$$$ Mess With Jamie Dimon At Your Own Risk [Cityfile]
$$$ What About That Other $28 Billion, Goldman? [Floyd Norris]
$$$ Lex tackles the question of prediction [The Deal]
Archive for April 2009
The Obama Portfolio (Since Inception): +18.70%
Earlier: The Obama Portfolio
From the front lines: “JPM is breaking up F.A.S.T. MDs & EDs bearing the brunt of the layoffs while most VPs and below are being placed elsewhere in the bank.”
Update: Seemingly confirmed from the inside. www.jpmorgan.com/pages/jpmorgan/investbk/solutions/fixedincome/rate/fast as of 3:45:
And now:
We joke quite a bit about debtors’ prisons in times like these. Particularly when debt gets out of hand and everyone seems to be drinking from the same well. But how sure are we really that we’d like to head backwards into that anachronism? Megan McArdle touches on the issue as she reviews last week’s article in The Independent on the Dark Side of Dubai.
“Before I came here, I didn’t know anything about Dubai law. I assumed if all these big companies come here, it must be pretty like Canada’s or any other liberal democracy’s,” she says. Nobody told her there is no concept of bankruptcy. If you get into debt and you can’t pay, you go to prison.
“When we realised that, I sat Daniel down and told him: listen, we need to get out of here. He knew he was guaranteed a pay-off when he resigned, so we said – right, let’s take the pay-off, clear the debt, and go.” So Daniel resigned – but he was given a lower pay-off than his contract suggested. The debt remained. As soon as you quit your job in Dubai, your employer has to inform your bank. If you have any outstanding debts that aren’t covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.
Play with the bull (market)….
Why Bankruptcy Matters [Asymmetrical Information]
Cuts are said to be going down in commodities circa now. Parting gifts are two weeks for “new” analysts and and associates (split pretty evenly among legacy Barclettes and former Lehmans). Unfortunately, BarCap blocked this here website a few weeks back, so we won’t be able to get the play-by-play from onlookers, but if you were sadly among those sent home sent home (forever) and have more info to share, get in touch.
The carry trade is making a comeback after its longest losing streak in three decades.
Stimulus plans and near-zero interest rates in developed economies are boosting investor confidence in emerging markets and commodity-rich nations with interest rates as much as 12.9 percentage points higher. Using dollars, euros and yen to buy the currencies of Brazil, Hungary, Indonesia, South Africa, New Zealand and Australia earned 8 percent from March 20 to April 10, that trade’s biggest three-week gain since at least 1999, data compiled by Bloomberg show.
We can’t wait till Iceland’s króna trade fires up again!
Carry Trade Comeback Means Biggest Gains Since 1999 [Bloomberg]
It’s sort of odd that Lehman is “sitting on 500,000 pounds” of yellowcake uranium. Not because it is odd for firms not directly in the business to own an interest in the element. This is quite common actually as uranium futures are actually traded now. What is unusual is that Lehman would seem to have taken physical delivery- a scenario which would imply licensing and a host of regulatory headaches that seem silly when you can trade cash settled futures contracts if you really want to play the metal. In any case, Lehman acquired the stuff “under a matured commodities contract.” (Read: The contract expired and they were forced to accept physical delivery). Now they are stuck with a pile of the stuff in Canada- where no one wants it, and in a down market.
Doh.
Lehman Sits on Bomb of Uranium Cake as Prices Slump [Bloomberg]
Yes, Bernanke. YES. And it’s not even like you’re at Yeshiva. You’re at Morehouse College, Bernanke. Morehouse. That was inspired, friend. Next month come dressed as a Hasid and recite the Mourner’s Kaddish* and you’ll have really taken it on home.
Prepared speech, Morehouse College, Atlanta, Georgia
Four Questions about the Financial Crisis
I am pleased to have the privilege of speaking today to the students and faculty of Morehouse College, the only all-male historically black institution of higher learning in the United States. It is sufficient to note that Martin Luther King, Jr., was a graduate of Morehouse. Yet a roster of distinguished alumni that also includes former Atlanta Mayor Maynard Jackson, former U.S. Surgeon General David Satcher, and filmmaker Spike Lee testifies to the success of your stated mission of “producing academically superior, morally conscious leaders for the conditions and issues of today.”
My remarks today will focus on the ongoing turmoil in financial markets and its consequence, the global economic recession. The financial crisis, the worst since the Great Depression, has severely affected the cost and availability of credit to both households and businesses. Credit is the lifeblood of market economies, and the damage to our economy resulting from the constraints on the flow of credit has already been extensive. With recent job losses exceeding half a million per month, this year’s college graduates are facing the toughest labor market in 25 years. In the communities in which you and I grew up, many families are trying to cope with lost employment and depleted savings or are facing foreclosure on their homes. Firms have shut factories and cancelled construction projects. States and municipalities are scrambling to find the funding to provide critical services. And although we naturally tend to be most aware of conditions in the United States, we should not overlook the impact that the crisis is having virtually everywhere in the world, particularly on many citizens of countries that struggle economically even when the global economy is doing well.
In the midst of all of these concerns, many Americans have recently celebrated Easter or Passover. As you may know, a highlight of the traditional Passover meal occurs when the youngest child asks four questions, the answers to which tell the history of the Jews when they were slaves in Egypt and during their exodus to the Promised Land. In the spirit of the holiday, today I will pose and answer four important questions about the financial crisis. Of course, my answers will have to be brief, but we will have more time for additional questions at the conclusion of my prepared remarks.
*All my Jews in the house get it?
Ponzi Nation’s victims are mobilizing and they’re after your shit! A group of Madoff investors moved last night to force Bernie-boy into involuntary Chapter 7 personal bankruptcy, and while the claims are pretty much pocket change, totaling just over $60 million, they’re personal. “We filed this to make sure nothing slips by and that the victims get everything,” attorney Jonathan Landers, who filed the bankruptcy petition, said. “Somebody’s got to go digging, and one of the problems is we’re not sure that anybody has done enough digging fast enough yet.” They’re on top of it now, though, and “gifts made by Madoff to friends and family going back six years” are fair game, meaning some people should consider stashing lavish Hannukah gifts and checks where the sun don’t shine ASAP.
In happier, tastier Madoff-related news, the rest of the Mets tickets are for sale.
AIG Chief Whipping Boy and $1 Man Ed Liddy sat down with the Chicago Tribune last week, and yesterday we got an edited version of the chitchat. Spoiler alert: Hank “Wasn’t Me” Greenberg will not be pleased, and is likely getting Maria Bartiromo on the horn as we speak to schedule a Closing Bell appearance to clear his name, for the 87th time this week, and to remind everyone listening to have your pets spayed or neutered (by which I do not mean to imply senility has given way to believing himself to be Bob Barker giving his usual show ending send-off. That was wishful thinking on your part).
Q: Of these three, who bears the most responsibility for AIG’s derivative losses: Hank Greenberg, Martin Sullivan or Joseph Cassano?
A: I’d say it’s equal parts. There’s plenty of shame to go around. The establishment of (AIG’s financial products unit) was done by Hank Greenberg. That culture was one of, “What’s in it for me?” They got 38 percent of the profits.
Q: Will AIG need more government money?
A: I like where we are.
