Archive for March 2009

  • 27 Mar 2009 at 11:03 AM

Let’s Narrow This Down

By

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]

    • 27 Mar 2009 at 10:47 AM

    Sir Stanford Not Going Downtown Without A Fight

    By

    Picture 996.pngThought 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.”

      • 27 Mar 2009 at 10:18 AM

      Main Street Becomes The Main Squeeze

      By

      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]

        • 26 Mar 2009 at 6:03 PM

        Write-Offs: 03.26.09

        By

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

          • 26 Mar 2009 at 5:07 PM

          What If No One Came?

          By

          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.

          • 26 Mar 2009 at 4:50 PM

          Layoffs Watch ’09: Citi

          By

          Picture 995.pngDaily 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.

            • 26 Mar 2009 at 4:15 PM

            When The Scammer (‘s Lawyer) Becomes The Scammed!

            By

            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