Archive for April 2009

  • 13 Apr 2009 at 9:45 AM

The (Joy/Horror) Of FDIC Public Comment Periods

By Equity Private

I approached with trepidation the assignment of reviewing public commentary on the FDIC Legacy Loans Program, as I assumed the commentary would, as is typical for such openings, be drab, dull, and require substantial review to uncover the few gems that might amuse, titillate or otherwise entertain. How wrong I was.
These are but samples from a fraction of the comments. Do enjoy:

…However, I can’t get 4% on a “business loan” because I am not some kind of Wall Street big wig.
Instead, I will continue to liquidate all of my wife’s retirement savings (mine are already gone), at 30% losses, to pay the above rate mortgage until all the retirement money is gone. Then, we declare bankruptcy.
Thank you oh wise leaders of our Republic. Thank you for showing us how little we matter. Thank you for reminding us that we are merely rabble whose concerns can just be ignored or rationalized away.
Thank you for ruining our lives.

Not just any garden variety financiers could think of so many good tricks for getting money (and leverage and other force-multipliers) into the pockets that matter.
So what I would like to suggest is that they quit fooling around and put Bernie Madoff in
charge of the whole shebang. Turn the FED-Treasury over to Bernie. He knows what to do.
[...]
So bring on the free money, YAY! – and then oops, we’re very sorry but the re-inflation
is unsustainable; the bankers crack-cocaine binge is over, and the taxpayers have the biggest hangover in financial history to show for it. Right? I mean, that’s how these things end; the bigger we blow up the bubble the bigger the blast when it pops. So clearly, the way to deal with this inevitable crash is to delay it as long as possible.
Bernie proved that he could keep a multi-billion dollar Ponzi scheme going for YEARS. He’s financially sophisticated, with a track record that speaks for itself.
Bernie! He’s our guy.

…As such, I am obliged to tell you how broke I am as you are continually reaching into my bank book to pay for these crazy bailouts. What, you didn’t think I could see through this latest PPIP?
Being broke, I cannot afford this.
Neither can the rest of the taxpayers. I’m not sure if you’ve seen the latest numbers, but this government is in debt up to its ears.
It therefore follows: you can’t afford it. Do you get this? You are spending my money.

Tax payers lose a trillion dollars paying top dollar for the toxic waste. This is a transfer of wealth from the common american citizen to the greedy wealthy wall street bankers and their investors. Ironically, Our prez may like to see the reverse happen. I guess eventually the Prez can tax the middle and upper class and get the trillions back.

You should be ashamed at your pathetic dissembling. ARE WE TAXPAYERS SHARING IN EQUAL PROPORTION TO OUR INVESTMENT? Please don’t issue statements like these again. It permanently impedes the return of confidence.

Send all the greedy cheaters to jail. 110% tax their income, take all their assets, let the cheaters and their families go homeless like so many others(and veterans are a big group of the homeless) and you will put a stop to all the greed that created this mess. Sorry, I’m talking to the government, which only understands how to spend, spend, spend their way out of a crisis(rather than work thru a crisis). Let the free market take its toll, destroy the economy and then life will get fixed. Most of you that have never really had to work and hold a job to make a living don’t have a clue.
Yours in poverty and debt
A True Bill Paying Saving American
Name withheld cause you will probably hold this against me, somehow-someway

As an American taxpayer who has served in our Military, I feel an express right to demand that this entire program be stopped.
The purpose of this program is NOT price discovery, and any claim along those lines is a lie. The purpose is to keep the banks from recognizing losses that already exist, by reversing them via unloading the paper at a fictitious high price and dumping the loss on the taxpayer. Unless and until the bondholders are forced to take losses before the American taxpayer, I will stand against this corrupt arrangement.
XXXX XXXX
Former United States Marine
Taxpayer
Rule follower, no debt accept his home loan
Voter
instigator if this crap does not stop

Legacy Loans Program – Public Comments [FDIC.gov]

  • 13 Apr 2009 at 9:33 AM

Jake DeSantis Ruining F U Letters For All

By Bess Levin

Picture 1082.pngYou’ve just taken 5,000 words to tell your employer where he can shove it, on the pages of the New York Times no less. What do you do next? Keep working for him, of course. Thought Jake “Dear AIG, I Quit!” DeSantis had left the building? Think again! The Journal reports/reminds (for those of us who didn’t make it through the whole good-bye letter**) that the AIG-Financial Products executive vice president continues to toil away.
According to AIG-FP head Gerry Pasciucco, DeSantis is merely there “short term as the commodity business he works on is resolved,” and sure, he probably had some sort of a contract to uphold* but shouldn’t that have been thought out beforehand? You can’t be telling someone to go fuck him or herself, audibly announce for all to hear that you’re leaving and then add, “as soon as I finish my commitments.”
We’re not asking that you kick the water cooler over and burn the place down on your way out (we’re not not asking that either), but this sort of behavior is just completely unacceptable. Not necessarily because it makes you look like a pussy (though it does, and that should be considered) but because it threatens to ruin kiss off letters for the rest of us.
If you’re not comfortable going before the job is done (which, really, at this point, who cares, just go), then at least time the big speech to just after you’ve wrapped things up. Then grab your fish and whichever secretary will come with you and get the hell out of there.
*Like employerfather, like employeeson.
**Yes, in the (very last paragraph) of the letter, JD writes “I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer” but the sentiment remains, as does the self-righteous judgment emanating from the Dealbreaker office over DeSantis’ decision to leak the letter, and be complicit with the headline “I Quit” when that’s not exactly the case.

