(With a delay so as not to get shot. Previously.)
- The first time I gave my real name and company. Oh, but they’re wise to my game, and after 5 minutes, an operator gets on and informs me that “Ms. Levin, the administrators have requested that you be disconnected from this call.”
- I can tell this is a job for an alter ego, Elizabeth Spring, and so I call back having been reincarnated thusly. I’m listening and taking notes for the famous British banking concern…BCSH.
- Dr. Jim Simons and Dr. David Lippy, senior researcher on RIEF in the hizzous.
- [I love this man] Simons: I’m going to start on background. And when I say “background,” I mean background. I’m going back thirty years.
Archive for May 2009
It’s new expense policy day at the House of Dimon! Among the cost-cutty measures:
* Car service only after 10PM (previously 9PM)
* “No lucites may be ordered for the J.P. Morgan deal team”
* “Corporate Messenger may be used only to deliver final versions of presentations which are for next day meetings. If Corporate Messenger cannot deliver within 2 hours, documents may be sent via taxi. Documents should not be sent via black car unless at personal expense”
* “Any JPMC owned technology which is lost or damaged must be replaced at the employee’s expense. This policy covers laptops, blackberry units, financial calculators, etc.”
* Seamless web orders shall not exceed $20 (down from $25)
And our personal favorite:
* Tips for meals or taxis should be “up to 15% and no higher”
From: IB Broadcast On Behalf Of Investment Bank Management Committee
Sent: Wednesday, May 13, 2009 10:15 AM
Subject: New global T&E policy for the Investment Bank
Message from Investment Bank Management Committee
J.P. Morgan is in an important position of relative strength, and it is essential that we stay in front of our clients and the markets to maintain the leadership positions we’ve worked hard to build. At the same time, we need to keep the cost of doing business in mind, particularly in the current environment. Across the Investment Bank, we are making good progress in our efforts to manage non-compensation related expenses. As we recently reported, first quarter expenses, excluding IC, were down 7% quarter-on-quarter.
Having said that, we think we can do even more to reduce costs related to Travel and Entertainment without affecting our ability to stay connected with clients and maintain appropriate internal business practices. T&E represents a meaningful portion of the IB’s overall expense base, and are also expenses that every employee can help us to better control. Our ability to manage T&E more effectively means we can cut less through other types of productivity initiatives.
Excerpts from the May letter (thanks to a disgruntled reader who would rather remain nameless):
The RIEF strategy’s preference for low volatility has been contrary to the voracious appetite for volatile stocks that has persisted for the past two months. This high volatility rally, which can hardly last forever, is at the root of our dismal performance.
I love the term “can hardly last forever.” It only needs to last two minutes longer than you can stay solvent, of course.
Of course it is precisely this predilection of RIEF that helped us avoid much of last year’s pain. While our recent reversal has erased a large fraction of last year’s relative gain, we are still ahead of the index, net of fees, by more than 9% on a 12-month rolling basis and 3.60% annualized since inception, each with a volatility roughly 60% that of the S&P*. We remain confident that RIEF’s portfolio will continue to provide higher long-term return and lower volatility than traditional long-only investing, while, at the same time, serving as an effective diversification for portfolios with large exposure to traditional long-only managers.
Translation: We were short vol. Sort of like LTCM, but not really.
We certainly understand our clients’ discomfort at having to withstand a performance onslaught during an extreme market rally, but we believe patience during this period will be soundly rewarded. In order to address your concerns we are scheduling a client conference call for RIEF investors next Wednesday, May 13th at 1:00pm EDT, where I, together with senior researcher David Lippe, will discuss performance and answer investor questions. Details for this conference call and playback instructions are available on our website: www.renfund.com.
Sincerely,
Jim Simons
So it was a scheduled call. Ah ha!
And the goods:
April / YTD
Series A:
Onshore: -9.38% / -17.31%
Offshore: -9.47% / -17.61%
Series B:
Onshore: -9.25% / -16.86%
Offshore: -9.35% / -17.17%
Series C:
Onshore: -8.64% / -16.95%
Offshore: -8.79% / -17.25%
Series D:
Onshore: -8.33% / -16.86%
Offshore: -8.51% / -17.17%
Returns are for continuing investors.
