There are many models by which one recovers from public disgrace (Milken comes to mind as an excellent example). Recovery from rank hypocrisy is (or at least should be) far more difficult. Unfortunately, Spitz is still at it:
In my last column, I wrote about how the New York Federal Reserve Bank, the most powerful financial institution in America after the national Fed, has been entirely dominated by Wall Street bankers, without any meaningful public input. In this column, I want to suggest how this governance crisis could be remedied.
Unfortunately, Spitzer has a riled and willing audience and he need only continue to intone barbed breathings about the evil of it all and his audience may well give him a pass on that whole slew of prostitutes thing. Sure, it is amusing to watch Slate capitalize on the detritus of Spitzer’s career. But that amusement will run thin quickly when Spitzer leverages it into his next slot- as you know he will.
How To Fix the New York Fed [Slate]
Kidding, but seriously, they sort of seem to be hinting at that. Every single profile you’ve ever read of the former Treasury Secretary, under contract, must include at least one graph mentioning the fact that Bald is big, tall, could palm a basketball, and intimidates the hell out of anyone within a 200 foot radius, a skill he was born with but honed as a lineman at Dartmouth. Seriously, he actually will kill you, or at least look at you in such a way that indicates bones have the potential to be broken if things don’t go his way (Ken Lewis knows what we’re talkin about). But no one to this point has gone so far to suggest that the brawn vastly dwarfs the brain, or that Bald came to run Goldman in spite of not having much going on up in that dome piece. Until now.
Paulson was known as “the Hammer” as a 6-foot-1, 200-pound tackle on the Dartmouth football team because he seemed to explode at the snap of the ball. Tenacity and drive, more than brainpower, have distinguished his career. He has been a champion arm-twister and shrewd enough: when he rescued Goldman’s IPO in the wake of the Russian financial crash in 1998 he made hundreds of millions for his partners and shortly thereafter became their leader. Yet Paulson can be oddly inarticulate for such a powerful man. He is not a Wall Street smoothie: no trophy wife (he remains married to his college sweetheart), and at Goldman he was known for wearing penny loafers, not handmade Italian shoes. He’s an avid bird watcher. A nonsmoking, nondrinking Christian Scientist, he did not head for the Hamptons on the weekend but visited his mother in Barrington, Ill. Yet, physically imposing, radiating a confident forcefulness, he came to stand for the dominating Goldman brand. In the Wall Street hierarchy, Goldman is the smartest and most confident of them all: the firm makes bets, but only ones it feels sure to win.
“I don’t think our government should set caps on compensation,” Geithner said in an appearance at the National Press Club today in Washington. Instead, the government should lay out constraints on the incentives provided by compensation plans, so that executives aren’t paid to take excessive short- term risk, he said.
You tell ‘em, Safecracker!
Geithner Says Government Shouldn’t Cap Executive Compensation [Bloomberg]
So far, nearly four months after the Obama administration took power, the Treasury Department is still without a deputy secretary. Two undersecretary positions — including the vital post overseeing domestic finance — have not been filled and many other division heads have not been named. The White House vetting of potential candidates has proven arduous, and nearly all of those individuals nominated have yet to win Senate confirmation and fill out Geithner’s team.
“I’ve seen the effect of this, and I wish he would move quicker to put in his own people,” said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
“Alternatively, please, by all means, move at a glacial pace,” Frank told T. Geith with his trademark snark and knack for quoting Anne Hathaway movies.
At Geithner’s Treasury, Key Decisions On Hold [Washington Post via Clusterstock]
How could we resist? A crazy day indeed.
You know the rules. Closest without going under. Bets closed 30 before the bell. In the event of the tie we take the earlier entry.
GO!
We loves us some Conrad Black. After all, when Judge Posner in the 7th quips that “The bulk of the evidence in the case has to do with pretty naked fraud,” you are facing pretty steep odds. Flirting with a pardon from George Bush only ups the ante. Alas, it was not to be.
But wait… a light in the distant darkness.
Some hope yet remains.
The U.S. Supreme Court said on Monday it would hear an appeal by former media baron Conrad Black and two ex-colleagues seeking to overturn their convictions for defrauding shareholders of one-time newspaper publishing giant Hollinger International Inc. Black, a Canadian-born member of Britain’s House of Lords, has been in prison since March 2008, when he began serving a 6 1/2-year sentence for fraud and obstructing justice.
