As you’re a aware, a whole slew of groups and individuals have threatened bonus-receiving AIG employees. So far, though, that we know of, none have made good on their intentions, leading us to believe they’re bluffing. This is not the case across the pond, where their British doppelgängers attacked the Edinburgh home of former RBS chief Fred “The Shred” Goodwin, early this morning, smashing several windows and the windshield of his Mercedes-Benz S600. At issue: the matter of FG’s £700,000/year pension despite the minor matter of the bank reporting the largest annual loss in British corporate history last month.
Vandals target Sir Fred Goodwin’s house and car [The Guardian]
Archive for March 2009
Yes, Oppenheimer. YES.
Oppenheimer & Co.’s Canadian parent said it may seek money from the U.S. government’s financial- bailout programs to repay brokerage customers facing losses on frozen auction-rate securities.
Oppenheimer Holdings Inc., based in Toronto, asked shareholders to approve an incorporation switch to Delaware, which would make the firm more likely to qualify for the rescue funds, according to a March 13 proxy statement. Money from the Treasury’s Troubled Asset Relief Program “could assist us” in repurchasing securities from clients trapped when the $330 billion auction-rate market seized up, the company said in the filing.
“It takes your breath away,” Anthony Sanders, a finance professor at Arizona State University, said in an interview. “We’re going to ask taxpayers, the people who got hurt by these securities, to pay for buying them back.”
Oppenheimer May Seek TARP Funds to Repay Auction-Rate Clients [Bloomberg]
Bank of Amerillwide chief Ken Lewis told the LA Times last night that he wants to start giving the government its $45 billion after the completion of the firm’s stress test, which he expects to pass, though no promises, on either front. Lewis said it’s possible BAC will pay it all back “as early as the fourth quarter of this year,” and also defended the Countrywide and Merrill Lynch acquisitions as “strategically sound in the long run.”
…will not be taking celebratory Zamboni joy rides on one of their own this year! Institutional Investor’s Alpha magazine came out with its annual list of the highest paid hedge fund managers today. Here’s who made the most in 2008, calculated by “the managers’ shares of their firm’s performance and management fees, as well as gains on their own capital invested in their funds.”
Obviously there’s a big pink elephant in the room right now, so we might as well acknowledge it by comparing this to 2007′s top earners.
I honestly feel like I’ve been slapped in the face with a Twinkie right about now. How did this happen? HOW? I don’t ask this to be mean,* I genuinely need to know. We knew things didn’t end so great in 2008 (and there was a li’l outburst in the fall) but we didn’t know they were this bad. Someone please help us to understand how this came to pass. Last we heard things at CR Intrinsic– which is, or was, significantly comprised of Cohen’s personal capital, kind of a major factor in the rankings– were a bit tense but we never could have anticipated a blow of this magnitude.
In hopefully unrelated news, Alpha will reveal its NBC reality TV-inspired list of Biggest Losers tomorrow, a group of managers who together lost $6.2 billion in personal wealth last year. But delayed gratification is overrated, so, amongst yourselves, please determine now which names will be named.
*Though, to that end, and in the interest of full disclosure, there is a selfish element to all this. See, gang, heretofore, we’ve been able to so guiltlessly rib the big guy because a) we’re doing it from a place of love, and not hate and b) he’s been insulated from whatever we send his way by a 100 foot radius of estrogen pills, leaf cookies and mega, mega wealth. Now that he’s destitute, we might actually feel a little bad and have to momentarily consider laying off him. Or: continue doing what we’re doing, but send him a cheesesteak for lunch, on us. It’ll be one of these two options, for sure.
**PS, condolences to KG, as well, but we think the wife’s fund had not too terrible a year, so things can’t be THAT bad. If that’s not the case, hit us up for some cash later. We know you’re good for it.
Earlier tonight someone told us about a one-off SAC Capital hire (Shakeeb Alam, previously a senior executive and partner at Boston-based Highfields Capital where he led the firm’s consumer and retail industry investment team, as a PM) that we probably wouldn’t have cared about (because we’re dismissive assholes), except for this– supposedly Alam will be working out of SAC’s “new Chicago office.” When did this happen? We haven’t heard or seen anything about the mini-Steves taking off their shoes, unbuckling their belts and making themselves at home in Ken Griffin’s house, and we (KG) need to mentally prepare for the upheaval (and start deciding what flavors to put in the welcome wagon deep dish pizzas).
