A hot steak tip, that is. Been searching high and low for a nice piece of meat on the cheap? Lady MacMadoff has apparently been telling Upper East Side passersby that Donohue’s on Lexington “has a great steak special on Thursdays.” Meaning she’s either angling for the soon-to-be vacant Frank Bruni job, or, and this is more likely, a waitressing gig.
Archive for May 2009
The Committee on Capital Markets Regulation reveals their world-changing recommendations in detail today. Damian Paletta has a preview on one of the Wall Street Journal blogs. The committee is “…an independent and nonpartisan 501(c)(3) research organization dedicated to improving the regulation of U.S. capital markets,” which exactly the kind of languages that makes us immediately suspicious. We are even more alarmed when it looks like L. Ron Hubbard managed to sneak into the meetings by shuffling the letters in his name. (Despite the fact that we are highly suspicious of Columbia, we’re sure he’s eminently qualified, but if he starts claiming to be the reincarnation of Cecil Rhodes or recruiting the “Commodore’s Messengers” we are going to get worried fast).
Likewise, we do sort of have to wonder about a financial system fix that includes the recommendation to “Ban or limit high-risk mortgages from being securitized.” Oh yes. Those pesky high-risk mortgages. Would those be from borrowers with FICO scores below X? (Maxine Waters will have a cerebral embolism when she sees the “discriminatory effect” that is likely to have on interest rates). Perhaps mortgages from specific geographic areas? (Oops).
We’ve got a special place in our hearts for George Soros, a roped-off VIP section, if you will, where we keep all of our favorite Budapest-born hedge fund managers. So we tend to give him the benefit of the doubt on most official business matters, but this we just don’t get. Jorge was recently spotted on a New York-bound Acela, which fits in nicely with the rich-guys-who-don’t-really-need-to-but-are-taking-the-train-anyway trend. Except for the fact that G.So, traveling solo, bought four first-class seats, and wouldn’t let anyone enter the Soros Zone, prompting some to wonder, why not just take a plane? Surely there’s a reasonable explanation, though one escapes us at the moment. Would he have taken a jet but, for whatever reason, wanted to avoid security (always a point in Amtrak’s favor), and need to stretch his shit out? Is this part of a monthly game he plays with himself wherein he buys a bunch of seats and rides up and down the Northeast Corridor offering them to ladies getting on at various stops along the way (assuming there’d be some tasty treats between Philly and NYC)? We’re thinking it’s most likely the latter, but feel free to offer alternative theories.
US Cracks Down On Corporate Bribes (WSJ)
“At least 120 companies are under investigation, according to Mark Mendelsohn, a deputy chief in the Justice Department division overseeing the prosecutions, up from 100 at the end of last year.”
Ackman Pledges To Hold Target Shares For Five Years (Dealbook)
That’s how much he loves this company.
Accounting Rules Help JP Turn WaMu Deal Into Money Maker (Bloomberg)
“Faced with the highest U.S. unemployment in 25 years and a surging foreclosure rate, the lenders are seizing on a four- year-old rule aimed at standardizing how they book acquired loans that have deteriorated in credit quality. By applying the measure to mortgages and commercial loans that lost value during the worst financial crisis since the Great Depression, the banks will wring revenue from the wreckage, said Robert Willens, a former Lehman Brothers Holdings Inc. executive who runs a tax and accounting consulting firm in New York.
“It will benefit these guys dramatically,” Willens said. “There’s a great chance they’ll be able to record very substantial gains going forward.”
How Satyam Supported PwC’s Schizophrenic Strategy To Reenter The Systems Integration Business (RTA)
“The firms may call these situations all anomalies, and “all in the past”, but they add up to real pathology – a case of incorrigible ingratitude for a government-sponsored, highly lucrative franchise to provide audit opinions for public companies.”
A Hedge Fund King Is Forced To Regroup (WSJ)
“Later that year, Mr. Asness frequently erupted in his office, smashing computer screens in anger, according to people familiar with the matter. Mr. Asness confirmed the account.”
$$$ Morgan Stanley Boosts Salaries As Its Bonuses Are Limited [WSJ]
$$$ “A woman who has fled New Zealand with her boyfriend after they received a multimillion dollar bank credit also has her daughter and sister with her, it was revealed today.
Police said today they were seeking a couple over the taking of $3.8 million mistakenly credited by Westpac to a bank account.” [NZHERALD]
$$$ Morgan Stanley taps UBS banker as prime-brokerage head [Wealth Report]
$$$ Richard Posner Defines Depression [The Deal]
$$$ “Beginning this weekend, Axe is trying to appeal to New York area pick-up artists with a new venture: it is sponsoring a Hamptons nightclub for the entire summer.” [NYT]
That’s it for us. We’re off Monday, but if you happen to come across Vikram Pandit pounding some Mike’s Hard Lemonades poolside, we want to know. Have a great weekend!