  • 13 Apr 2009 at 8:43 AM

Prison Prep: Shana Madoff Learning The (Soap On A) Ropes

By Bess Levin

Picture 1079.pngPeter’s wondering how he’ll survive on only $10,000 a month, Ruth’s jewelry shopping in Palm Beach and Andy and Mark Madoff are most likely off on a 6 month fishing trip funded by gal pal Bob Rubin, but at least one member of Ponzi Nation is facing facts. Shana Madoff, niece of Bernie and wife of former SEC employee Eric Swanson, has apparently started getting worried about the matter of having “signed a lot of documents” in her role as a Madoff Securities compliance officer, which may result in some orange jump suit time. Resourceful girl she is, Shanala’s enlisted the services of the highly recommended Larry Levine, founder of Wall Street Prison Consultants, which, for $850, gives white collar criminals a “wake-up call” on how to act behind bars and secure early releases. Shana is said to have enrolled in Fed101, a course that covers, among other things:
Picture 1081.png
(For our future WCC readers looking for something a little more in-depth, consider Incarceration Optimization, a 100-hour program that’ll set you back 20-large but’ll probably be money well spent).

  • 10 Apr 2009 at 11:25 AM
  • admin

Dealbreaker Seeks A New Writer (or Writers)

By Bess Levin

Back in October, we mentioned we were looking for an additional writer (or writers). In case you were wondering, we’ve not yet filled the position. Because Bess and Equity Private have been doing such an excellent job, we haven’t felt much pressure on this front. If it ain’t broke, don’t fix it.
But we are once again thinking of hiring more talent, given how the site is thriving (and how many Wall Streeters might be looking for new jobs right now). Would you be interested (or would you know anyone who might be)?
This is a full-time position, with standard benefits — health insurance, a 401(k), abuse from anonymous commenters. If you’re looking to transition from Wall Street to writing, this is an excellent opportunity.
If you’d like to apply for this position, please email us at jobs at dealbreaker dot com (subject line: “DealBreaker Writer Application”). Please describe yourself and your background, what you have to offer DealBreaker, and your vision for the site. Feel free to include a résumé, a writing sample, a link to your own blog (if you have one), or any other information relevant to evaluation of your application.
Thanks for your interest. We look forward to hearing from you.

  • 10 Apr 2009 at 11:00 AM

Opening/Closing/Holiday Bell: 04.10.09

By William Richards

Re: the optimized site. We removed auto detection of mobile devices (which was taking those of you viewing on a Blackberry or iPhone directly to the new version and not letting you go to the regular one), so if you want to view standard DB on your iPhone, going to www.dealbreaker.com will still take you there. If you’d like to view the optimized site, which looks better (loads easier, etc) on the Blackberry, go to http://m.dealbreaker.com/.
Goldman To Raise Capital Through Offering (WSJ)
You have to wonder if this is the Treas pulling something of a loan shark move, intent on getting the whole vig and not permitting early repayment. Or on the flip side, it could be a legitimate concern for the banks and having to come back with another bailout.
“The move, which could be announced as early as next week, comes as the firm prepares to report solid first-quarter earnings Tuesday. Goldman executives haven’t determined the exact size of the offering, but it is expected to be at least several billion dollars, these people say. They caution a final decision isn’t made, and will be based partly on market conditions.
In October, the Treasury Department forced the nation’s largest banks, including those that didn’t need additional capital, to take government funds. Goldman received $10 billion. The view was that infusing all banks with capital would help shore up the financial sector more quickly and avoid tarring some banks as weak”
An Ideological Perspective On Short Selling (FR)
Discuss:
“The tendency to demonize short sellers is part and parcel of a larger sickness in the market: the “ever up” philosophy that is linked at the hip with the misnomer that the retail investor is, de facto, entitled by right to 8% returns year after year. Notice, also, that no one seems in a hurry to ban the unpatriotic and evil “put option.” This, of course, is merely a matter of practicality, as the complexities of short selling and the specter of borrowing shares to accomplish it lends itself to criticism and anti-insider class warfare. Naked short selling is, of course, an issue, but not one that is even remotely managed by wholesale bans on the practice of short-selling.”
Barclays Dumps iShares, Picks Up $4.4B (NYT)
This looks more like an AIG spin-off (read: act of desperation) than a rational decision.
“The iShares business, based in San Francisco, has long been a jewel in the crown of Barclays Global Investors, the company’s asset management unit. The bank is financing the sale with a loan of about $3.1 billion and getting about $1 billion of equity in return. It is also banking on about $500 million in profit from the future earnings of the business, “if certain performance-related hurdles are met.”
It said it expected a net gain of about £1.5 billion, or $2.2 billion, which would lift its Tier 1 capital ratio, a measure of financial strength, to 7.2 percent, adding 0.54 percentage to the end-2008 level had the sale been applied last year. It will be required to book only a small fraction of the loans against its reserves.
Is Greed Overcoming Fear In The Stock Market? (Reuters)
Yes.
Reinforcements Sent To Pirates! (Bloomberg)
“Somali pirates are sending help to gang members who are holding a U.S. ship captain hostage, while the European Union increased air patrols over the Indian Ocean to counteract a recent spate of piracy attacks.
A U.S. destroyer is continuing to watch over the pirates, who had briefly hijacked the U.S.-flagged Maersk Alabama about 250 miles off the Somali coast.”
Why Dylan Ratigan Left CNBC (Clusterstock)
“A lot of things came together. One, it became apparent to me that there had been some major policy failures in America. While clearly pursuable at a place like CNBC, in my opinion, they are more broadly pursuable from a wide variety of other news platforms.”

