Archive for March 2009

  • 16 Mar 2009 at 9:06 PM

Dealbreaker Afterdark: Yep, We’re A Real Bank!

By Equity Private

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For almost 100 years we’ve been providing personal, “countryfied” service to our neighbors and friends and now we’re ready to show you how great it is to be a real person to your banker!
There’s nothing more serious than money. We see this everyday, and in today’s financial climate, we notice increased concerns about spreading personal income beyond basic bills and necessities. Food costs more, gas costs more, and utilities are going up. The growing concern of our customers is a natural concern to us.
So, we thought, “Let’s inject a little fun into the seriousness of the banking business.” And we came up with the idea of Redneck Bank®. And then we thought, “Let’s make it as convenient as possible and let our customers earn as much interest as possible.” And that led to developing an internet banking division and paying the highest possible interest on a choice of bank accounts.
Redneck Bank® is the Internet Banking Division of Bank of the Wichitas®, a bank that was established in 1913, is insured by the FDIC, and has a long history of excellence in the banking industry. So while we have a little fun banking together, you can rest assured your money is safe with us!
Give us a try today. You can open an account with some pocket change… we’ll make you want to do your banking business with us forever. We aim to please!

Redneck Bank [Redneckbank.com]
HT: SEG

  • 16 Mar 2009 at 6:36 PM

Write-Offs: 03.16.09

By Bess Levin

$$$ Madoff’s Mugshot [CNN Money]
$$$ Pandit: the 38.2 Million Dollar Man [SEC]
$$$ You probably sensed it a couple weeks back, but we now have the official word that Ron Isana is back with CNBC, which we think, completely sincerely, is excellent, as RonIs can barely contain his contempt for his former colleagues. With every roll of the eye, with every, “I can’t wait to trash talk these people with the Big Guy after work,” an angel gets its wings. [NYT]

  • 16 Mar 2009 at 6:06 PM

Futures (And Campbell) Killed The Cheap Lunch

By Equity Private

Remember how Southwest was just killing everyone because they had something like 80% of their forward fuel requirements hedged at absurdly low prices for quarter after quarter? That worked wonderfully… until it didn’t. It did, of course, earn Southwest the title of “The King of Fuel Hedging.” Boosting their own hedging programs ended up costing a lot of other carriers (as well as Southwest) serious money later on. United Airlines had nearly half a billion in unrealized losses on fuel hedging not so long ago. (Anyone know how that turned out?) Of course, what looks smart at the time (does locking in years of prices when oil is at $102 a barrel ever look smart?) can look rather foolish later. These damn derivatives are tricky animals. Very tricky. And now their evil complexity has claimed another victim:
Cheap soup.

Consumers looking for relief from rising food prices are not likely to see any price cuts soon from Campbell Soup Co (CPB.N: Quote, Profile, Research, Stock Buzz), which is still dealing with high commodity costs under previously set contracts.

Pesky futures contracts!
Well, surely in these tough times, especially when derivatives have hit the typical family of four trying to pinch pennies by eating tomato soup and some toast for dinner where it really hurts, some price relief is in order, isn’t it? In a word. No:

“Quite frankly, sales are growing, our marketplace presence is growing, consumer purchases are actually growing faster than sales,” Conant said. “Clearly we’re having a good year, we’ve had the best year in soup that I’ve experienced in my nine years here.”

Does the evil of this system know no bounds?

One strategy the company has adopted is to offer some Pepperidge Farm bread loaves with smaller slices as a way to save money.

You want bread? THREE DOLLARS! (After the jump).

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  • 16 Mar 2009 at 4:57 PM

We Love You, So Hurry Up And Die

By Equity Private

There are fewer relationships stranger than that between Saudi Arabia and the United States. Of course, who knows if Reuters is actually even close to the mark when they connect Barack Obama’s call to King Abdullah with Saudi’s recent announcement that present supply cuts would be quite enough, thank you very much, but no one seems to mind if the credit is laid at the feel of Obama and AT&T. (Seems Bush’s oil connections aren’t actually a prerequisite to get King Abe on the ring-a-ding).

OPEC Secretary General Abdullah al-Badri was rather pointed about the change in tenor: “I don’t want to say that I voted for Obama, but we can see a different tone … that we didn’t see in the past.”

Ever the United States, the gesture was followed up with a big “piss off” in the form of promises that the United States would never spend a bloody dime on that black sewage or sully its hands coping with the tar pit of the Middle East again if given even half a chance to quit the habit.
Saudi princes were, meanwhile, heard quipping ironic proverbs about not bleeding a man too dry if you wanted blood again next week.
OPEC bows to weak economy, Obama effect [Reuters]

  • 16 Mar 2009 at 4:48 PM

Cuomo: “Concern Is That Taxpayer Dollars Are Respected”

By Bess Levin



And: “Performance bonuses for AIG are oxymoronic, Maria!”

