday, would extend to more employees and firms than that bill.

While both bills appear to encompass broker retention payments, language in the Senate bill could provide a loophole for signing bonuses. According to the legislation, the tax applies to bonus payments “attributable to services performed by such individual during any preceding calendar year.”

Kenneth Raskin, head of White & Case LLP’s global executive compensation, benefits and employment law practice group, said the Senate bill, in its current form, seems to exclusively address rewards for past performance.

“If you sign a contract for me and I just give you money for signing the contract, you haven’t performed any services yet … it’s a technical interpretation, but it’s also the right one under the language,” Raskin said.

In what must be some sort of a prank on Jamie Dimon’s part to get Barney Frank and Friends to choke on a mixture of excess saliva and outrage, JPMorgan is apparently “going ahead with a $138 million plan to buy two new luxury corporate jets and build ‘the premiere corporate aircraft hangar on the eastern seaboard’ to house them,” according to ABC News.

The financial giant’s upgrade includes nearly $120 million for two Gulfstream 650 planes and $18 million for a lavish renovation of a hangar at the Westchester Airport outside New York City.

According to JPMorgan Chase architects, the new hangar will be built with reclaimed wood, quarry tile and even a “vegetated roof garden.”

The Gulfstream 650’s are described by the manufacturer as the “fastest,” “widest” and “most comfortable” private jet ever with superior cabin amenities, an optional stateroom, and 12 interior designs to choose from.

Though JPM spokesman Joseph Evangelisti said no TARP money will be used, “corporate watchdog” Nell Minow still finds the whole thing “completely tone deaf” and “remarkably boneheaded.” Okay, but it it worse than Pandit’s Zen garden? We submit it is not.

Update: JPMorgan to Repay TARP Money *Before* Buying Jets

When we last checked in with our heroine, she was suffering through what is believed to have been her first attempt at food shopping in the last several decades, though maybe ever. It was a trying experience, one which left her very cranky, and sans Jarlsberg. Luckily, a weekend in Palm Beach was planned (it’s her primary residence, as you know), though for some reason she wasn’t staying at the manse, which was likely being redecorated or something. But people, please. Do not assume it was a restful vacation that left the old girl rejuvenated and with the newfound strength to put herself out there and give Benjamin Lipshitz, who she should’ve married in the first place, a call. Because it was anything but. Sure, there was shopping for baubles, but not those deserving of a lady named Ruth Madoff.

What she’s doing by day, I know. Shopping. In and around the Via Mizner alleys, where they sell knockoff cheapo costume bangles. We are not talking Cartier here. We are talking plastic. Hunting with girlfriends who’d call out, “Ruthie, look at this.” Ruthie then came and looked at this.

Ruthi Madoff Is Using Her Plastic [NYP]

Josh Gerstein over at Politico is not a very happy camper. We’re not huge Politico fans or anything, but Gerstein brings up some very interesting points about how badly Paul Volcker has been used by the present administration. To wit:

Six weeks after President Barack Obama appointed a blue-ribbon panel to help him dig America out of its economic crisis, the board has yet to hold an official public meeting.

The White House initially said that the 16-member Presidential Economic Recovery Advisory Board, headed by former Federal Reserve Chairman Paul Volcker, would meet “every few weeks.” Last month, a spokesperson told POLITICO the group would meet monthly. More recently, the White House said the high-powered board, set up to address what Obama has called the worst economic emergency since the Great Depression, would gather only about four times a year, with the next session due in “late spring.”

Gerstein goes on to wonder if some private meetings by segments of the Advisory Board aren’t gaming the Federal Advisory Committee Act, which requires public disclosure when such bodies meet.

It does seem a bit like Volcker was paraded about to inspire confidence, and then mushroomed once his appearance hit flat panel screens around the country enough times to have the desired effect.

Econ board has yet to meet publicly [Politico]

Not everyone is feeling the pain. Consider the folks who now bill out at GBP 1,000 per hour, for instance:

U.K. regulatory lawyers advising clients on the financial crisis and scandals like those involving Bernard Madoff bill as much as 1,000 pounds ($1,440) an hour — 50 percent more than mergers-and-acquisition lawyers did during a takeover boom two years ago.