Continue reading »

  • 09 Apr 2009 at 5:28 PM

Write-Offs: 04.09.09

By Bess Levin

$$$ Dealbreaker is now optimized for your Blackberry.
$$$ Layoffs games [The Deal]
$$$ Inside the CNBC WC [Clusterstock]
$$$ Summers: ‘free-fall’ ending [Breitbart]
$$$ We’re off tomorrow, save for a quick opening wrap. Enjoy the long weekend.

  • 09 Apr 2009 at 5:08 PM

You Knew It Was Coming

By Equity Private

State income tax hikes, of course.

The squeeze is especially severe in states hit hardest by the recession, such as Arizona, where sales-tax revenue has fallen by 10.5%, income-tax collections are down 15.7% this fiscal year, and the government faces a $3.4 billion budget gap next year. But such shortfalls are likely to be widespread; federal income-tax receipts from individuals have dropped more than 15% in the past six months, according to Congressional Budget Office estimates.

Brace yourselves. The lust for municipal spending is going to see no abatement, even while state and municipal pension funds are facing rather frightening unfunded obligations. One expects to see repeats of California’s recent “to the public” bond issuance- a trend that we see mirrored in the Administration’s hope that financial “Liberty Bonds” are the answer to toxic waste pits that pock the financial landscape at present.
Is debt the answer? It will have to be, because it really doesn’t look much like tax revenues are going to recover anytime soon (the Administration’s rosy economic projections notwithstanding). Does anyone else see some irony in the recursive folly of pitching to the public tax free bonds that will be funded by later tax hikes? Or is that just us?
What, exactly, is it going to take to slow down spending?
More States Look to Raise Taxes [The Wall Street Journal]

  • 09 Apr 2009 at 4:06 PM

The Obama Portfolio: Killin’ It

By Equity Private

“Skyrockets in flight! Afternoon delight!”
The Obama Portfolio (Since Inception): +21.30%
Earlier: The Obama Portfolio

  • 09 Apr 2009 at 3:15 PM

Fill Your Wells

By Equity Private

Is anyone else alarmed that Wells Fargo is up nearly 30% on “pre-earnings guidance?” The trouble, of course, with pre-earnings anything is that the devil is in the details. In keeping with our “it’s all a farce” theme today, we cannot help but wonder after the market that hops on so thin a promise with such enthusiasm. Certainly, there are no signs of the sort of capitulation that we expect will be required to really see “the bottom.” But, then, what do we know? We thought the First Analyst’s call was folly, before we saw the wide-ranging array of information distorting programs and regulations that would be fired off in support of the upward charge.
But Wells really does frighten us, as does the desperation of the market to seize on such news with such gusto. Are we just curmudgeons unpatriotically decrying the inevitability of the great reflation?
Wells Fargo Shares Skyrocket on Earnings Pre-Announcement [Dividend.com]
Update: Minutes later, the Journal has it: Is All Really Well for Wells? [The Wall Street Journal]

  • 09 Apr 2009 at 3:09 PM

Restrained Partying At The Griffin House Tonight

By Bess Levin

Picture 1077.pngVictory lap time for our favorite midwestern hedge fund. Citadel’s Kensington and Wellington funds were up 3 percent in March and 11 percent for the first quarter, performance that could be characterized as somewhat better than last year’s showing, when they lost 55 percent. So big chest-bumps for Ken all around, though, sadly, it’s not all good news emanating from Casa Griffin. The wife’s fund was apparently down five percent last month.

  • 09 Apr 2009 at 2:52 PM

Guess The Dow

By Equity Private

The market looks so whacky to us that we cannot resist. Another installment of Guess The Dow is at hand.
This time, a twist. Not only must you be the closest to the Dow’s close without going under (reverse Price Is Right rules) but you must include a reason (plausible or otherwise) for the index’s performance with your entry.
The wheel is closed to betting 10 minutes before the bell. In the event of a tie we will award to the earlier entry.
GO!
Update: 8083 makes undisputed Guess The Dow champion “guest” the winner with this entry: “8090 – free pretzel day at the AMEX.”