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.
Archive for March 2009
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.
The President said last week that Tim Geithner’s been doing a heckuva job and that everyone needs to just back the shit off but for the skeptics out there who thought the endorsement was a harbinger of a firing to come, how wrong you are. Obama is never ever letting Geithner go, no matter how badly the Treasury Secretary begs and pleads.
Apparently you can’t disclose nearly a six percent stake in the place, agree to let the public get within spitting distance of your most prized paintings, and say stuff like “Why not let the public see the pictures?” all casually (save for the telltale sign of your voice cracking), despite heretofore enforcing a 200 yard Stay Back zone between yourself and other mammals, without people wondering if you’re up to something. The Post claims that there’s speculation Stevie-B “intends to take Sotheby’s private, since he can buy it for about $595 million less than half of what’s he spent on his art collection.” (And in a giant leap of logic, that by buying the auction house, our favorite Stamfordian would be creating “a museum.” Not that we wouldn’t be down in a second for the GuggenSteve, but auction house does not a museum make). Anyway, this thing has our full backing, especially if the big guy will be conducting the auctions himself and, using various wigs and affecting British accents, playing five different bidders.
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:
The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.
The outlines of the plan are expected to be unveiled this week in preparation for President Obama’s first foreign summit meeting in early April.
Officials said the proposal would seek a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.
Administration Seeks Increase in Oversight of Executive Pay [The New York Times]
Related: After The Jump
$$$ Connecticut to force AIG bonus recipients to testify [Greenwich Time]
$$$ Prosecutors Release Letters From Madoff Victims [WSJ]
$$$ Madoff Employee Breaks Silence [TDB]
$$$ It’s all coming together: “All areas of MER compliance got whacked today. Affected both the WFC and 222 Broadway. My whole team got let go except for 1, including ML’s head of equity compliance.”
$$$ Job of the Week: BlackRock needs a Credit Derivative & Special Situations PM [DB Career Center]
CNBC reports Count Vikula has sent a message to Washington re: taxing the hell out of bonuses from any bank that receive TARP funds, arguing that everyone who’s caused Citi to lose money is no longer with the company, and this isn’t fair. Which kind of makes sense!
Full memo sent to the Little Viks via the Journal:
To:All Citi Colleagues
From: Vikram Pandit
Date: March 20, 2009
Re: Washington Update
Our industry has recently seen a tide of negative sentiment rising in Washington, D.C. regarding compensation. Of course, some of it is warranted. But I take exception when there is a discussion about spreading the blame to each and every employee in the financial services industry. At our company, we removed the people responsible for Citi’s financial distress and acted fast to strengthen and streamline the business, and install new risk processes and new risk personnel. You have been invaluable in our collective efforts to put the company on solid footing.
The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees. It would affect countless number of people who will find it difficult, if not impossible, to pay back the bonuses that they earned.
Say goodbye to double digit territory. That’s unfortunate. Still, a tidy gain thus far. Can it hold?
The Obama Portfolio (Since Inception): +8.42%
Earlier: The Obama Portfolio
And when that fails, arm-wrestle some sense into them, winner takes all? We have no idea but let’s grab on to the shred of hope gleaned from an unofficial e-mail sent out last night by Jes Staley, global head of JPM’s asset and wealth management division:
I’m sure most of you have seen the House of Representatives’ bill regarding employee bonuses at firms that have received TARP funds. While it is necessary and appropriate to keep my comments brief, given the evolving issues, please know that the Operating Committee and Government Relations are working hard on all of the challenges we are currently facing. Thank you sincerely for staying focused on our clients and our business.
