Faced with declining tax revenues coming from the economic wreckage created by all those speculative bank bets, three states are turning to one-arm bandits to simultaneously bridge budget gaps and promote responsible personal spending. Illinois, Ohio, and Pennsylvania are crafting plans that would legalize and increase access to video poker and slot machines in order to fund things like higher education. If state lawmakers are openly advocating plans that seek to put their own constituents in more adverse financial situations by increasing access to the ultimate addictive substance, easy money, Wall Street’s ethical record over the past couple of years doesn’t look quite so bad.
Archive for July 2009
And that bump is the media, specifically the tabloid known as the New York Times, with its prying eyes, and cameras, and insistence on ruining something beautiful, just like it’s done to many a celebrity couple, and just like it’s threatening to do to this pair. You wouldn’t have thought they’d grow to be as close as they are today (or were), after Emanuel turned down a job offer from JD at Citi but against all odds they became the best of buds. Tight. Shoulders to cry on. Each other’s rocks when times got tough, such as when Dimon got fired, and Rahm-bo that pulled him out of the dark hour with a supportive phone call and a figurative/possibly literally squeeze. “He’s not afraid to express his opinions and I’m not afraid to express mine,” Rahm-bone (JD’s pet name) said recently. Now, comes word (from the publication that wink-winked previously that there was something against-god’s plan going on) that Emanuel has canceled on Jamie Dimon, who invited Obama’s chief of staff to a very special JPM board meeting, after promising he would be there, so as not to send the wrong message. And what would that be? That he’s embarrassed to let the world know this is real? This is how it starts.
Trish Regan is having twins! And yes, the offer we put out there for one of you to name and deliver them on set still stands.
Earlier: How Would You Feel About Dennis Kneale Being Your Child’s Godfather?
Man-Loving Jimmy Cayne’s Indimidation Of Opponents In Bathroom Metaphor Of Financial Crisis?
By Bess Levin
The latest issue of the New Yorker has an article by Malcolm Gladwell in which the author argues that it wasn’t a failure of the regulators to regulate that caused the crisis, and it wasn’t stupidity, it was the overconfident, too-cocky-for-their-own-good bankers who brought this thing to its knees. And speaking of cocks (actual and as a synonym for “asshole”), Gladwell identifies one banker in particular whose attitude, pre and post Apocalypse, is apparently emblematic of this particular brand of hubris– Jimmy Cayne. We already know that the stoner CEO, in a fit of rage over Tim Geithner opening the discount window after it was too late to save Bear’s trailer park of hemp, told William Cohan that TG was a glorified gay office clerk who “thinks he’s got a big dick,” and not an actual BSD like JC. He apparently also described at least one other so-called enemy in similar terms. This particular fellow was a man named Henry De Kwiatkowski, an investor who sued Bear Stearns in 1996 for negligence and a breach of fiduciary duty. A district court awarded De Kwiatkowski $164.5 million, but BSC appealed the ruling. The firm was ultimately successful, perhaps due to a baseless claim, or savvy lawyers, but here’s how JC’s drug addled brain remembers it going down:
“Their lead lawyer turned out to be about a 300-pound fag from Long Island…a really irritating guy who had cross-examined me and tried to kick the shit out of me in the lower court trial. Now when we walk into the courtroom for the appeal, they’re arguing another case and we have to wait until they’re finished. And I stopped this guy. I had to take a piss. I went into the bathroom to take a piss and came back and sat down. Then I see my blood enemy stand up and he’s going to the bathroom. So I wait till he passes and then I follow him in and it’s just he and I in the bathroom. And I said to him, ‘Today you’re going to get your ass kicked, big.’ He ran out of the room. He thought I might have wanted to start it right there and then.”
Gladwell could see Cayne giving this account prior to Bear biting the big one and it not being that big a deal but is totally beside himself over the notion that JC, after everything that’s happened, would have the audacity to be such an arrogant prick, in print no less. So it’s the ‘tude of people like Cayne, apparently, that got us into this mess this time and will get us into it again at some point in the future. True/false? And after you answer that, riddle me this: what is up with Jimmy Cayne describing every one of his opponents as a homosexual (not included in the piece: $2/share? “That Dimon prick’s some homo, I don’t care who’s polishing his knob.” Overcharging him for White Widow? “God damn fag dealers”)? And having keen interest in discussing their respective D’s, sometimes going as far as checking them out in the men’s room? And is it only a matter of time before his love letters with John Cheever are uncovered? And would any male ex-BSC’ers like to show us on the doll where JC touched you?
