$$$ “A memo [prepared by the staffers for Republican lawmakers] said that Richmond Fed President Jeffrey Lacker wrote in a Dec. 20 e-mail that Bernanke intended to “make it even more clear that if they play that card and they need assistance, management is gone,” referring to a threat by Bank of America to break off its deal with Merrill.
That was a “gun placed to the head of Bank of America to go through with the merger,” the Republican memo said.” [Bloomberg]
$$$ Girlfight at Citigroup [Cityfile]
$$$ Hedge Fund AdultVest Unveils Free Porn Service [FINalternatives]
$$$ Happy 50th Birthday, Eliot Spitzer! Hooks are on us.
Archive for June 2009
If one of you had told me last year that the first harrowing tale I wrote about former Bear Stearns chairman Ace Greenberg and a dog wouldn’t be the last (Ace had seriously contemplated leaving BSC on account of depression stemming from his four-legged best friend not placing well in dog shows), I would’ve said, “Jimmy, please.” And right about now, I would’ve been eating those words.
The Post reports that Greenberg’s granddaughter, Allison Frey, pictured here, was struck in a hit and run last night, and despite fracturing both knees and requiring braces and crutches to walk, Little G is most upset about losing her papillon Maltese, Bagel, who ran off during the commotion.
“I don’t even care about my legs. I want my dog,” Allison told reporters. Despite having been flung onto the roof and rolled onto the ground by the cab that hit her on Park Avenue, the first thing she thought of after getting up off the street (“covered in blood from a blow to her head”) was “Where’s Bagel?” Sadly, no one knows, though perhaps someone should look into the fact that an older gentleman smoking a J was spotted lurking at the scene of the crime. There’s more, but I can hardly go on:
It is almost a foregone conclusion that the CMBS market is headed for some real pain over the next couple of years. The problem is so glaring that even the Treasury is aware of it and looking for ways to avoid a complete meltdown. A major issue confronting the market is the reluctance of CMBS servicers to even talk to investors or property owners before the underlying loans become delinquent due to tax considerations.
When CMBS offerings are created, the underlying mortgages are legally held by tax-free trusts. The trusts can be forced to pay taxes if the underlying loans are modified before they become delinquent, according to current CMBS rules.
The solution seems pretty clear- allow for loan modification while avoiding any negative tax consequences. But time is ticking and the Treasury’s record of avoiding major market meltdowns is disconcerting at best. Your move Timmy.
Relief for Commercial Real-Estate Debt? It Seems Possible [WSJ]
WSJ: “Bernanke and Fed officials sharply criticized Bank of America and CEO Ken Lewis in emails.”
By Bess LevinA few opening thoughts:
1) I’m sorry, did we expect that they were going to coddle the guy?
2) The Journal reports that the Fed’s top lawyer [noted] at one point that Mr. Lewis “can be reckless.” Code for drunk?
3) Please let the emails be released and please let some of the various subject lines read, “We will sic Angelo Mozilo on your ass if we have to. We’ve already bought his loyalty via Hollywood Tans coupons,” “We’ll send you home in a bodybag,” and “Do you like apples? Well we’re gonna shove a Boone’s bottle up your ass. How do you like them apples?”
“Last weekend my family sat down and we were watching the commercial movie “Titanic.” And as I was listening to Dr. Burgess from Texas talk about the debt and the burgeoning debt load that the United States takes, once the ice gash came in the side of the Titanic, which we all remember was called the “unsinkable Titanic,” we think of the United States. Nothing can possibly sink the United States. We will always be a superpower. But one thing that has kept us a superpower has been freedom, free market economists. We are in the process of watching the deconstruction of free market economists before our very eyes, something we have never seen. But as the ice ripped that hole in the Titanic, water started being taken on, and the engineer came out and brought the blueprint of the Titanic. Water came into the first chamber, spilled over to the second, spilled over to the third, and by the time it filled up so many chambers, it was over. It was impossible to resurrect that ship.”
Bachman Likens US To Titanic [Minnesota Independent]
SEC Email Scammer Says What Everyone Else Is Thinking, Albeit With Glaring Spelling Errors That Detract From Message
By Bess LevinIsn’t it awkward when seemingly insane people, or those without a firm grasp on the English language, or thirteen year-old kids pulling pranks, or, the worst of the worst, freaks on the internet, hack into your email and send out embarrassing messages to your boss, cc’ing your co-workers and a coupla news outlets…not because they make you and your organization look bad but because they’ve got a point?
An email sent under the name of a Securities and Exchange Commission enforcement attorney caused a commotion both at the SEC and outside it. The long message harshly criticized the agency’s chairman and inspector general.
The email, received by several SEC officials and several news organizations Tuesday morning, including The Wall Street Journal, said it came from Irene Gutierrez, a senior counsel in the agency’s Internet enforcement group.
The first was sent…with subject heading of ‘Report Card.’ Much of it encouraged SEC Chairman Mary Schapiro to remove the SEC’s inspector general [and began], “With the end of the school year upon us, it seem slike [sic] the appropriate time to grade your performnce [sic]….”
