Mmmm unlikely, though Cuomo has finally gotten around to rattling his saber in their and other PE firms’ general directions, which is something. Last month Hank Morris, a political consultant to former Comptroller Alan Hevesi, and David Loglisci, a former deputy controller for Pension Investment and Cash Management under Hevesi, were the only ones charged (with 123 counts of “enterprise corruption and other felonies”) for their parts in a little pension scandale, which came down to steering pensions funds to certain advisers who were offering them some sweet kickbacks to the tune of $35 million. Those putting the money on the table were not named as defendants “or accused of any wrongdoing” and were seemingly going to get off on the argument that they themselves were victims of fraud (“We thought that they were a placement agent!”). They still might, but not without some minor discomfort (which is nothing new, as they’ve been “had” through similar scams several times by now).
Archive for April 2009
Rumor has it that significant long preferred – short common positions have been “dancing the corpse” this morning. Also, in the absence of great borrows in the common, a number of synthetic shorts are supposedly floating around out there at 4 and 5 strikes, (though holding any short with strikes this low strikes us as risky) compounding the squeeze effect as the big C heads to $4 and $5 a share.
Whatever the case, Castle Vikula is up over 15%. Go team!
The news of the morning (and after the bell yesterday, of course) is Goldman’s earn-and-burn two-step. Blow away estimates (thanks prop desks!) and burn bridges with the Safecracker and the icy grip of Obarney. But Goldman is looking at a complicated mess to untangle.
First, a sale of $5 billion in common (with Goldman underwriting itself) will surely cause shrill screams to issue forth from the cobweb tangled lair of black-widow Maxine Waters, where the silk entombed, still living carcasses of Ken Lewis, and Count Vikula hang suspended from her ceiling, paralyzed by her neurotoxins. We can hear it now: “You paid yourself fees to take money from the public?”
Second, while Goldman is anxious to dip below the threshold that ties the all powerful bonus dollar up, the Government is decidedly less anxious to let Goldman escape its clutches. Wait for “now is not the time,” to issue forth from the White House. How we would love to see Goldman keep sending the check to The Safecracker until its accepted if/when this happens.
Third, paying back TARP is not enough. The Government also has a large chunk of warrants attached to the deal which Goldman would have to buy back.
Fourth, Goldman is paying over a million a day for the pleasure of Warren Buffett’s company in the form of dividends on the “Buffett Preferred,” which they cannot pay back until the government “lets them.”
We, of course, are cheering Goldman on (insofar as this means cat calling Maxine Waters and Barney Frank) but it is a long road ahead.
It is sort of like the career arc of William Shatner. You know, when he had to do the voice for the animated Star Trek series? There was the first film and then (gulp) TJ Hooker? That was bad. Really bad. But, in a way, what better way to put him out to pasture but as a white cop in “LA” with an expanding waistline? (And there was Heather Locklear to look at, after all). But if you counted the Shat out, you were mistaken. A long series of films followed along with Priceline, of course, followed by The Practice and Boston Legal, putting the big WS back in the captain’s chair until he becomes so corpulent and decrepit that there simply is no where the man has not gone that he may now boldly go. (Of course, the rest of the crew aged less well. Though, James Doohan cost us a deadpool win four years in a row. That guy just wouldn’t give up the ghost).
And so it was with Goldman. Expanded waistline wracked by sudden, illness related weight-loss. On government life support. Sucking saline (and presumably morphine) from the wide open IV. Converting to a bank holding company. Things looked grim, yes. Not so fast, Barney.
Goldman Sachs’ first-quarter results announcement displayed a characteristic mixture of operational prowess and political savvy.
Kicking off the US banks’ reporting season, Goldman handily beat analysts’ forecasts. It also confirmed plans to raise capital and free itself from the shackles placed on its compensation practices by the $10bn of government aid it received last year.
The understated tone of Lloyd Blankfein, Goldman’s chief executive, who said in a statement he was “pleased with this quarter’s performance” could hardly mask the fact the Wall Street bank has set a bar that many rivals will find hard to clear.
It’s Goldman II: Wrath of Blankfein time. Suck it, Montalbán (Waters).
Goldman’s results set a high bar for rivals [The Financial Times]
Jamie Dimon Needs To Be Treasury Secretary ASAP, Geithner Needs To Lighten Up, Francis
By Bess Levin
We already know the CEOs were served bread and water (sans ice, no refills) as though they were common criminals, and that having successfully sneaked a few mini bottles of Boone’s that he surreptitiously took swigs of throughout the hour, Ken Lewis was emboldened enough to comment (slur) that he’d sooner see Bank of America consigned to scrap heap of corporate history than suck up to Geithner and Summers, “like everyone else at this table.” But so far this is the best detail to come out of Obama’s lunch date with the banks:
In an attempt at levity at the meeting, J.P. Morgan Chase chief executive Jamie Dimon presented Treasury Secretary Timothy F. Geithner with a fake check, according to a person who was briefed on the gathering. Geithner looked at it and, without smiling, handed it back to Dimon.
