I sincerely hope no one’s blown their load on the AIG bonus payout scandale just yet– there’s still so much more to work yourselves into an aneurysm-resulting tizzy over. Erin Burnett reports that among the $165 million in trash bags of money, personally delivered door to door by Ed Liddy, a significant amount of taxpayer cash is being stuffed in the mouths of employees based in London (i.e. these guys).
Archive for March 2009
Goldman Sachs et al have received the brunt of the tongue lashings since AIG disclosed yesterday which financial institutions received payments last fall. And though we would never suggest you throw ire at our favorite midwestern hedge fund, we also don’t think it should be left out of the fun.
Citadel Investment Group and Paloma Securities–a branch of Conn.-Based Paloma Partners–were paid $200 million each of taxpayer dollars between Sept. 18 and Dec. 31, according to the list of securities lending counterparties released on Sunday by AIG.
According to the insurance giant, the payments were contractual obligations of AIG under its securities lending agreements.
Two Hedge Funds Among Recipients Of AIG’s Bailout Bucks [FINalternatives]
The word from the White House this morning, via Squawk Box, is that “President Obama will appear on The Tonight Show with Jay Leno this Thursday to talk about the economy.” Let that sink in for a sec.
$823 million.
Actually, between $823 million and $826 million. That is what the Jewish T-Bill managed to come out on the other side of $65 billion (or so) with. At least, “according to court papers filed on Friday.” $700 million of that is tied to Big B’s ownership in Bernard L. Madoff Investment Securities LLC.
Madoff to appeal bail, net worth revealed [Reuters]
$$$ Hedge Fund, Private Equity Titans Crowd Billionaire List [FINalternatives]
$$$ Madoff: The Chase Connection [Portfolio]
$$$ The Kogans “Win” In Greenwich though their plans to out-bowl our boy were sullied long ago. [Cityfile]
$$$ “There is nothing more tantalizing than a chance to peek into a private art collection, especially when it has been secreted in a fortresslike compound in Greenwich, Conn., and when the owner happens to be the hedge-fund billionaire Steven A. Cohen.
Next month Sotheby’s will show a group of 20 works that the [Cohen and his wife, Alexandra] have collected over the past decade. The exhibition, from April 2 to 14 in the 10th-floor galleries at the firm’s York Avenue headquarters in Manhattan, is a carefully selected group of paintings, sculptures, works on paper and photographs that all depict women.” [NYT]
Is this what we might call pumping (the shit out of) the stock? (JK, of course. Love you, SC. Mean it.)
$$$ Job of the Week: Fortress needs a Quantitative Developer. That could be you! [DB Career Center]
$$$ Finally, a long-belated shout out to Dealbreaker’s favorite (college) fund, the Duke Investment Club, which beat Steve Mandel, L-Train, and a bunch of other chumps in 2008!
Best capitalized bank on the Street just makin’ good on it’s word!
Citigroup Inc, a U.S. bank that has received $45 billion from taxpayers since October, is paying multimillion-dollar guaranteed bonuses for salesmen and traders it has hired in London, people familiar with the matter said.
The bonuses in London will be largely in cash, some as high as $2 million to $3 million, and a senior Citigroup trader in New York told a recruiter he was willing to hire with cash bonuses in the United States, the recruiter said, asking not to be identified because of a client confidentiality agreement.
Earlier: In Dick Parsons’ Humble Opinion, Citi Is Pretty Much The Best Capitalized Bank On The Street, Inching Closer Every Day To Pandit’s Goal Of Becoming The Best Company In World, Bar None
Citi Guarantees Bonuses For London Hires [Reuters]
We know it is part of his folksy-shtick to play the boy from Omaha made good. (Real good). Be this as it may, something feels wrong with the datapoints plotted by three paragraphs in the DealBook’s review of Buffett compensation:
Mr. Buffett has been an outspoken critic of huge executive compensation packages at other companies. In keeping with that philosophy, his own company does not award large pay packages or give out stock options.
[...]
Forbes valued Mr. Buffet’s net worth at $37 billion, $25 billion less than just a year earlier, when the magazine estimated he was worth $62 billion.
[Charlie Munger's] net worth fell to $1.4 billion, from $2.4 billion a year earlier, according to Forbes.
Isn’t just a little too easy to be critics of executive compensation when you’ve got this much sitting in the PA?
