This must be surtax appreciation week in DC. On the heels of the recession busting proposed surtax on high income earners to fund healthcare “reform”, the SheBair is set to push for new fees for bank holding companies that engage in prop trading and pretty much everything else that doesn’t qualify as traditional lending. To the extent these fees are severe enough and firms scale down or close down targeted areas, the FDIC may wind up actually adding risk to the banking system through the creation of a nation of less diverse, average-sized banks. Between potentially paying an addition 5%+ in taxes and worrying about whether your employer is willing to go along with the FDIC’s pay-to-play proposal, it has been a rough week for 7-figure club members working on prop desks.
Bair, Bernanke Want Tougher Curbs on Biggest Banks [Bloomberg]
Archive for July 2009
Hank Paulson: “Yadda, Yadda, Yadda, I Said I’d Break His Legs. To Answer Your Question.”
By Bess LevinThe Journal has published Hank Paulson’s prepared testimony for tomorrow’s hearing on the Hill. Apparently Bald is going to ramble on for about four pages until he finally gets to the following. Basically, what it comes down to is whether or not my definition of ‘appropriate’ is the same as yours. I think it’s appropriate to waterboard a CEO with his drink of choice, Strawberry Hill, until he agrees to do exactly as we say. If you don’t, I guess you’d characterize what I did as ‘inappropriate,’ which is your prerogative.
Bloomberg reports that the Credit Suisse broker who took off in May (though it took officials until June to notice he was missing) has been apprehended and charged with fraud vis-a-vis selling clients subprime mortgages linked to auction-rate securities. In other white collar criminal’s on the run news, our favorite fugitive, Bayou manager Sam Israel, has had another two years tacked onto his sentence for what a judge called “thumbing his nose at the system” when he faked his suicide and took off, because apparently we don’t reward imagination and creativity up in this piece. For his part, Sammy said that when he was first told he was going to be locked up he made the decision to bail because, “I had trouble accepting the idea that I was spending the rest of my life in prison.”
We are now one step closer to hearing Ralph Cioffi swear that he will tell the truth, the whole truth, and nothing but the truth. Cioffi lost his bid to dismiss insider trader charges after he failed to convince a judge that he had no fiduciary duty to clients when he allegedly cashed out of funds he managed using non-public information before one of them collapsed. Ralphie ran away with $2 million from the subprime-laden Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd and Bear Stearns High- Grade Structured Credit Strategies Master Fund Ltd back in 2007 before other investors learned the hard way that CDOs packed with the loans of people who didn’t understand what the term repayment meant aren’t always a safe bet.
I don’t think we have to tell you this, but there are some hedge fund managers whose cheeks we just want to pinch. Noted porn star David Einhorny is one of them. Greenlight Capital LP, Greenlight Capital Qualified LP, and Greenlight Capital Offshore have earned 21.5%, 19.7%, and 17.3%, year to date respectively, and while some guys would writing investors to suggest they “suck on this prestige,” the Green Lantern is saying, no, no, please, we are not the BSDs our power rings might indicate. Such modesty! Doesn’t it just make you want to squeeze the li’l guy? Of course, he included printable 8×11′s of the glamour shot at left, but he’s only human, and it was the best day.
Full letter below.
Prison Expert: Madoff’s Fellow Inmates Are Probably Going To Rile Him Up With Trash Talk About Ruth’s Rockin’ Ass
By Bess Levin
The Journal talked to prison expert Steven Oberfest, a partner with PrisonCoach.com, yesterday about what Bernie Madoff’s time behind bars will be like. Not good, according to Stevie-boy, who says he doesn’t see the noted Ponzier “functioning well there.” What Oberfest is most worried about is the fact that unlike less famous criminals, everybody on the inside knows who Bernie is, what he’s done, and intimate details about his life and his family, thanks to many, many media reports. Particularly troublesome to Steve-O is that Berns’s wife has been written about almost as much as her husband, and the fact that she is one hot piece of ass.
