At a decidedly more sober* annual shareholder meeting, John Mack told the audience that he’s seen an ‘exodus’ of ‘key people’ as a result of no longer being able to ply them with money in the manner they’ve become accustomed to.
*That or John Mack can just hold his liquor better than Ken Lewis.
Archive for April 2009
Is the SEC drowning in a wading pool of ignorance? Have no fear. The Commission is getting “…more smarter, more swifter, more successfuler….” at least if you believe Robert Khuzami, sometime federal prosecutor made SEC enforcement chief. It seems that the new focus over at the SEC will be to hire smart guys. Really smart guys. How smart? Have you ever heard of Plato, Aristotle, Socrates? Morons.
Khuzami took over Enforcement from Linda Thomsen, passer of the Ponzi buck, back in February, leaving precious few targets for ridicule at the Commission. Be this as it may, Khuzami is working hard to fill Thomsen’s shoes.
When asked if it was true that specialists and attorneys with high fees are easily bored, Khuzami revealed that “lawyers in a specialized group could be permitted to work on unrelated cases to maintain variety,” and that “It’s not about what’s broken.”
The good news is that Khuzami is due to testify before Congress next week. The sharpening of disemboweling cutlasses could be heard echoing throughout the Dirksen federal building over the last 48 hours.
SEC Plans Fraud Fight With Teams of Specialists [The Wall Street Journal]
Jigga what? Is Ken even trying to make his stories match up or just saying fuck it, let’s have some fun? We knew the Boone’s would be flowing freely today but we didn’t realize how hard and how early. This guy said it best: “Lewis is drunker than a Japanese Finance Minister right now.”
Update: Okay, this is even better than we could’ve imagined. Apparently after telling a shareholder that the bank’s decision on Merrill was “independent of any government threat,” he added, “you have your facts wrong.” You know, facts based on testimony Lewis gave to Andrew Cuomo. We will now be setting the under over on how long before someone holds up a picture of Hank Paulson and asks if Lewis recognizes him, to which Lewis will respond, “I’ve never seen that man in my life,” at two hours. And taking the under.
Earlier: Live-Blogging Bank Of America’s Annual Shareholder Meeting
As briefly mentioned yesterday, Oliver Stone has signed on to direct the Wall Street sequel, after previously bailing on the project (whose original title, Money Never Sleeps, has blissfully been shelved). That’s where the good news ends and the Shia LaBeouf begins. He’s currently in negotiations to “play a young Wall Street trader under Gekko’s spell– a somewhat updated version of the character Charlie Sheen played in the original film.” While we can see LaBeouf playing a 2009 version of the sniveling Seth Davis,* this just won’t do. Hopefully the talks will fall through and when that happens, we need to be prepared to offer a more suitable alternative. Who shall that be? Don’t be afraid to think outside the box. Once you’ve answered that, determine a working list of Wall Street “personalities” we’d like to make appearances as themselves. Jimmy Cayne– given. But what about Meredith Whitney? Jamie Dimon? Jim Chanos? Mark Haines? Let’s inject some authenticity up in this piece. Lastly, since it sounds like the script isn’t exactly finalized, what do we think of a storyline involving a burning passion between Erin Callan and David Einhorny, ignited over a balance sheet brawl?
*In a Boiler Room sequel no one’s announced plans to make.
After what’s felt like months of discussing whether or not Ken Lewis should be canned from Bank of America, shareholders are finally getting their big moment today, at the firm’s annual investor meeting. Things are scheduled to get going later this morning, but ahead of the main event, SEIU is reiterating its message to, among other things, throw 2008′s Banker of The Year out on his ass.* That truck’s been circling BAC’s corporate headquarters for the last hour.
*Meaning whether or not to re-elect Lewis to the board, but no one ever said they couldn’t see him out of the building Fresh Prince-style.
Citi Asks Permission To Pay Bonuses (WSJ)
The combination of pay caps and the full-sub role Citi has started to play is going to start pushing people towards the door; now that there are stable banks (and we can tell where they are) you’re going to see the decent groups seek to relocate. From a human capital perspective, Citi will start looking like the Treas before too long. Unless it can…pay bonuses (says Citi).
“Citigroup Inc., soon to be one-third owned by the U.S. government, is asking the Treasury for permission to pay special bonuses to many key employees, according to people familiar with the matter.
The request comes as Citigroup is grappling with broad government pay restrictions that could break apart its legendary energy-trading unit. People at that unit, Phibro, are threatening to leave because of pay caps tied to the U.S. bailout of Citigroup. Phibro has been the source of hundreds of millions of dollars in profits for the bank, and has paid out hefty compensation, including a roughly $100 million windfall last year for the unit’s leader, Andrew Hall.”
BP’s Quarterly Earnings Here;Shell’s Here (BBC/WSJ)
Both BP and Shell saw net profit drop by 62% in the most recent quarter, the obvious culprit being the price of oil.