Yes, yes, we know that Buffett has gone to great lengths to give away the vast majority of his holdings over time. It still strikes us as a bit… off.
No Bonuses Here: Buffett Is Paid Just $175,000 [DealBook]
Happy birthday… Mr…. President.
Well done. Well done indeed!
The Obama Portfolio (Since Inception): +7.86%
Earlier: The Obama Portfolio
While it may not be the place for tax avoiders (evaders) it’s still a Mecca for legitimate tax arbitrage. Convinced, with good reason, that they are about to be tagged with windfall profits taxes, green taxes, anti-petrol taxes, and “you are too profitable” taxes, a number of energy companies are moving to Swiss cantons, like Zug, to take advantage of promotions like 5 and 10 year tax holidays, pre-negotiated corporate tax rates and, occasionally, the personal tax rates for executives that remain valid for up to 20 years and a fistful of “C Permits” for your closest relatives and essential colleagues.
Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.
“Switzerland has a stable and developed tax regime and a network of tax treaties with most countries where we operate,” Transocean Chief Executive Bob Long said in a statement in October, when it announced its move.
“Stable” being the key word here. Regulatory predictability is still, in some countries, an asset.
…in Zug, corporate tax is about 16 percent but can fall as low as 9.5 percent for companies that do most of their business outside Switzerland. That compares with an average global corporate tax rate of 25.9 percent, according to consultancy KPMG.
[...]
“One trend that we see is that particularly Bermuda-based companies are now moving to Switzerland,” said Martin Frey, a partner at law company Baker & McKenzie. “That may only partly be obviously for tax reasons, but also for security reasons and the fact that the Obama administration may go after them.”
I wouldn’t be surprised if the executive office building suddenly mutates a copy of the “expatriation is a death event” tax statutes and creates the “corporate expatiation is death event” tax, treating the corporate departure from the United States as a sale of all assets and leveling a tax on the hypothetical gains. Laws extending United States taxation to non-citizens in a similar way have been on the books since 1996. Effectively, the intent is to make sure that the departing ex-pat continued paying “their dues” long after they had left the country with no intention to return.
Is anyone really surprised that as expat tax terms stiffened in 2006 the United States saw an increasing number of citizens turning in their passports? We think that a little extreme, but wouldn’t blink twice at moving our little corporate headquarters out of the United States for friendlier lands if someone decided to level a punitive tax on snarky blogs.
Corporate oil booms in low-tax Switzerland [Reuters]
It is popular to speculate about what might happen if China ever grew tired of providing the United States with cheap capital to fund [mass consumerism/the real-estate bubble/our exorbitant lifestyle/our fat/flat-screen televisions/the deadly "greed virus"]. We think these questions overblown. It might be simplistic to think about Sino-American economic relations as China lending us money at low rates so that we can buy massive amounts of cheap exports that the Chinese would never want and could never use, thereby keeping their unemployment rates low and providing a nice return on their investment. Then again it might not.
Chinese leaders are not as concerned with staying in power as not being shot in the back of the head. The bargain the Party has struck with its subjects (“Leave the political power to us and we will deliver you a measure prosperity via ‘capitalism lite,’”) doesn’t leave much room for maneuver if the prosperity bit starts to slip. It isn’t an accident that the government recently made some gentle reminders to its humble citizens (and not so humble students) that another Tienanmen wouldn’t be tolerated. So, dump treasuries in bulk? Not so fast. But they will, we think, try to get some mileage out of the perception.
The premier said Beijing expected to see results from President Barack Obama’s economic recovery plan but expressed concern that massive U.S. deficit spending and near-zero interest rates would erode the value of China’s huge U.S. bond holdings.
That’s right, Mr. President. You work for Beijing now.
China is the biggest holder of U.S. government debt and has invested an estimated 70 percent of its $2 trillion stockpile of foreign exchange reserves, the world’s largest, in dollar assets.
“We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries.
“I would like, through you, to once again request America to maintain their creditworthiness, keep their promise and guarantee the safety of Chinese assets,” Wen said.
This may well end in tears.
China expresses worry over its U.S. assets [Reuters]
Yeah it’s definitely not going to happen, but lawyer Ira Sorkin is trying his hardest to get inmate No. 61727-054 out the Metropolitan Correctional Center (where he’s been remanded without bail ’til sentencing on June 16th) and back in the penthouse. [via Daily Intel]