“It’s our time in the sun,” said Darren Fox, a regulatory lawyer who advises hedge funds at London-based Simmons & Simmons. “If you ask which departments are very busy and where clients’ worries are, it tends to be in the regulatory area.”

Surprise!

Madoff, Recession Drive Top U.K. Lawyer Fees as High as $1,440 [Bloomberg]

From the mailbag: “UBS Wealth Management in the US is starting to sell off branches - should be announced ‘shortly’ in Chicago.”

As is his wont, Geoffrey Raymond, the greatest artist of our time has finally weighed in on the toxic assets plan, with a portrait entitled St. Timothy. It looks absolutely nothing like T. Geith, but that’s not the point. Raymond of our time will be in the alley behind Goldman Sachs tomorrow, taking public annotations, but if you can’t make it, weigh in below and he’ll add your two cents, be it “Great job!” or a sample of DNA, to the canvas. Bidding starts at $30,000, though we have it on good authority you’re going to have some stiff competition.

And the ECB don’t need no stinking stimulus, and won’t be pumping cash shamelessly into the European economy, thank you very much. Of course, this might just be a reaction to the fact that, historically, Europeans have quite a bit more experience with, and therefore fear of, inflation than Americans. Either way, Jean-Claude’s slight is just the latest sign of what amounts to a total lack of respect for the likes of Tim “The Safecracker” Geithner in Europe. The G20 is just as anxious to be rid of Geithner and, by extension, his hand on their purse strings, as anyone else. As usual, Germany is expected by the world to haul the freight for the continent so its somewhat surprising that Trichet (no friend of Wiemar) has been supportive of Europe’s (read: Germany’s) spending sloth (aside from buying its citizens a stack of new Volkswagens, that is).

It is hard to blame Trichet. The United States has to abate this crisis anyhow, so why not ride on the coat-tails without blowing up your own debt, and emerge with the kind of fiscal strength that the United States will lack after tacking $2 trillion onto the liabilities side of the balance sheet. Hell, played right, the Euro, and not the Dollar, might emerge as the world’s reference currency. (We giggle here, but only just).

ECB Chief Says Boost In Stimulus Not Needed [The Wall Street Journal]

Of course we all know how to make that happen: Simply regulate short selling and the hedge funds who poison us with it.

“We believe that short selling should operate in a well-structured regulatory framework in the interests of maintaining a fair, orderly and efficient market,” said Martin Wheatley, chairman of IOSCO’s task force on short selling and also chief executive of Hong Kong’s Securities and Futures Commission.

Several European Union countries introduced curbs last year unilaterally, drawing industry criticism over a lack of coordination in a single EU share trading market. The slide in many financial shares continued in spite of the curbs.

We are absolutely thrilled to see some action on this front, let us just tell you.

Regulators seek global approach to short selling [Reuters]

Just as taxpayers financed the lifestyle of Sammy “The Bull” Gravano when he helped put away crime boss John Gotti, we now need to finance the gangsters on Wall Street. Why? Because they’re the only guys who know where the bodies are buried.

No one in government likes to admit to it, but bad guys do business on the taxpayers’ dime all the time. One source of mine is a federal informant who’s helped put away his fair share of murderers and criminals. And guess what? He lives pretty well in some undisclosed location (I don’t know where, but I get the impression the weather is good wherever he is because he plays so much golf), he’s safe and protected along with his family, he has a business, and he does all of this courtesy of you and me.

I have to admit, I’ve grown pretty fond of this guy: He’s likeable, has a good sense of humor, and seems pretty smart. But the fact is most people would consider him a scumbag, someone you wouldn’t trust to take out your trash because he’s the type of guy who would search through it, find a piece of personal information, and commit identity theft. Oh yeah, I left one thing out: I’m pretty sure he’s killed people.