Fed Seeks Capital For Six Banks (Bloomberg)
Obviously Citi and Bank of America, and MS thinks Regions, Sun Trust, and KeyCorp are solid contenders. And lucky number 6 is?
AIG Begs Executive To Reconsider Resignation To Avoid Default (FT)
“AIG has moved to stave off the risk of default on $234bn of derivatives by persuading a senior executive at its troubled financial products division to rescind his resignation and remain with the stricken insurer to unwind the complex trades.
AIG insiders said James Shephard, the deputy chief executive of Paris-based Banque AIG, had decided to stay on as the unit’s chief less than a month after resigning in the midst of the political furor over the insurer’s bonuses.”
Societe General Chairman Steps Down (WSJ)
“After facing repeated attacks, Societe GeneraleSA Chairman Daniel Bouton said Wednesday he will step down, ending more than 10 years at the helm of the French bank that was shaken by a €4.9 billion ($6.44 billion) trading scandal in 2008.”
$$$ Fox revives ‘Wall Street’ sequel: Oliver Stone back on board [LATimes]
$$$ Frank Sees Banks TARP – Free In A Year [Reuters]
$$$ S&P’s “Weakest Links” List Rises to Record 300 Companies [Research Recap]
$$$ Clarium Capital founder Peter Thiel: “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of “capitalist democracy” into an oxymoron.” [Cato Unbound via Gawker]
We tend to ignore highly volatile biotech stocks that bound off the walls and ceilings like a Happy Fun Ball on acid-laced meth, but Dendreon Corporation (DNDN) is a special case because it is such an obnoxious assassins tool for the elimination of careless shorts. (And we keep getting email tips). Short interest in Dendreon was upwards of 14 million shares on about 100 million outstanding. A very hard stock to borrow, as it happened, and susceptible to recall. But that was nothing compared to the announcement that it had fantastic results with:
…its pivotal Phase 3 IMPACT study of Provenge (suspiciously close to “revenge”) in men with advanced prostate cancer data. While the data is incomplete or non-statistical, Dendreon said that the IMPACT study met its primary endpoint of improving overall survival compared to a placebo control. Dendreon intends to file an amendment to its existing Biologic License Application (BLA) in the fourth quarter of this year to gain licensure of PROVENGE.
Being caught short was deadly for your position.
The market had been expecting an announcement within the year, and a competitor had (with the short squeeze fueling the surge). Also, a potential Provenge competitor was pulled from development late last year. Good news would be sticky.
Ouch.
Dendreon Plunge Baffles CEO as Cancer Drug Said to Prolong Life [Bloomberg]
The FBI got him in somewhere in Southern California, the Journal reports.
Earlier: How To Make People Suspect Your Business (And Life In General) Is A Sham
Additionally, Thain was also unaware of the fact that someone at Bank of America had leaked receipts from his interior decorating spree, which Gasparino also told him about. How did the pass off of information go down? Where did it go down? Was it arranged by a third party, taking place at the stroke of midnight in the alley behind Goldman? Did Gaspo tell Thain to “come alone”? Did CG bring a gun? Was there talk of a guy named Snakes? Did Chaz address Thain as “Johnny”? At any point during the conversation were threats made to “bust knee caps” or gifts of deadly deli meats alluded to? We like to think (and know in our hearts) all of the above happened, but the story JT and CG are going with is that the former Merrill CEO got the lowdown on his impending firing (and the Toilet-gate leak) while watching CNBC. Sayeth Gasparino:
As part of his makeover, Thain is also doing a lot of talking, giving a fulsome interview to the Wall Street Journal where we learned, among other salient facts, that he still puts on his suit and tie every morning even though he has no place to work and, oh yeah, he doesn’t like Ken Lewis. One interesting fact left out of the story: Thain, according to a spokesman, told the Journal that he didn’t know he was being fired by Lewis until he saw the news on CNBC being broken by yours truly.
Oh, but lest you think Chazpo can be bought by some well-placed flattery, think again!
I’m not taking sides. In fact as far as I’m concerned, watching these guys got at it is kind of like watching old World War II war footage of battles between Germans and Russians; you want them both to lose.
We wondered if Ken Lewis bothered to read the Material Adverse Change clause for the Merrill Merger very carefully. Either he did, and managed to pull off a fantastic bluff over Paulson’s head, or he paid as little attention as anyone else. We took a look at the details yesterday in: What Was Lewis Really Up To?
We aren’t the only ones to notice, it seems. The always interesting Credit Writedowns caught the story today: BofA’s MAC clause was as porous as swiss cheese quipping:
The latest news is stunning: Bank of America’s MAC clause could probably never have been invoked because it had a specific exclusion for the deteriorating prices of legacy assets on Merrill’s books.
Indeed.