Earning Cert was generally expected to be an impossibility for Black. This, we suspect, will be entertaining. (Think he will wear his robes?)
US court to hear ex-media baron Black’s appeal [Reuters]
Not sure how we missed this (actually, I am, we read the Vanity Fair article online and only flipped through the hard copy, filled with such gems, this weekend) but we couldn’t in good conscience not have a record of the above, and Ruth’s rack, after the jump.
Continue reading »
It seems our fondest wish has come true. It seems that everyone has finally stopped listening to anything Barney Frank says. How else could it be that after his most recent ruckus about extending compensation limits to all public companies we have this:
Wall Street expects the U.S. to loosen compensation caps for banks that received taxpayer aid, three months after Merrill Lynch & Co.’s $3.6 billion in bonuses drove Congress to impose them, according to executives at four of the country’s biggest financial firms.
Someone failed to get the memo, we think. The plan was to strengthen the grip, not loosen it.
Banker Pay May Escape Obama Caps as Wall Street Eyes Guidelines [Bloomberg]
Another round of layoffs is apparently expected at BlackRock this summer, though it’s unclear if the cuts will go down closer to June 21 or or post Fourth of July. Either way, something to think about! In other B-Rock news, the firm has apparently “done away with paper and plastic cups as part of an austerity program.” No word if employees will be getting BLK-branded mugs, a la Bank of Amerillwide.
Been dying to get into Club SAC Capital but were uncomfortable with the idea of parting with a sizable chunk of change for several years at a time? We come bearing exciting news. Our favorite Stamfordians are opening the fund June 1, with terms you might feel more comfortable getting behind. Here’s the deal: legacy fees (3 & 50), no side pocket for new investors, no fund level gate, 25% investor level gate, and, wait for it, quarterly liquidity with no lockup. Previously, admission to Club SAC came with a three-year initial hard lock, so I don’t think I have to tell you people, this is huge (even with the gate). But in case it didn’t penetrate, let me put it this way:
Quarterly. With. No. Lockup.
What else, what else. More capacity might be offered later in the year, which may or may not be an institutional class, most likely with a lower fee (probably 20%), maybe with a lockup. There is a possibility this will be with a pass through structure, which Steve-O has apparently been pushing for some time. Currently, the big boy takes an incentive fee at the fund level, and pays his cabal of (75ish) portfolio managers out of that, meaning he takes on the netting risk. If the fund loses money in a given year (like, for example: 2008), Stever has no incentive fee coming in and must pay the PMs who actually performed (the 2 of them…kidding! 3?) out of his own pocket. (And, actually, the pot of gold intended to go toward animals-in-formaldehyde is at risk even in up years, depending on the distribution of the returns.) So if the netting risk could be put on the investors, that’d be nice.
Continue reading »
We have to admit that we have found the voices insisting that Porsche, the large hedge fund with an interest in cars, was engaging in market manipulation rather squeaky and shrill sounding. True, the news that one hedge fund manager was said to be “in tears” (we are told that the rumor it was Larry Robbins is a “vicious lie”) when the squeeze hit caused much snickering around the Dealbreaker offices. Be this as it may, such calls are beginning to sound sympathetic as the process grinds ever on.
Volkswagen AG said Sunday it was indefinitely postponing talks over a planned integration with Porsche Automobil Holding SE, but the sports-car maker insisted that only the next round had been canceled.
As the power struggle between two of Germany’s leading auto companies appeared to increase, Volkswagen spokesman Peik von Bestenbostel told the Associated Press that the talks had been put on hold for an undetermined period of time, and urged a more direct engagement from Porsche.
“Before we can take up talks again, it is necessary that Porsche adopts a clearly constructive attitude toward them,” Mr. von Bestenbostel said.
But Porsche insisted in a statement Sunday that while a working-group meeting Monday on the fusion of the two car makers had been canceled, “The negotiations that were begun last week will continue as planned.”
“German Auto Firms Dispute How Long Integration Effort Will Be on Hold”?
Please, mommy, please, make it stop.
VW, Porsche Take Break in Talks [The Wall Street Journal]