Larry Summers provided a “progress report” on how things have been going with the economy on Friday at the Peterson Institute for International Economics. We didn’t see the thing live and have yet to watch a clip, so it’s unclear if the following was delivered with one of Big Lar’s trademark curls of the lip that would indicate a joke or if he was dead serious here. We did however, just listen to an audio clip, and where the Economic Adviser/stand-up comic would normally pause for laughter from the audience, he continues on with nary a peep from those assembled at Caroline’s. So I guess…he was doing this straight?
“The anxiety stretched well into the mainstream. Take one example as an indicator: Google searches for the term “economic depression” were up fourfold from their pre-crisis levels,” Summers said. “Now, he says, such hits have returned to normal levels.”
Summers on the Economy, Recovery, Productivity and Unemployment [BW]
Related: ‘Dennis Kneale Idiot’ Google Searches Up Tenfold
We may actually have a group of people who are green with envy at the cushy situation the Madoff victims are currently in. After unleashing a plague of boy bands on the world, Lou Pearlman graduated to the equally objectionable business of running a $300 million Ponzi scheme. Now, the trustee in Pearlman’s bankruptcy is looking to hit up victims for some or all of their principal under clawback provisions. There is little doubt that there were some individuals who were in on Pearlman’s house of Ponz and withdrew their money before it came crashing down. But there will likely be at least a few people who are going to learn the hard way that in the post-Bernie world, the justice process operate in reverse when it comes to settling up Ponzi money.
As the lawyer for the trustee recently pointed out, those who may have been wrongly targeted in the clawback lawsuits should just relax since,”we’ve set forward a process for eligible defendants who can establish their good-faith defense”. Hopefully, for their sake, arguing that they experienced a brief moment of lucidity after realizing that the individual who introduced the era of processed, synthetic “music” was likely not an investing prodigy will be enough.
Naturally it’s not coming from Ruth, who will just not quit it with the endless refrains of “you ruined my life!” but instead Bernie-boy’s new family– his neighbors on the cell block. Seems they’ve really taken a shine to the Ponzier, with a few convicts telling the Post they downright dig him. Apparently some respect was earned prior to move-in day, on account of the fact that Mades pleaded guilty without ratting anyone out, that we know of. That shows loyalty, and counts for a lot in prison culture. Also, even though he knows he’s the shit, Bernie’s just been acting like one of the guys. “He’s a regular dude,” one convict said. “He’s a really good guy, he’s nice.” Hopefully B’s fellow criminals are openly expressing how they feel about him, since, although recently securing a gig engraving desk and door nameplates helped in the self-esteem department, he could still really use the confidence boost:
Every day’s a bad hair day for Bernie, who was shocked at seeing how much his hair had grown and how unkempt it has looked since he was incarcerated in March.
“When I finally looked in the mirror, I scared myself, because I haven’t seen myself in four months, and my hair was everywhere,” Madoff told fellow inmates last week.
James Dimon that is– and it’s not just the ladies. The government, the people, the press, the president– everyone wants to break themselves off a piece of that. While many, ourselves included, have been worshiping at the Church of JD for sometime now, mostly because there’s just something so right about the way he’ll cut people down with dismissive statements (Guy Moszkowski and Vikram Pandit know what we’re talking about) and because he is a regulation hottie, everyone is now taking a ride on the Dimon bandwagon.
At New York, Heidi Moore has anointed the CEO both a king and (Greek) God, noting that while four banks recorded profits in the multi-billions last week, the media quickly dismissed those Goldman (because GS is, according to some, spawn of Satan) and Citi/BofA (because, you know), throwing panties only in the direction of one: JPMorgan. Additionally, “Main Street” doesn’t want him dead, which is more than a few of his colleagues can say. Over at the Times, we’re told that Jamie has a direct line to Rahm Emanuel, and that the King is the only one on earth who can make Rahm-bo’s knees weak. Also, the Gray Lady takes pains to make sure we know that even though Goldman made more money than JPMorgan last quarter, Dimon is significantly taller than Lloyd Blankfein and as you ladies all know, height counts.