It’s Going To Be Delivered By Hank Greenberg and Ed McMahon On One Of Those Gigantic Publisher’s Clearing House Checks
By Bess LevinLiddy tells Congress: Bailout money will be repaid in 3-5 years, “if economy permits.”
Totally Unfounded Rumor Of The Day: Renaissance Emergency Investor Call At 1pm Today
By Equity Private
Uh oh. Can’t be that Jim Simons has bad news can it? We hate that sort of thing. (Sort of).
Update: The call is definitely a go. Emergency? Not so clear. Might actually have been pre-scheduled. Topic? Pure speculation. Double digit under-performance v. the S&P 500? Maybe. Ouch.
How can you resist a story with sub-billings like “Feng Shui Master v. Puppet Show”? I have no idea. Add a botched kidnapping, missing person, allegations of a faked death, secret love affairs (or not), multiple wills, around $4 billion in assets and you might see why the Wall Street Journal is so interested.
Sure, our wills, deaths (fake or real) and scandals are entertaining here in the West, but while we are stuck with poor rip-offs of DB Cooper, the East gets 60somethings with an Asian schoolgirl dress-up fetish, worth $4 billion+ and a penchant for sleeping (maybe) with bartenders feng shui masters after their late husband went man-overboard-missing during a botched kidnapping. Just try to tell us the East isn’t exotic.
…aside from her girlish get-ups, she was famous for successfully laying claim to the real-estate empire left by her late husband, Teddy Wang, who was kidnapped in 1990 and never heard from again — leaving behind two purported wills of his own.
Fleeing humble origins in mainland China a half-century ago, Teddy and Nina Wang became property moguls, building hundreds of apartment towers, shopping malls and offices across Hong Kong, including the recently completed 90-story Nina Tower. Forbes estimated Ms. Wang’s worth at $4.2 billion in 2007, though the true value of her estate isn’t publicly known.
After Ms. Wang’s death, the charity she helped establish was expected to take control of her fortune. At least, that’s what one of her purported wills, dated 2002, says. But Mr. Chan produced a second will, dated 2006, declaring him the sole heir.
His argument rests on the idea that he wasn’t merely Ms. Wang’s adviser on feng shui, a complex system of beliefs about the influence of stars, geography and the location of objects on people’s lives. He says he was Ms. Wang’s lover for 15 years.
Mr. Chan’s lawyer, Jonathan Midgley, has produced photos showing Mr. Chan cavorting with Ms. Wang. Mr. Chan frequently joined Ms. Wang for “midnight meetings,” Mr. Midgley says.
The Fight for Little Sweetie’s Billions Is Getting More Than a Little Weird [The Wall Street Journal]
Black Fortune 500 CEOs with a “babyface” appearance are more likely to lead companies with higher revenues and prestige than black CEOs who look more mature, an upcoming study says.
In contrast with research showing that white executives are hindered by babyface characteristics, a disarming appearance can help black CEOs by counteracting the stigma that black men are threatening, according to the study from Northwestern University’s Kellogg School of Management.
[...]
The results showed that black CEOs who rated high on the babyface scale worked for companies that ranked higher in the Fortune 500 and had higher annual revenues than blacks with more mature faces. The reverse was true for whites — the more babyfaced CEOs tended to work for companies that ranked lower and had less annual revenue.
The Safecracker is in your little banks, cracking your safes. That is, Tim “The Safecracker” Geithner has apparently greenlighted the stampede of smaller banks that heretofore have unfairly been unable to avail themselves of sufficient government scrutiny and micromanagement. The changes will allow smaller institutions significant access to performance excuses and shareholder sympathy come quarterly report time and provide significant political cover for dismal results and the departure of senior talent that was edging out the door already.
Banks with assets of less than $500 million will be able to apply for capital injections from the Treasury’s financial rescue package, Treasury Secretary Timothy Geithner told a gathering of community bankers on Wednesday. Treasury has roughly $109.6 billion in funds left in its bank bailout package. However, Geithner said he expects to use funds repaid from large investment banks, in part, to pay for the new capital injections for smaller public and private community banks.
