And it’s not investor redemptions or cross-dressing lawsuits. It’s mother nature, and she’s pissed.
A fast-growing vine known as mile-a-minute weed, or the kudzu of the North, is stalking hedges, shrubs and trees in the town 27 miles (43 kilometers) north of New York City that is home to 60 fund companies. The plant advances as much as 6 inches (15 centimeters) a day and has a grip on National Audubon Society land and other patches, said Denise Savageau, Greenwich’s conservation director.
“Remember ‘Invasion of the Body Snatchers,’” said Tom Baptist, executive director of Audubon Connecticut, who found the creeping interloper at the group’s Gimbel Sanctuary in 1996. “This has a similar science fiction feeling, but it’s the attack of an alien plant. It usually kills what it covers.”
And a D for the matter of “missing the crisis altogether and downplaying its possible impact.” Dr. Doom also said today at the Reuters Investment Outlook Summit that “in addition to green shoots” and everyone at CNBC close your ears, “there are also yellow weeds.”
Having shown remarkable ineptitude for detecting fraud, the SEC is now taking heat from Pennsylvania Congressman Paul Kanjorski for its inability to do anything once it’s handed a case on a Harry Markopolos silver platter. Kanjorski is less than impressed that 6 months into the Bernie investigation, the SEC’s robust efforts have yielded a hefty one-page summary on the Ponzi King’s magic which was included in its March 31st semi-annual report. After prodding the SEC’s inspector general, H. David Kotz, yesterday for some details, Kanjoriski was undoubtedly relieved when Kotz responded that the Madoff reports were coming “very shortly”. Congressman, Again, Pushes S.E.C. for Madoff Report [Dealbook]
You know there are some vibrant green shoots when major credit card issuers are voluntarily taking 65% haircuts on some outstanding balances.
Consider Bedros Alikcioglu, a gas station owner in Newport Beach, Calif. He owed $112,000 on four cards and was paying $3,000 a month in interest and late fees. “It was so hard to earn that money, and paying it to nowhere didn’t make sense anymore,” said Mr. Alikcioglu, 75.
He signed up with a debt settlement company named Hope Financial, which negotiated deals with his creditors to settle for about 35 percent of his balance. Hope Financial is charging Mr. Alikcioglu about 12 percent of his original debt.
So banks with major consumer exposure are now faced with a rather peculiar situation. The overly leveraged consumer who is chronically delinquent now has leverage over the banks because it’s increasingly likely the value of that debt to the bank will be zero in the coming months. You don’t need the threat of cramdown legislation when things are this bad. Credit Bailout: Issuers Slashing Card Balances [NYT]
Have you been looking to sever all ties with your father? You’ve decided, for whatever reason,* that you’re just completely done with the prick, but instead of just calling him up, telling him off and slamming down the phone, you need something…bigger and so much worse? Consider letting Jim Cramer get the job done. He’s hosting a Father’s Day edition of Mad Money on Friday and wants you and Dad to join the live studio audience, or watch from home. Either way, we figure it’s the perfect gift for the son or daughter trying to express just how much “I hate you, you ruined my life!” to the old man. For his part, JC hopes “this special educates viewers and brings families closer together” which it might, in the same way the prisoners going through horrific torture tend to form close bonds. So, that’s something to consider. If you’ve got a more fool-proof gift idea that doesn’t comes with such risks, let us know at this time.
*Which you should feel free to get off your chest. Think of Dealbreaker as group therapy.
Because there are a gaggle of available ones as of yesterday. Up front, the catch is that you’ll have to work at UBS but it’s a small price to pay when you factor in the second to none tax advice you’ll be getting on the house. Apparently the Swiss bank’s global head of healthcare, Benjamin Lorello, was recently hired by Jefferies and somehow convinced most if not all of his team’s senior bankers to come with. Supposedly the junior bankers on the 36th floor of 299 Park were unaware they were being abandoned until yesterday, when none of their superiors showed up. So, that’s sad, in a three-legged dog with cancer way, but on the bright side, what with the absence of Lorello (he of “asses at desks by 9AM or I’ll make you wish you were never born” fame), everyone will be able to take the summer a little easier, and mosey on in whenever they want (assuming there aren’t any more cuts planned for the near future).
Related: Your Tardy Ass Will Not Be Tolerated At UBS–Fraud, Money Losing Begin Promptly At Nine A.M.
It seems small retail investors are still a glutton for punishment. A number of retail investors learned a harsh lesson last year when the convertible feature of their reverse convertible bonds kicked in and their high yielding bonds morphed into rapidly sinking equities. There are certain varieties of structured products that retail investors can take issue with because they weren’t fully aware of a seemingly minor structural mechanic that came back to bite them. This isn’t one of them. Even by retail investor standards, the key mechanic, the knock-in level, is spelled out clearly.
According to the results of our last survey, at least half of you should be nodding “yes.” For those checking the “hell no” box, consider yourselves lucky, although, completely objectively, the expression on these kids’ faces makes it look like they’re having a pretty good time, which can probably be attributed to DVDA activity going on inside their makeshift homes.
Two NYU grads and a pal who love living in the Big Apple but don’t want to pay its high rents are happy campers — each shells out $100 a month to pitch a tent in a friend’s Brooklyn back yard.
“We’re trying to make ends meet at a time when it’s hard to make ends meet,” said Louis Frank, 22, who set up his $169 waterproof, 4½-foot-by-9-foot tent on a wooden plank in the fenced-in Bushwick back yard on June 1.
Will Someone PLEASE Take Freddie Chief John Koskinen’s Job Off His Hands? (WSJ)
“Now, approaching his 70th birthday June 30, Mr. Koskinen has what may be his most thankless assignment: chairman as well as interim chief executive and finance chief of Freddie Mac, a big mortgage company on Treasury Department life support. Near the top of his to-do list is finding a new CEO and finance chief.” Cigarette Ban Being Implemented in Va. State Prisons (Washington Post)
Something to consider before doing anything illegal-ish, if living without your fix is out of the question. Credit Issuers Slashing Card Balances (NYT)
“Now it’s the card company calling you and saying, ‘Let’s talk turkey,’ ” said David Robertson, publisher of the credit industry journal The Nilson Report. US Likely To Lose AAA Rating (Reuters)
According to Robert Prechter. Obama’s Bank Revamp May Stall as Congress Tackles Rival Issues (Bloomberg)
“It seems like some of the fire in the discussions has gone out of it,” said Alex Pollock, a fellow at the American Enterprise Institute in Washington and former president of the Chicago Federal Home Loan Bank. “Regulatory reform is always a popular topic in the wake of a bubble and bust.” FAA Chief to Draft Tougher Rules to Alleviate Commuter Pilot Fatigue (WSJ)
That seems like a good idea.
Looking for the Little Guy in the Shotgun Union of Two Wall Street Giants (NYT)
In a preview for Frontline’s documentary on the Bank of America, Merrill Lynch deal, “Breaking The Bank,” Ken Lewis is described as “the most competitive person in the history of the United States, including the Union Army.” We also learn that he had to practice smiling and started wearing glasses to “soften” his image. According to Andrew Ross Sorkin, Lewis “wants to give the middle finger to Wall Street.”
A couple weeks after being laughed at by a room full of students at Peking University for his “Chinese assets are very safe” quip, Timmy did not take the bait this morning when he was asked the one question Barney Frank and Mad Max are dying to answer for him.
When asked if bankers care about anything other than compensation, Mr. Geithner said, “That is a very interesting question. I’m not going to answer that question. I think it is hard to judge motivation on these things.”
And it’s not investor redemptions or cross-dressing lawsuits. It’s mother nature, and she’s pissed.