Update: Apparently the Chi-town office has been “just getting started over the past couple weeks.” Send your congratulatory Deep D’s to the supposed new space (a block and a half from Citadel’s 131 South Dearborn Street spread):
1 South Dearborn Street Suite 2108
Chicago, Illinois 60603
$$$“President Barack Obama plans to meet with about a dozen of the U.S.’s top banking chiefs in an unusual gathering designed to discuss the administration’s plans to shore up the financial sector.
Attendees are expected to include Goldman Sachs, J.P. Morgan Chase and Citigroup. The meeting comes as relations between Washington and Wall Street are frayed following last week’s furor over bonuses paid to American International Group employees.” [WSJ]
$$$ The leading candidate to run the Treasury’s $700 billion bailout program has withdrawn his name from consideration. [WSJ]
$$$ Meredith Whitney: Regional Banks Are the Future [Economics Blog]
$$$ Successful bank rescue still far away [FT]
$$$ Wall Streeters Flocking to Rehab [Cityfile]
$$$ The gentleman requires a bailout [Foggy Monocle]
House Majority Leader: 90% Tax On Bonus Was Just A Scare Tactic That’s Worked Out Pretty Well, Wouldn’t You Say?
By Bess LevinThe No. 2 Democrat in the House on Tuesday said hastily-crafted legislation imposing punitive taxes on executive bonuses has accomplished its mission even if it doesn’t become law.
Majority Leader Steny Hoyer (Md.) was reacting to an announcement from New York Attorney General Andrew Cuomo that 15 of the top 20 employees at American International Group have agreed to return their bonuses.
“I think, apparently, the House bill had its affect,” Hoyer said. “They’re giving it back.”
[...]
Still, Hoyer defended the House bill as a success and the appropriate response.
“If you’ll recall last week, what did I say? They ought to give it back,” Hoyer said. “I don’t think it was symbolic. It was real if it became law. Now, whether or not it becomes law is another question.
“If the money is returned,” he continued, “the legislation may not be necessary.”
Hoyer says mission accomplished on AIG bonus bill [The Hill]
Holding on to those double digits.
The Obama Portfolio (Since Inception): +14.14%
Earlier: The Obama Portfolio
You’re Required To Get A Bathroom Pass From Lloyd Blankfein Before Taking A Leak, Aren’t You? AREN’T YOU?
By Bess Levin
In case you missed Mad Max’s latest track.
Liberals do not consider cheating on taxes to be as morally problematic as conservatives do. This presents an obvious moral quandry [sic] of its own, as, putatively less surprisingly, liberals are more likely than conservatives are to favor greater amounts of taxation and wealth redistribution.
Liberals and Tax Cheating [The Audacious Epigone]
Krugman doesn’t think much of the latest Geithner plan. Surprise, surprise.
Notice that the government equity stake doesn’t matter — the calculation is the same whether private investors put up all or only part of the equity. It’s the loan that provides the subsidy.
And in this example it’s a large subsidy — 30 percent.
We are sort of puzzled, however, that he hasn’t fixated more on the effect the plan, and the inflated marks it could create, will have on related assets that are stuck in mark-to-market mode, and that this may be the Treasury’s real goal. After all, imagine the multiplier the Treasury is getting this way. Consider:
Agency and non-agency mortgage backed securities outstanding were about $7.5 trillion in late 2008. If a mere 10% of these are currently afflicted with the evils of mark-to-market accounting because they have become Level III assets (we can’t help but think of Schedule III narcotics whenever we see that), the Treasury is in a position here to buoy up marks on $750 billion in assets with the use of $50 billion in capital. (Assuming half the $100 billion PPIP program is used on the Securities rather than the Legacy Loan side of the problem and that the figure stays at $100 billion for the entire program). Plug in your own figure for the amount of subsidy you think the Fed’s leverage is putting on the marks and do your own calculation as to the effects.
We think the plan is just re-inflation (and we bet the Administration really wishes Krugman would shut up about this subsidy stuff) but at least it seems it might be effective re-inflation.
Geithner plan arithmetic [The New York Times]