Turn it off. Kidding, though that’d probably work. Barry Ritholtz was recently asked what he’d do to fix “financial television.” As there seems to be one network in particular need of help, he’s addressed what the good people over in Englewood Cliffs can do to make themselves more watchable. A few pointers from BR:
1. Stop Yelling. Stop interrupting. Stop Talking Over Each Other: This is not Jerry Springer, its serious business. People’s retirement and investments are at stake. Please treat it that way.
5. Lose the Octobox. Fire whoever came up with the Decabox. ‘Nuff said.
7. Fact Check: An awful lot of things on air get stated with authority and confidence. Much of them are little more than junk or pop myths. Why is it that the more dubious a proposition is, the greater the confidence the speaker seems to muster? Consider fact checking as much of the statements that are made on air as possible, and making frequent corrections.
14. Stop the Bull/Bear Debate: This is a vast over-simplification of the market, and often does not serve the audience well. There are nuances and variables that get lost when you reduce everything to black and white.
15. Partisanship: Leave your personal politics at home. Viewers don’t care what most of you think.
We’re definitely in agreement with all of the above, though obviously the suggestions might be a tough sell, as they’re pretty much telling CNBC to not be “so CNBC.” Like point one– would you know it was CNBC if people weren’t yelling at each other, cutting each other off, or speaking in a pitch only dogs can hear? This is who they are, and if you were to ask network execs/talking heads, what do you think is your best attribute, they’d probably say, “our top notch ability to interrupt each other/our guests.” The biggest problem here is that CNBC actually thinks its viewers enjoy this shit, and are somehow fooled into believing it’s financial drama, which is why the the Call of the Wild segment was created.
It’s what the laymen might refer to as: ass-kissing. Or what the less dignified among us might refer to as: salad-tossing. Whatever you want to call it, Frank-y Boy ain’t falling for it. So you can wine him, dine him, send roses to his office by the dozen every hour on the hour and he’s still not going to just let you pay your senior executives whatever you fancy, or flit off on corporate retreats picked up by the taxpayer, or throw away all the regulation he wants to lay on your asses.
You can tell him how good he looks today, or how “slimming” that pinstripe suit is ’til you’re blue in the face. You can tell him how smart he is and how lucky we are to have such a brilliant guy like himself in charge during such dark days. You can get Vosges on the horn and literally turn his House office into a revolving door bacon bars, or grind them down and hook him up to an IV of the most delicious salty/sweet and he still won’t– actually, no, that would do it, though it’ll presumably cost you. For anyone (JPMorgan) searching in vain for BF’s g-spot, that was a free one. Aaron Elstein reports:
Just about everyone in banking wants to be Barney Frank’s friend nowadays.
Last week, 600 people, including executives from Goldman Sachs and J.P. Morgan Chase, filled the cavernous National Building Museum in Washington, D.C., for a $5,000-per-table tribute to the chairman of the House Financial Services Committee. He is marshaling legislation that promises to make Wall Street a more regulated and less prosperous place for years to come, and to hear it from some of the bankers at the event, they couldn’t be happier that a tough-talking, capital-L Liberal Democrat from Massachusetts is leading the charge to rewrite their futures.
It appears as though one great fraud deserves another. A group of Madoff victims is taking a page out of Bernie’s book and asking a federal bankruptcy judge to reconsider the way their losses are being calculated. Their magic formula is one part backward logic, one part betting that a judicial system that awarded damages to somebody who lost their psychic powers can get taken to the cleaners one more time.
The customers say that, by law, they should be given credit for the full value of the securities shown on the last account statements they received before Mr. Madoff’s arrest in mid-December, even though they were bogus and none of the trades were ever made. According to court filings, those account balances add up to more than $64 billion.
Papa Ponzi would be proud.
Victims of Madoff Seek Claims Overhaul [NYT]
Okay, but seriously: how can they do this to us?
HSBC Holdings Plc’s U.S. securities division will no longer extend structured financing to hedge-fund investors to leverage their investments, a person familiar with the company’s plans said.
Visit msnbc.com for Breaking News, World News, and News about the Economy
[via Clusterstock]
Most of you have probably noticed by this point that Rebecca Jarvis is sitting in Erin Burnett’s seat on Squawk Box this morning. Mark Haines opened the show by saying only that his main squeeze was off, but did not get into more detail, either because she left coldly in the middle of the night* without leaving a note, or because he needed the camera to cut away while he dealt with the tears. No matter. She’s been located. Burnett is moonlighting over on the Today Show where she’s had her hands full conducting interviews on a wide-range of topics including Susan Boyle and Jon & Kate. For those of you worried that she’ll get rusty when it comes to talking cash money, do not fear. Erin also spoke with the South Dakota rancher who won a $232 million Powerball jackpot. As for you, Mark, dry those eyes. While we did sense a little chemistry between EB and Matt Lauer, it was likely just for show (she’s a professional afterall). You know she’d never leave you for good.
*All CNBC co-hosts are required by contract to bunk together.