  • 16 Mar 2009 at 4:42 PM

The Obama Portfolio

By Equity Private

Well, the rally couldn’t last forever. But the First Sell-Sider is still sitting on a nice gain after his market call.
The Obama Portfolio (Since Inception): +6.63%
Earlier: The Obama Portfolio

  • 16 Mar 2009 at 4:25 PM

Body Scans For Everyone, Free Of Charge!

By Equity Private

scanme.pngIt was probably only a matter of time until the call for “blood, damnit, and, frankly, anyone’s blood will do” got loud enough that being a customer of a particularly unpopular organization started to get dangerous. That time is at hand. Between calls to out the names of every U.S. customer of a given foreign bank, demands that AIGs counterparties be disclosed, salary and bonus figures for employees of organizations that, today, happen bear the ire of the public, and the customer of the Fed’s discount window (or customers of any other of the Fed’s wide ranging products for a modern financial world), it is quickly looking like there might not be a private transaction left in the country after July 2010. It is worth mentioning that, with the exception of depositors in Swiss banks, none of the people about to be exposed as involved in perfectly legal transactions, have even been indicted, much less convicted of committing any crime. Much as Goldman Sachs might make my toenails itch, the fact that they bought credit default swaps from AIG doesn’t make them evil. (Well, not only that, anyhow). Nor is it particularly useful to know that a given AIG CDS customer is French. (Well, it’s useful to us, but we make fun of the French for a living).

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  • 16 Mar 2009 at 4:07 PM

Happy Birthday, Sandy Weill!

By Bess Levin

Picture 900.pngThe former Citi CEO turns 76 today, and while we’ve got our fingers crossed whatever he’s got planned is nothing short of magic, we can’t help but feeling there’s a dark cloud hanging over this year’s celebration. Jetting off with your friends just isn’t the same when you have to pay for it out of your own pocket, rather than allow your former employer to do so, you know? In headier days say best bud Alwaleed would have this one covered, no question, but these days he’s got his set own problems. Perhaps Vikram saw fit to toss the guy a bone? For old time’s sake?

  • 16 Mar 2009 at 3:30 PM

The Clock Is Ticking

By Bess Levin

Cuomo said he wanted info from Liddy re: bonuses by 4PM or his belt would come off. Will Lids take a page from BAC’s play(a)book and cat ‘n mouse the shit out of this thing? We’ll know in T-30. In related news, CNBC reports that House sub-committee will holding a Wednesday hearing on AIG, which Liddy as been “invited to attend.”
Update, 4:25: Cuomo received no information, therefor “subpoenas will be issued immediately.”

  • 16 Mar 2009 at 3:17 PM

CDS Killed The Casino

By Equity Private

jimmy.pngMaybe it is just us, but putting up your Casino to cover your near-default debt, well, that just seems… strange somehow. Sure, it’s a great (and nearly all-cash) business that could only please the lenders as security, but a posting Casino as collateral seems, somewhat off. Backwards. “In Bailout Nation, Casino asks you for marker.”
Maybe it is that getting in trouble with creditors in the gambling business just has a sinister tone to it. Or that it is hard to compute how one would manage to get in that sort of a fix in the first place, given the fact that the Casino is one of the original “cash cow” businesses. Whatever the case, MGM Mirage has managed to get in exactly that sort of fix.

MGM Mirage, seeking to modify lending terms on its unsecured debt and avoid default as gambling activity withers, is in talks with banks to pledge casinos as loan collateral, a person with knowledge of the discussions said.

Bloomberg points out an interesting twist that will surely get the enemies (and friends) of Credit Default Swaps in a tizzy, namely, that banks who have bought CDS on MGM Mirage’s debt might not be particularly incentivized to help MGM out of this pickle.

“That’s a mystery element here,” Cohen said. “To what degree are the bank lenders holding credit-default swaps so they don’t give a damn if MGM goes bankrupt.”

Of course, this is true of any over-collateralized lender, but we strongly suspect that this nuance will be a small voice of reason lost among the chaotic cries of “moral hazard!” (Nevermind that this is not a moral hazard problem, the term makes for good ink when you want to say “unfair” but your press secretary has saturated that phrase already).
Don’t despair. The Lion may yet roar:

“Talks with our financial partners are ongoing,” MGM Mirage said in an e-mailed response to questions. “We’re evaluating every possible option and, as we’ve said before, we will explore all serious and credible possibilities.”

MGM Mirage Said to Offer Casinos as Security to Avoid Default [Bloomberg]

  • 16 Mar 2009 at 2:39 PM

Madam Doth Protest Too Much?

By Bess Levin

Not to make light of sex trafficking, but in this economy, sometimes you have to go the extra mile if you want to stay employed, you know? If you’re not going to do it, there are 100 laid off BAC employees who will. Christopher Ruppmann apparently does not see eye to eye with us on this point, which would explain why he’s suing former employer Broadreach Group and founder Brian Grover, who allegedly told Ruppmann to have sex with a client.

The client, Kate Mackenzie, is a former member of the US Olympic rowing team, and works at the hedge fund Two Sigma Investments. She did not return calls for comment.
Ruppmann’s lawyer, Daniel Kaiser, said he did not believe Mackenzie had any knowledge of the lewd suggestion.

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