Listen people, I don’t want to hear any nonsense about how bad it is over here until you start hearing the suck that is Euroland. I mean seriously. (Yes, we are aware that we vacillate between Eurosuck and Eurorule at the whim of the gusty winds of the press- you must see our fickleness as satire to fully understand the veins of humor that run through our lean flesh).
The euro area is falling into such a deep hole that the recovery, when it eventually comes, will be a long, hard journey. Figures released on Friday May 15th showed that GDP in the 16-country currency zone fell by 2.5% in the first quarter, an annualised rate of some 10%, far worse than many analysts had feared. Germany, the largest economy in the group, fell even harder: its GDP shrank by 3.8% in the three months to March and has plunged by almost 7% since its recession began a year ago. Italy’s GDP fell by 2.4% in the quarter; Spain’s by 1.8%. The 1.2% fall in France, large by any normal standards, almost counts as a boom.
The euro-area economy is slumping faster than most had feared [The Economist]
Credit Suisse Group AG Chief Executive Officer Brady Dougan must pay a year’s worth of interest on a late $7.5 million payment he made to his ex-wife under their 2005 divorce agreement, a Connecticut appeals court ruled.
Dougan, 49, and Tomoko Hamada Dougan, 52, were divorced on June 17, 2005, under an agreement requiring him to pay $7.83 million within 30 days and another $7.5 million by June 16, 2006, according to an opinion released by the appellate panel yesterday in Hartford. Dougan made the second payment 12 days late, triggering a 10 percent interest payment provision.
Dougan “had use of $7.5 million for one year,” according to the majority opinion by Judge C. Ian McLachlan. The bank CEO “could have made that payment at the time of the judgment. Instead, the plaintiff, an investment banker,* had the use of the money with the knowledge that he would lose the benefit of no interest for that year if he failed to pay the defendant on time.”
Related: The Kind Of Perverse Genius Only The Swiss Could Develop
*Was this intended as a passive aggressive way of saying “he’s not stupid, he knows how this money shit works”? If so we likely.
Zero Hedge is onto a bit of bother over at Chez Simons. To wit:
Zero Hedge decided to investigate just what may have been so out of place in RenTec’s SEC Form ADV that it needed to amend it. To our amazement, we stumbled upon this very curious disclosure in RenTec’s Section 11.E, where to a question of:
Has any self-regulatory organization or commodities exchange ever: found you or any advisory affiliate to have been involved in a violation of its rules (other than a violation designated as a “minor rule violation” under a plan approved by the SEC)?
The answer is an emphatic Yes radio button.
Oh boy. That’s going to leave a mark.
Earlier: Live-Blogging The Renaissance RIEF Call
Dear Renaissance Investor
Is There More Than Meets The Eye At RenTec? [Zero Hedge]
Sort of! As you are likely aware, compensation at Bank of Amerillwide was drastically cut last year, to a bottle of Boone’s and one free pass to Angelo Mozilo’s favorite Mystic Tan (it’s got the hottest bulbs). This has been a source of anger for sales employees in Private Asset Management (most especially top earners, as commissions were put in a pool and split evenly, so that “if you made exceptional numbers or if you sucked you got the same bonus”). Apparently after a good deal of bitching and moaning about the situation, BAC decided to make those with “exceptional” numbers feel better about the matter of getting screwed with a little “ego boost.” VP’s became SVP’s and SVP’s MDs yesterday. However, management has apparently failed to inform the promotees as to whether or not the title changes come with a pay increase, or if they’re simply “a pat on the back to make us feel appreciated, which would’ve gone a lot further if it at least came with some freaking Spirit Points (though we all know that ain’t going to happen).”
Oh dear. What’s next?
I have an idea, how about you just nationalize the damn thing and stop pretending so as to avoid offended relatives of Ken Lewis? Can we finally dispense with the fiction that these are viable, private companies?
Federal officials have pressured Bank of America Corp. to revamp its board by bringing in directors with more banking experience, as regulators place the bank under increasingly heavy government scrutiny.
The move represents unusual influence by the federal government over the workings of a financial institution in which it doesn’t own a stake. It’s particularly significant because many of the bank’s woes stem from its purchase of Merrill Lynch & Co. — an acquisition that was completed after heavy prodding by federal regulators. The Merrill deliberations were the beginning of regulators’ deepening involvement in the Charlotte, N.C., lender’s day-to-day operations.
