Ambac may have just suffered the ultimate humiliation- being told by a rating agency that their business model is completely broken and they have no real prospects going forward. The bond insurer’s shame spiral began last week when it couldn’t raise enough capital to launch a new muni unit and has now graduated to a eulogy from S&P.
“Loss reserving increases have depleted surplus, boosting the likelihood of regulatory intervention, and we believe Ambac’s prospects for writing new business are negligible,”
S&P cuts Ambac rating, says “effectively in runoff” [Reuters]
Allegations that had been made prior to this afternoon: Bernanke and the Fed told Ken Lewis to keep Merrill’s losses in the lock-box or KL would lose his job/kidneys. Now, courtesy of Represenative Darrell Issa, we’ve got the exact same allegations, but with sinister turns of phrase like “inappropriate threats” and “cover-up.” He didn’t say anything further because, as we hope Bernanke will tell him in this voice tomorrow, “you got nothing.”
Not sure why, but Steve Liesman, looking quite flustered and as though he was about to cry, read us a statement out of the Fed from April that said it/Bernanke acted with the “highest integrity” when it came to the BAC/MER deal. Don’t worry, Liesy-girl, Benji’s got this one.
And speaking of jobs, not of the smear but blow variety, Governor Sanford apparently got himself a few from his “dear friend” while in Argentina. Now get back to work.
After happily watching Lehman free fall into bankruptcy and cherry picking the remains, Barclays is now on the hot seat for screwing Lehman a second time by overstating the liabilities it was assuming and later booking a $4 billion gain. Barclays capitalized on the fact that, unlike Lehman, it was not in bankruptcy and still had shareholders to answer to when it estimated the liabilities associated with acquiring Lehman’s investment banking and capital markets units. But a US bankruptcy judge has now ruled that Lehman gets to take a look at Barclays’ math to determine if things like accrued bonuses were ever paid out or simply pocketed.
Lehman Wins Right to Probe Barclays on Alleged Profit [Bloomberg]
So, former Fortress PMs Philippe Peress and Jonathan Ratcliffe are apparently starting a hedge fund, scheduled to launch sometime between July and August. Can’t say we’re particularly interested, given that our money is already locked up in Ball Gag Capital, but perhaps one or two of you might be? As of mid-June only $50 mill had been raised, so it’d be nice if someone would fork over a little cash. If you need convincing, the marketing materials, which were dropped outside our door in an envelope marked only “Dealbreaker” sans address about ten minutes ago,* can be found after the jump.
*Guessing the cloak and dagger nature of it all had something to do with the issue of the SEC frowning upon this sort of thing but for future reference to any of you budding managers looking to have DB disseminate your business, know that we don’t bite unless expressly asked to do so and have no problem going to jail for our sources.
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The CMBS lawyers involved with the Extended Stay bankruptcy must be having a field day with the tightrope walking real estate investor David Lichtenstein is doing to save his skin. Under a proposed bankruptcy restructuring plan, Extended Stay would see $4.8 billion in debt wiped out and Lichtenstein would be indemnified from $100 million in bad boy payments. While the plan has gained support from senior CMBS bondholders including Cerberus and Centerbridge, junior bondholders such as Five Mile Capital Partners are having no part of this and suing.
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We’ve received a bunch of emails from people who cannot wrap their minds around the fact that we’ve yet to put up any analyst bonus rumors. We think at this time such talk would be premature but for anyone just dying to wildly speculate, please use this as a forum for such chatter and fire away. For those of you unsure of what you might be taking home but dying to get in on the conversation, we suggest taking what you made last year, dividing by 1,000 and adding some salty tears, unless you happen to be typing from a handheld at 85 Broad, in which case, get ready for some sticky fifties, despite Lloyd’s claims that they won’t know what’s what ’til December. Have at it.
The SEC is using Twitter to come back from behind and now, apparently, traders are using the social networking site to get ahead and make make money money take take money money on rumors about Jon & Kate and other info you can’t wait to hear from slow as fuck newswires.
Traders are using software developed by US-based technology StreamBase to monitor “tweets” for price sensitive information.
The software plugs into Algorithm-based automated trading platforms that have been used by traders for years. But rather than searching Reuters or Bloomberg the software now scans Twitter.com.
Streambase – whose client base includes Royal Bank of Canada and London-based hedge fund BlueCrest Capital Management – was commissioned to develop the software by several “unnamed” clients.
It remains to be seen whether or not they’ll actually make (or lose) any clams on it but it seems at least a few big guys are thinking twats might be the ticket to some big pay days. So far, though, they’re just using it for fun.
kengriffin: K&W up 7% MTD, so f’ing back, baby!
stevieboyc: @kengriffin congrats wonderboy, only 3 yrs to go ’til the HWM
Related: SEC To Make Up For Completely F*cking Up By Joining Twitter
As previously noted, “massive” layoffs affecting equities at all levels went down at Barclays yesterday, and, supposedly, the cuts will continue until next Friday and be “rather substantial.” Some of you wondered what the deal with that was, as it seems like this is the 10th round of axings at the bank. The answer is simple: the Brits needed to free up some cash to have a subway stop named after them, which has always been a dream of Bob Diamond. If all goes according to plan, in exchange for $4 million, the Atlantic Avenue, Pacific Street and Flatbush Avenue station in downtown Brooklyn will bear the Barclays name, sort of, though not exclusively. It will be called the Barclays’ Atlantic-Pacific (having the thing all to themselves would’ve cost extra). Since the Brits are obviously creating a hot new trend in which banks will scramble to have their name stamped on not very desirable MTA stops, where might we suggest Citi stick Vikram’s face? And where would Bank of America feel most at home? Think about this long and hard as some of you, in lieu of being canned, will be redeployed to your firm’s choice of platform to dance for cash.
EnTrust Capital Inc., a hedge fund firm that’s handled New York Attorney General Andrew Cuomo’s personal and campaign money, received state pension funds to invest from a company he has identified as paying possible illegal kickbacks.
The investment presents a potential conflict of interest for Cuomo, legal ethics experts said.
Cuomo’s Money Manager Received Funds Linked To Pension Scandal [Bloomberg]
A group of German senior citizens recently decided to forgo the legal process and deal with their investment losses the old fashioned way- vigilante justice. The silver haired bunch jumped their financial advisor as he was entering the door to his house, bound him with masking tape, thew him into the back of an Audi, drove him to one of the couples’ vacation homes and had their way with him in the cellar for four days. It took 40 members of the German counter-terrorism unit to get the active seniors to free their prisoner.
German Senior Citizens ‘Kidnap, Torture’ Advisor [CNBC]
Citi’s correspondent lending division, which produced $58.5 billion in mortgages last year and probably had a hand in the $28 billion in losses last year, recently sent out a letter to clients notifying them that the unit is shutting down their well oiled machine for two weeks to look into some mortgage applications that didn’t meet their lofty quality control standards.
According to the June 22 letter, the review identified “valuation concerns” where “appraisal documentation is missing or incomplete,” or where property-assessment methods were “insufficient/lacking.”
Other missing information included employment confirmations, phone numbers, credit reports and rent verification, the letter said. The review also found “income calculation errors.”
Citigroup Halts Some Mortgage Applications, Cites Missing Data [Bloomberg]
