Geithner Looks To Announce New Plan Today (Bloomberg)
The new hybrid public/private plan is set to be announced today – the target is somewhere between $500B and $1T of assets. At this point I think it would be completely unreasonable for the government to ask any of the shops to trust them; if the plan is to work I think the best they could offer would be incentives to purchase (instead of direct/backed capital).
That said, there’s always an idiot in the crowd. I’m worried about the long term affects of bad managers stepping up to the plate on this one, though – if their interaction with the government goes bad (and or they draw public ire) this could lead to further regulation of the hedge fund industry “in the name of the public good.”
My Plan for Bad Bank Assets, By Timothy Geithner (WSJ)
“We cannot solve this crisis without making it possible for investors to take risks. While this crisis was caused by banks taking too much risk, the danger now is that they will take too little. In working with Congress to put in place strong conditions to prevent misuse of taxpayer assistance, we need to be very careful not to discourage those investments the economy needs to recover from recession. The rule of law gives responsible entrepreneurs and investors the confidence to invest and create jobs in our nation. Our nation’s commitment to pursue economic policies that promote confidence and stability dates back to the very first secretary of the Treasury, Alexander Hamilton, who first made it clear that when our government gives its word we mean it.”
US Attorney mistakes 419 letter for a submission from a Madoff victim (Boing Boing)
Yes.
AIG Faces Long Term Credibility Issues (Bloomberg)
You can’t so thoroughly stomp the shit out of a company and expect it to spin off and sell its subsidiaries (or a product of any sort) – the actions of the past couple of weeks have all but guaranteed AIG will never be able to pay back the enormous sum of money it owes.
“Mouat said he is seeking to convince commercial clients that the unit providing property and liability coverage that he oversees in Southeast Asia is separate from the problems at AIG. The firm’s business in the region is “still exceptionally profitable” after revenue of $1.3 billion in 2008, he said.”
Also, they’re taking the AIG name off the building:
Hedge Fund Investors Hire Private Eyes (Bloomberg)
“Firms like Shain’s say they are seeing an increase in requests for background checks on fund managers in the wake of high-profile fraud cases against Bernard Madoff in New York, Florida’s Arthur Nadel and R. Allen Stanford and his Antigua- based bank. In all, the men are accused of cheating clients out of as much as $73 billion.
“Investors are being more careful in checking out where they put their money,” said Pete Turecek, a senior managing director overseeing hedge funds at Kroll Inc., a risk-consulting company in New York “As the economy continues to weaken, some people including money managers may be drawn to taking shortcuts.”"
Unemployed? Start a Fund (Reuters)
“The number of Asian hedge funds could increase by 10 percent this year as more unemployed bankers and traders launch new funds and the cost of doing business slumps, an industry expert said on Monday.
“It’s much better to be a small hedge fund manager than an unemployed investment banker,” Peter Douglas, founder of hedge fund consultancy GFIA told the Reuters Private Equity and Hedge Funds Summit in Singapore.”
Abu Dhabi Firm Buys 9.1% Of Daimler (WSJ)
“Daimler AG, the owner of Mercedes-Benz, will cede a 9.1% stake to an Abu Dhabi investment firm in a move that shores up its balance sheet and tamps down fear that activist shareholders could push for a strategic shift.
The deal, worth $2.65 billion to Daimler, will set Aabar Investments PJSC as the largest single stakeholder in the Stuttgart-based auto maker, raising the amount of Middle Eastern ownership of the company significantly. When the deal was announced Sunday, Kuwait was the company’s largest shareholder, with a stake of about 7.6%.”
Bond Offerings This Week (NYT)
“State of California, $4 billion of various purpose general obligation bonds. Merrill Lynch.”
CNBC Still Trusts Cramer, All Is Well (NYT)
At some point you kind of have to feel sorry for Cramer – he didn’t start this.
“Jim Cramer’s personal brand — not to mention that of CNBC’s, his employer — has taken a beating in the last month. But CNBC still trusts him.”
Timmmmaaay!
Geithner Looks To Announce New Plan Today …..
I would not trust him or Obama – if you invest in businesses with Govt. monies or programs it will give the Feds an opportunity to get their hands in your pocket. Avoid any schemes where the govt. is looking to replace public monies with private funds….the aggravation and risk are not worth it. Do you really think Dodd and Barney Frank give a f#ck about your risk capital. Would you really trust the jask a$$es, those that created the mortgage mess, who are throwing money around like drunken sailors, then taxing you for taking the money, calling you a criminal, then want your help? These guys will say anything, think soup du jour.
“Would you really trust the jask a$$es, those that created the mortgage mess”
1. obama created the mortgage mess? buy a clue.
2. what’s a jask ass?
TIMMAY says that those involved would not be subject to the exec compensation limits. I frankly would be concerned that Congress would come clawing back any profits and bonuses. Although a 2 and 20 on $1tril would not be too bad.
“At this point I think it would be completely unreasonable for the government to ask any of the shops to trust them” Should be the other way around, that’s why we’re in this fucking mess, get your heads out of your asses
@ 1
http://www.youtube.com/watch?v=cWk6RgQbPVc
Geithner vs. Cramer?
@1 – obviously @2 spelled jack incorrectly, and implied that it was Dodd and Frank that helped create the mortgage mess think Freddie and Fannie, I did not see the poster directly blaming Obama….drink your coffee and wake th f#ck up
If I participate in PPIP is my family allowed to make more than $250K? Until that’s clarified good luck getting people to have a “public private partnership”.
If I participate in PPIP is my family allowed to make more than $250K? Until that’s clarified good luck getting people to have a “public private partnership”.
FINANCIAL POLLUTION
(Pollution, Tom Lehrer)
WilliamBanzai7
Sing along link: http://www.youtube.com/watch?v=oMdmWysEp5w
Time was when an American about to invest abroad would be warned by his friends to be wary of emerging market fraud. But times have changed and now a foreigner coming to this country might be offered the following advice.
If you visit New York city,
You will find it very pretty.
Just two things of which you must beware:
Don’t go near Wall Street and don’t buy any shares.
Financial pollution,
They got asset backed sewage and mud.
Turn on your trading screen and get long and short running crud.
See the halibuts and the sturgeons
Being wiped out by fraudulent urgins.
Fish gotta swim and birds gotta fly,
But they won’t last long with the toxic schlock guys.
Financial pollution,
You can use the latest quantitative toothpaste,
And then rinse your retirement account with industrial subprime waste.
Just go out for a breath of transparent air,
And you’ll be ready for financial Medicare.
Wall Street investing is really quite a thrill.
If the AIG hoods don’t get you, the conniving bankers will.
Financial pollution,
Wear a gas mask and a veil.
Then you can invest, in the Fed’s toxic asset sale.
Lots of things there that really stink,
But stay away from AIG’s derivative kitchen sink.
Throw out the subprime garbage and I’ve got a hunch,
That the folks in Palm beach will eat it for lunch.
So go to the city, see the crazy people there.
Like lambs to the slaughter,
They’re drinking Madoff Ponzi water
And breathing Wall Street hot air.
Nice effort, but I’ve got a soft spot for Sir BAC A-Lot.
public+ private partnership= DOA
Let Ken Griffin in on this
So why don’t they make a team of all the people who created this and make them fix it?
Incentives to purchase? Are you fucking kidding? That’s a stupid, ineffectual mix of measures that won’t move enough capital if they were successful and have zero upside for the taxpayer. A wonderful choice between running a giveaway or pissing into the ocean.