Encouraging signs for UBS have been hard to come by in recent memory. Having lost money, people, and lawsuits with reckless abandon, the firm finally received one piece of good news. French money manager Oddo & Cie will be repaying approximately $42 million to UBS after a Luxembourg court reversed an earlier ruling in favor of the money manager. Oddo argued that UBS’s role as custodian removed any responsiblity stemming from the French firm’s decision to park client money in a fund that invested close to 100% of its money with Bernie Ponzarelli. Leave it to a highly scrutinized tax haven to decide that “serious doubts remain” over the claim that a custodian bank should pay up for someone else’s greed.
Ahead of tomorrow’s hearing on the hill, re: did Paulson, alone or with Bernanke, threaten to kill or at least just have Ken Lewis fired, CNBC reports that the former Treasury Secretary is saying “Bernanke did not direct a warning to BofA management” and that they were “never close” to removing Ken Lewis and his friends. Because it never would’ve come to that! You think after receiving a threat of professional/bodily harm from a man who could palm a basketball you’re gonna pull any funny stuff? Don’t even. Next question.
Bank of America “Accidentally” Charges Man 23 Quadrillion Dollars For Pack Of Cigarettes
By Bess Levin
And while he claims to have quit, I think we all know who to place at the scene of this crime (he uses aliases of various RIEF investors when purchasing smokes).
A New Hampshire man says he swiped his debit card at a gas station to buy a pack of cigarettes and was charged over 23 quadrillion dollars.
Josh Muszynski (Moo-SIN’-ski) checked his account online a few hours later and saw the 17-digit number — a stunning $23,148,855,308,184,500 (twenty-three quadrillion, one hundred forty-eight trillion, eight hundred fifty-five billion, three hundred eight million, one hundred eighty-four thousand, five hundred dollars).
Muszynski says he spent two hours on the phone with Bank of America trying to sort out the string of numbers and the $15 overdraft fee.
A few weeks ago, while guesting on CNBC-Englewood Cliffs, CNBC-Asia’s Amanda Drury displayed an aggressive amount of cleave. So much so that it had to be noted. She went home after that and we decided we were going to initiate a new daily feature called “Today in Amanda Drury Cleave,” since the wardrobe department was clearly dressing her to meet a request filed by you people, and because sometimes we need easy, breast-y posts and we can’t always make them about Mark Haines. I don’t know if Drures was embarrassed by the attention, or if network censors deemed the cut of her shirt to be inappropriate but since that day, she’s been buttoned up to the extreme. I know this because every single morning I have dutifully gone through CNBC Asia clips featuring AD, on mute of course, looking for signs of cleave. Nothing. Nada. Yesterday, and this is not an exaggeration, she might as well have been wearing a loose fitting turtleneck. But then! This morning, a sign of life:
[click to enlarge]
Drury is scheduled to be back in Englewood Cliffs for two weeks in August. It’s unclear if today was indication she’s gearing herself and the Druries back up for battle; while it’s nothing like the effort put forth on D-Day, from your lips to D’s D’s, it’s a welcome start.
Former oilman and current amateur wind farmer T. Boone Pickens has graduated from losing investor money legally to flat out theft. In his younger years, and sensing his own greatness, TBP liked to do things like signing his name in wet concrete on his grandmother’s driveway. Now, like most sane 81-year olds, TBP is going from driveway to driveway reclaiming his early artistic works in concrete for nostalgia’s sake.
It turns out several weeks ago three little gnomes showed up at grandma Pickens’ place armed with cement saws and pry bars and removed the 3×5 section of the driveway with the signature. With the stolen driveway firmly in hand, a TBP spokesman calmly explained why the billionaire has turned into the repo man in his old hood.
“He carved his name in that cement 70 years ago, in his grandmother’s driveway,” the statement said. “It means a lot to him, and is now with his childhood home which has been carefully restored and relocated to his ranch in the Texas Panhandle to help commemorate his Oklahoma roots.”
Now when he breaks his gaze from the colony of windmills that will define his current legacy and looks down to the ground, he’ll be reminded of exactly who to blame.
Homeowner wants oilman Pickens charged with theft [Washington Post]