Moves to Repay Rescue Money [Washington Post]
Maybe! According to sources talking to the Post, at least, which may very well be Silda in an attempt to send a hint that it’s time to get off his ass. Obviously, we’re all for it, if it’ll mean more interviews like this. What about that whole banging of a working girl thing, you ask? Ness sees your “What about the prostie?” and raises you an “Oh that? Soooo not a big deal.” Supposedly the noted hooker fucker has been telling friends, “My record as governor was disappointing, but the voters will remember my excellent two terms as attorney general.” Still, the naysayers will not quit it with their bitching. “The whole idea of returning to Albany is preposterous,” some anonymous hater told Page Six. “You can’t go home again. He’s a pariah. It wasn’t just the prostitutes — there was also Troopergate.”
Since the whole thing would be worth it just for the attack ads, clearly there are going to be a lot of people, ourselves included, pushing for this run. In the event it does go down, give it to us straight:
GM Recalls 1.5 Million Vehicles (WSJ)
The idea, of course, being not to kill American Taxpayers, as that’s their chief source of income now. But, in related news (and far less morbid), it appears the New York auto show has become ground zero for hecklers.
You Have To Love Bloomberg (NYT)
While the rest of the world is on a public sponsored field raping of the financial industry, Bloomberg has pretty clearly declared his appreciation for the affluent.
“Mr. Bloomberg, a billionaire many times over, has also vouched for vilified Wall Street titans like Richard S. Fuld Jr., the former chief executive of Lehman Brothers.
“There’s Lehman Brothers, who I feel very sorry for,” he said during a news conference. “Dick Fuld, I’ve known for 40 years, who’s a competent guy, and people are criticizing him. They didn’t criticize him when things were going well for an awful lot of years.”"
Economics Predict September Turnaround (WSJ)
The chief concern going forward (according to the poll) will be unemployment, which won’t fully recover for some time.
“Even when the economy stops shedding jobs, the unemployment rate is likely to remain elevated for some time. “The unemployment rate isn’t going to recover, because you have to get back everything you lost and then some,” said Joseph Lavorgna of Deutsche Bank Securities Inc. He estimated that the economy would have to grow an average of about 4% for six years to get back to the sub-5% unemployment rates seen in 2007.”
UBS Cuts 3% Of Asia-Pacific Staff (Reuters)
“A UBS spokesman in Hong Kong said on Tuesday the bank will cut 240 jobs, all in the wealth management business. Banking sources said they included 100 redundancies in Singapore, where UBS is a relatively strong player in private banking.”
And you thought today would end without a good, deep laugh.
President Barack Obama is expected to tap Fannie Mae Chief Executive Herb Allison to head the government’s $700 billion financial-rescue program, people familiar with the matter say.
Bank Vet Tapped to Run Bailout [The Wall Street Journal]
$$$ Recession Pain, Even in Palm Beach [NYT]
$$$ Mr. Whitney/WWE Not On Good Terms? [Wrestling Edge]
$$$ AIG: Bonuses or ransom? [The Deal]
$$$ Can GM Be Sold In Bankruptcy? [Deal Journal]
Compensation and benefits expenses (including salaries, discretionary compensation, amortization of prior year equity awards and other items such as payroll taxes, severance costs and benefits) were $4.71 billion, 18% higher than the first quarter of 2008, primarily due to higher net revenues. The ratio of compensation and benefits to net revenues was 50.0%, compared with 48.0% for the first quarter of 2008. Employment levels decreased 7% compared with the end of fiscal year 2008.
Goldman Sachs 2009 Q1 Earnings [PDF]
Goldman Sachs Reports First Quarter Earnings Per Common Share of $3.39 [Market Watch]
Not two years ago, Breakingviews will tell you that much. In case those of you graduating from business school less than two months from now didn’t already have the shotguns in your mouths, BV would like to give you that extra little nudge in the right direction today. You’ve got no prospects, and you’re not going to have any for quite some time. Plus, your competition is more experienced, more desperate, and more willing to work for a ten-spot and box of tissues with which to JO&C. But take heart!
But when, damn it, when? Class of ’10 is probably fucked, how ’bout ’12? ’15? We need serious guesstimates here. Let’s time this thing right.
Earlier: Let’s Talk B-School: A Dealbreaker Reader Poll