BofA Urged by Regulators to Revamp Board of Directors [The Wall Street Journal]
Oh my god please tell me this won’t affect the fishing gear. Take the houses, the cars, fuck it, take Ruth, but not the bait and tackle. Lock that shit up where it can’t found. The Post reports that Irving Picard, the trustee overseeing the liquidation of Madoff’s assets, is threatening to go there, i.e. the place where lawsuits are filed seeking to take Ruth and Andy and Mark’s stuff, which the haters claim was purchased with ill-gotten gains (even though Lady McMadoff and her spawn maintain they knew nothing).
Prosecutors have already identified more than $93 million worth of homes, boats, cars and even a Steinway piano belonging to Ruth Madoff, who has been slapped with a forfeiture notice.
The Post also learned that Bernie Madoff’s sons Andrew and Mark received loans totaling $30 million from their Dad since 2004 — another sum that could be destined for Picard’s pot.
“The fact that we have not yet brought a lawsuit against a member of the Madoff family does not mean that we will not,” said Picard, who has come under heavy fire for trying to claw back millions from innocent victims.
Earlier: Madoff Family’s Last Remaining Asset?
It has been quite puzzling that the Sterling and the bond market in the United Kingdom have not completely given way given the outlandish spending and painfully serious fiscal crisis on the big island. The Wall Street Journal’s Simon Nixon thinks he knows why.
The market has, according to the Journal, effectively concluded that Gordon Brown is finished and that a conservative government is around the corner. While MP expense scandal represents a large part of Nixon’s argument, the reality is that the conservative revival in the UK has far less to do with expensing call girls and the like (long a tradition in British politics) and far more to do with the outright raid of the Treasury.
Nixon opines on Gordon Brown’s impending loss to the Tory, Mr. Cameron, due by June, 2010:
That’s the most likely outcome, judging by opinion polls. And it helps that so far during the current scandal, Mr. Cameron has enhanced his authority, showing a keen appreciation of the febrile public mood and acting decisively against his own MPs to confront the worst abuses. But the process of purging the old system and restoring public confidence has only just begun. There could be more political battles to come.
And while money wrongly claimed has been repaid, those who claimed it remain in their jobs, their authority diminished. Support for fringe parties is on the rise, suggesting a backlash against mainstream politicians. Against this backdrop, the next government must persuade the public to accept savage public-spending cuts and painful tax hikes. The market is betting the political class can regain sufficient credibility to drive through this agenda. The stakes were high enough already.
One wonders what fate the market is pricing for Democrats.
U.K. Political Scandal Poses Economic Risk [The Wall Street Journal]
Simons Questioned by Investors: Disparity Is Seen in Running of Two Renaissance Funds
(WSJ)
Yes. We know!
My Personal Credit Crisis (NYT)
“If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the paper’s chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben S. Bernanke, at close range. I wrote several early-warning articles in 2004 about the spike in go-go mortgages. Before that, I had a hand in covering the Asian financial crisis of 1997, the Russia meltdown in 1998 and the dot-com collapse in 2000. I know a lot about the curveballs that the economy can throw at us.”
Barclays Global Investors For Sale (Reuters)
They’re looking for $10B in the sale of the company; rumor has it Blackrock is interested and Bloomberg seems to think BNY Mellon might be willing to put up the cash.
Six Insurers Named To Get Government Capital (NYT)
“The department said the Hartford Financial Services Group, Prudential Financial, Lincoln National, Allstate, Ameriprise and Principal Financial Group have all received approval for capital infusions, subject to terms still to be negotiated.”
Obama Still Pushing Against Credit Cards (NYT)
“As the Senate deliberated on legislation, Mr. Obama convened a town-hall-style meeting here led off by a woman who complained of being gouged by her credit card company. The president cited her story to make the case that banks and credit card companies have been taking advantage of loose rules to make money at the expense of hard-working Americans.”
GMAC Considering Name Change (WSJ)
I did this when I got out of prison, totally works.
“The company’s executives hope that the rebranding of GMAC Bank will spur retail deposit growth, a key funding source for GMAC amid the continuing credit squeeze. Aside from federal help, GMAC LLC, the lender affiliated with General Motors Corp., has few avenues to raise capital.”
Continue reading »
$$$ Charlie Gasparino: Who’s Going Down? [TDB]
$$$ A Tennis Gambler Looks For A Fix [WSJ]
$$$ Frank wants broad limits on exec. pay for all firms [The Hill]
$$$ “According to a well-received new book, The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art (Palgrave Macmillan, 2008), Cohen has underwritten a number of important offerings by Christie’s and probably some by Sotheby’s — the world’s two leading auction houses. It’s a lucrative gig for Cohen, according to the book, which reports that he charges fees as high as 10 percent of the guaranteed minimum price that an auction house puts on a collection.” [Alpha]