We cannot decide if we think it is good news or bad news that BankUnited seems to be proceeding as if nothing at all is fucked, even though it was “closed and sold” not 48 hours ago. Aren’t dramatic and painful changes supposed to follow hard-upon after such passings?
Florida-based BankUnited, which was closed by the U.S. government and sold to investors, was conducting business as usual on Friday and there was no sign of panic among customers, its new chief executive said.
Banking industry veteran John Kanas, who also took over as BankUnited Financial Corp chairman, told Reuters in an interview that BankUnited plans no immediate layoffs among its work force of 1,100 and expects to expand branches in its Miami base, while closing branches outside the city.
What is receivership coming to?
BankUnited sees Miami expansion, no layoffs [Bloomberg]
It seems The Big Picture beat us to it.
Not unless you start showing a little cleave, that is. Just days after “marketing” their 640 Park Avenue co-op for $32 million ($11 mill more than they paid for it two and half years ago), Dick and Kathy Fuld have decided to keep the 6,200 square foot pad for themselves. Will they be turning the apartment, which includes 5 five fireplaces and a 25 foot long dining room, into a halfway house for down on their luck CEOs? We’ll just have to wait and see. For those of you truly broken up at this turn of events, please note that while place is not for sale, you could probably get in the backdoor by applying for a position with the household staff, which, as indicated in the floor plan above, comes with room and board.
In related news, Joe Gregory has slashed the price of his 9,500 square foot Bridgehampton home by 14% to $27.9 million. It comes with 8 bedrooms, a pool, 200 feet of “ocean frontage,” and many, many memories. Act now.
Lehman Ex-President’s Cut [WSJ via Cityfile]
Kidding, but apparently Mikey-boy’s flick is going to be an absolutely side-splitting comedy. The documentary, which is slated for an October 2 release date, is being billed as “a comical look at the corporate and political shenanigans that culminated in what Moore has described as the biggest robbery in the history of this country,” which, in all seriousness, should be uproarious. We ourselves only recently stopped pissing our pants in laughter over the time Lehman Brothers put a bunch of worthless assets on its books and then got publicly dickslapped by a Jewish porn star. So you’ve got our $12.50 right here. Only problem is, this thing is apparently still untitled. Since you people sort of have the starring role, we figured you should do the honors. Any ideas?
It is, of course, the goal of everyone involved to shift businesses with large government stakes back into the private sector quickly. The question is, how do we define “quickly,” exactly. How about almost two decades?
GMAC LLC, which is giving the U.S. Treasury Department a 35.4 percent equity stake, said on Friday it might take 17 years for the government to shed its investment if the auto and mortgage lender were to go public.
The timetable suggests that federal involvement in GMAC’s affairs could persist long after troubles plaguing the economy and the auto industry end.
The reality is that if time lines like this are the only realistic alternative, we should consider another option:
Punt.
Directly related to this issue is a missive on credit penned by Megan McArdle recently. She closes with:
But maybe it’s worth remembering that the tyranny that credit scores exercise over our imagination have everything to do with the fact that we’ve built a society so utterly dependent on credit. If you didn’t need a credit card, an auto loan, and probably a mortgage to be considered middle class in this society, these opaque and unresponsive bureaus wouldn’t be the most important source of information about us.
Of course, we recognize that to save UAW jobs you have to save car companies and that means boosting car company revenue and that means getting consumers to buy more cars than the situation would generally warrant and that means providing them (all of them) with loads of cheap debt to finance their purchases and that means subsidizing loans and that means saving GMAC no matter what the cost and even if it takes 18 years, $750,000 per UAW job and hundreds of lives. We also recognize that this is supposed to be the brilliant “new way” to reform crony capitalism.
We repeat: Punt.
U.S. could take 17 years to exit GMAC after an IPO [Reuters]
That the United States would be more than fleetingly conflicted about the role of capitalism in saving capitalism might be surprising- in any other age. Today, we can only shake our heads watching the government publicly disembowel the “money men” before, nearly in the same breath, pleading with them to jump in and fulfill their traditional purpose: salvaging sinking institutions.
With bank failures at a 15-year high, private equity firms have been clamoring to buy the ailing institutions recently, but have run up against regulatory restrictions and public criticism.
But the F.D.I.C., which is expected to face further bank failures in the coming months, indicated that it might soon release policy guidelines for potential private equity investors seeking to buy failed banks.
“Due to the interest of private-equity firms in the purchase of depository institutions in receivership, the FDIC has been evaluating the appropriate terms for such investments,” the agency said Thursday. It added it would be giving guidance on eligibility and other conditions for private-equity investors in the near future.
Hypocrisy aside, we understand the urge to regulate… well… everything. But why look a cash-cow in the mouth? After the failure of BankUnited it is hard for us to imagine any roadblocks that make sense to erect. All we need now is for KKR to insist this “isn’t the business we are in,” right before closing deals on five failed banks.
F.D.I.C. to Issue Guidelines for P.E. Firms on Bank Deals [Dealbook]