Asked about the prospects of TARP involvement, one regional bank CEO quipped “Why should regulatory uncertainty, contempt of Congress and political risk be just for the big guys in New York?”
Geithner: Small banks can apply for TARP funds [Marketwatch]
Visit msnbc.com for Breaking News, World News, and News about the Economy
To the fact that the trillions of dollars we’ve spent fixing this thing? Would’ve been better spent on…you know. In addition to waffling on the matter of whether or not prostitution should be legal in an interview with Rachel Maddow last night, everyone’s favorite noted hooker fucker waxed disappointed on the the measures taken by the government thus far, and how they’re going to come back and pull an Ashley Dupré on us. Sayeth Spitz:
What is deeply problematic to me is…we have spent trillions of dollars and not nearly enough is changing. We are rebuilding the same edifice…we are reestablishing the primacy of the same companies, we are still building in a too-big-to-fail structure so that we as taxpayers will be guarantors of companies that when they get into trouble again, we will bail them out. None of this is being confronted by the administration as they, and we through our tax dollars, resuscitate a broken system.
Ness said he’d also appreicate it if someone would question Tim Geithner about why he’s in bed with Lloyd Blankfein, a matter Spitz will be taking on in an upcoming column for Slate.
When AIG was first bailed out, of the first tranche of 70 plus billion dollars, 12.9 billion went straight through to Goldman Sachs. Why? Why didn’t Tim Geithner asked Goldman Sachs, are you as the counterparty on these CDS, these swaps, do you need this money? What will happen if you don’t get it? Why did they get 100 cents on the dollar?
AIG Trustees Promise Swift Changes To Company’s Board, Looking To Replace Liddy (WSJ)
“At least five executives have been offered board seats, and candidates’ decisions are expected this week, people familiar with the matter said. They include Robert S. “Steve” Miller, Delphi Corp.’s executive chairman and former CEO; Douglas Steenland, former CEO of Northwest Airlines Corp.; Christopher Lynch, a retired KPMG partner; Harvey Golub, a former head of American Express Co.; and Arthur Martinez, who ran Sears, Roebuck & Co., now Sears Holdings Corp.”
Treasury To Announce Managers For PPIP (WSJ)
“The Treasury Department is expected to notify a group of asset managers Wednesday that they have been culled from the 104 that applied to oversee the first wave of Public-Private Investment Program funds.
The selected firms, widely expected to include megamanagers BlackRock Inc. and Allianz SE’s Pacific Investment Management Co., will then negotiate with the Treasury over the structure of their proposed funds before they are formally identified as qualified under PPIP. That announcement is expected in early June, according to a Treasury official.”
Ten Best Executive Perks (Non-Inclusive Of Illegal Shit) (MarketWatch)
“If Nabors Industries Chief Executive Eugene Isenberg died, became disabled or was terminated without cause at the end of 2007, the oil-services company would have paid more than $260 million in cash severance, according to its proxy filed in April 2008.
If Isenberg was let go because there was a change in control of the company, Nabors /quotes/comstock/13*!nbr/quotes/nls/nbr (NBR 17.53, +0.06, +0.34%) would have covered the tax on the severance and other payments for total gross-ups of more than $114 million, the proxy explained.”
And when I say bitches, I’m looking at all of you. Work for a bank that took a little bit of TARP money? Work for a bank that took a lot a bit of TARP money? Work for a bank that took no TARP money? Senior hire? Low man on totem pole? I’m calling the money shots on all your asses.
The Obama administration has begun serious talks about how it can change compensation practices across the financial-services industry, including at companies that did not receive federal bailout money, according to people familiar with the matter.
The initiative, which is in its early stages, is part of an ambitious and likely controversial effort to broadly address the way financial companies pay employees and executives, including an attempt to more closely align pay with long-term performance.
[...]
During a recent congressional hearing, Chairman Ben Bernanke said the Fed was working on rules that will “ask or tell banks to structure their compensation, not just at the very top level but down much further, in a way that is consistent with safety and soundness — which means that payments, bonuses and so on should be tied to performance and should not induce excessive risk.”