Yet as bad as he is, he’s put away many more killers, helped take down a criminal enterprise, and saved society a lot of hardship and money. In the end, I would argue, cutting a deal with this devil is worth it.

9:50-10:04: Apparently this is the Treasury’s first time holding a conference call, which would explain why, instead of hold music, we’ve been listening to a guy cough, pant, and wheeze into the phone for the last 15.

10:05: Counselor to the Treas. Sec. Gene Sperling (sp?) and Matthew K. Baker in the hizzous.

“Today is simply announcing an other part of our liquidity piece.”

Geithner always tells us, “you have to choose a viable alternative.”

“We can’t be passive.”

10:12: We’re doing 3 things:

1. We’re maximizing the impact of each taxpayer dollar

2. Rather than take the full risk ourselves, we’re designing a proposal that shares risk with the private sector. I want to be very clear— we’re not shielding the private sector, we’re sharing with the private sector. The private sector is putting their capital at full risk, with nothing to protect them. (So who wants in?!).

3. Private sector price discovery.

Secy. Geithner likes to say…”If you had to sell your house tomorrow, and no one could get a mortgage, your house would go for a very very low price.”

10:14: Matt K. Baker either just unzipped his briefcase, or pants.

“It’s going to be a long road.”

“The problem is across the system.”

We had to deal with one of two problems— the bad assets at the banks or the credit freeze.

10:17: We’re expanding TALF.

We put out an application today for competent, longstanding asset managers. Nobody, like, too smart, but guys who know not to stick their dicks in pencil sharpeners, for sure.

Questions:

Private equity manager: What are the qualifications to apply?

Baker: We said today on our website. How long have you been managing assets in this asset class? What’s your track record like? Will you get women involved? Etc, etc etc.

As you’re aware, Meredith Whitney struck out on her own last month to found an eponymously named firm based on the same principles of ass kicking and testicle clamping that made her famous. But what else can we expect from the new shop? In a New York profile today, the Dollar Dominatrix offers some hints.

An air of Paris.

Meredith Whitney, dressed in a tightly fitted plum velvet jacket and towering red patent-leather heels, is giving me a tour of her new offices. “This will be where our research juniors are, this room is gonna be sales,” the former Oppenheimer & Co. analyst says, gesturing grandly across the 5,000 square feet of raw space above Lexington Avenue. She could almost be describing a full-fledged investment bank, which isn’t far from her aspirations.

“I joke that this has to be the Ken Chenault conference room, because he comes in and does an event for me every year,” Whitney continues in her breathy voice, referring to the chief executive of American Express. “I just want to make it nice! I’m also going to use this space to have writers, managements, thought leaders come in and entertain, like a salon series.”

Answering to no one, being in charge, saying who, saying when, saying yadda yadda yadda.

At the same time, she is trying to capitalize on her moment, and she’s so confident that she’s financing the new venture herself. “I had people be like, ‘Oh, let me give you seed capital, yadda yadda,’ ” Whitney says. “I’m not working for anyone anymore. That’s full-stop done. I’m never going back.”

The hotness.

“The funny thing is, in your twenties you try and look serious, and after your twenties, you just try and look hot,” she jokes. “I’m not an old white dude, so I stick out.”

Cookies!

“Ooh! who are those from?” Whitney squeals, catching sight of a congratulatory box of cookies by her assistant’s desk. “That is so sweet!” She is working out of a bare room she refers to as the “fallout shelter” until the renovations are complete.

Sort of, if for the time being we extend the definition of “blogger” to include those that read blogs.

From: redacted at do.treas.gov

Date: Mon, Mar 23, 2009 at 8:19 AM

Subject: TODAY at 10am: Conference Call with Senior Treasury Officials

As a leading blogger the Treasury Department would like to invite you to join Senior Treasury Officials today, Monday March 23, at 10:00a.m. Eastern Time for an update and discussion of the Administration’s Financial Stability Plan to stabilize our financial system and ensure that it is able to provide the credit consumers and businesses need to support economic recovery and a return to growth.

Get in on this while you still can. [Public-Private Investment Program]