But maybe you’ve yet to be convinced J-Diz is something to get worked up over? Maybe you need a little more proof that it’s not just the press and the peasants who want somea that? Perhaps a celeb endorsement?
During one such meeting in late March, as Citigroup’s chairman, Richard D. Parsons, was trying to explain banks and lending, the president interrupted with a quip: “All right, I’ll talk to Jamie.”
Burn! It’s unfortunate, of course, that the anecdote had to involve a Citi official, since, let’s be honest, the explanation probably really didn’t make any sense at all and somehow involved Charleston Chews, and given the choice between getting a lesson in the money from someone who works at C and someone who works at JPM, you gotta go with the latter but the fact remains: suck it, Parsons et al. The Prez only has eyes for his boy (toy CEO).
Bondholders Plan CIT Rescue (WSJ)
An agreement was reached last night to secure $3 billion in 11th hour financing that will keep the lender out of bankruptcy court, Jamie Dimon and Lloyd Blankfein having apparently backed out after the vino wore off.
In Washington, One Bank Chief Still Holds Sway (NYT)
Jamie Dimon hosting a JPM board meeting in the District today with a special guest appearance by Rahm Emanuel, who JD reportedly “phones or e-mails at whim” to shoot the shit, mostly.
Cuomo Says Schwab Faces Fraud Suit (WSJ)
The Attorney General sent a note to Chuck on Friday putting it out there that his office has big plans to sue the online brokerage over sales of auction-rate securities due to a couple of emails among Schwab brokers indicating they had no idea what they were selling and then perhaps deliberately neglected to notify clients that the market was driving off a cliff and bursting into flames.
Charles Schwab Denies Cuomo’s Fraud Allegations (Reuters)
“The Attorney General’s allegations are without merit,” Schwab said in a statement on its website. “They unfairly lay blame on our company for an illiquid market and improper behavior by the large Wall Street firms that created and then, despite their obligations, stopped supporting Auction Rate Securities.” Ball back in Andy-boy’s court.
Delta Air Courts NYC Fliers ‘Nobody Owns’ With Yankees, Mojitos (Bloomberg)
In an attempt to dominate the JFK, LaGuardia, Newark Liberty scene Delta is trying to lure in drunks and A-Rod lovers.
Swiss Minister To Meet With Clinton Ahead of US Deadline (NYT)
Who has the upper hand here? Hil has a weakness, and can be seduced by, those jumbo-sized Toblerones, a case of which could be available, should the US drop this pesky tax business, but the Swiss are pussies and (probably) quaking in their boots thinking about coming face to face with the Big C.
RBS Loses 700 Top Traders (CNBC)
You’d think the honor of working for, with the possibility of a chance to meet, the Queen would be enough to make up for zero-ish dollar bonuses but apparently the firm’s top investment bankers are easily lured by other shops’ offer of a year’s salary in cash as a signing bonus.
$$$ A $10 billion Saudi fraud claim [The Economist]
$$$ Mark Cuban will not be commenting on the dropped charges but damn it feels good to be able to get to what really matters: training for the next season of Dancing With The Stars. [MC's Twitter]
$$$ Buy Ralph Cioffi’s Southampton house [Cityfile]
$$$ Interview with Barney Frank on his plan to legalize pot [Boing Boing]
$$$ Job of the Week: Morgan Stanley needs an investment bank executive director. You. [DB Career Center]
$$$ Goldman makes peace with GoldmanSachs666 blogger in trademark case [Reuters]
$$$ Ex-Merrill Lynch Employee Now Competitive Yo-Yo-er [WSJ]
As Jamie Dimon’s dinner date decides what role his firm will have in the CIT saga, hopefully Lloyd Blankfein will take Jon Stewart’s words to heart and consider that a lot more is on the line than just saving CIT.
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