While Kenneth Feinberg tries to come up with some way to misrepresent a $100 million payout to a trader as egregious or unwarranted given the circumstances, it appears Washington isn’t taking any chances. With Citi starting to run low on pieces it can pawn to remain profitable quarter after quarter, the government’s adopted bank may have to look to DC to open its wallet to help pay up. This $100 million may not have been contemplated in the earlier series of Citi bailouts but a new government initiative curiously seeks to clear out just enough space to pay a certain energy trader.
The White House announced a list of 77 spending cuts as part of its “100 million savings challenge”. Thanks to such initiatives as agencies printing documents on both sides of the paper, cramming in more soldiers on certain flights, and disbanding the agency in charge of enforcing workplace regulation and workers’ rights rules (the Employment Standards Administration), it looks like enough pennies will be collected should Andrew Hall threaten Citi’s viability.
Archive for July 2009
If Irving Picard has anything to say about it. The trustee liquidating Ponzi Nation has filed suit against Bernie’s woman, seeking to claw back the $2.3 million she was left to live on, saying she was in on the whole thing. In related news, Lady MacMadoff, whose lawyers are calling the suit “totally unjustified” and “wrong as a matter of law,” was allegedly seen “tooling around in a white Mercedes SL 500 convertible” over the weekend in Lawrence, NY.
Update: Just messing about the $2.3– Picard wants $44.8 million.
Earlier: Ruth Madoff Spanish Harlem Bound?
Faced with mounting lawsuits, the government is taking a page out of the Russian model and putting the screws on mortgage lenders to pick up the modification pace. As we are way past the time when the likes of Citi and BAC should have be looking at things like a borrower’s ability to repay a loan, the White House figures it might as well get some political bonus points out of its stakes in firms that would have a tombstone next to Lehman’s were it not for the Washington safety net. Throwing caution to the wind, the administration’s bogey is for lenders to produce 500,000 trial loan modifications by November 1st- which will likely convert soon after into full-blown losses and pave the way for TARP version 2.0.
As you’re aware, the PR department over at 85 Broad has been working overtime to get people to stop talking trash about how the bank owns the government, would screw a hobo for a nickel, and could just generally buy your life. All of that is for the most part true, but the bad press is starting to grate, so attempts are being made to ingratiate the Masters of the Universe to the peasants like yourselves. Demonstrate that they’re just regular guys with regular problems. So even though, in reality, anyone with a GS ID could get any woman they want, they’ve started to do stuff like pay for sex, and troll for underage tail on the internet, like a common man/Citi employee:
A lawyer for Wall Street powerhouse Goldman Sachs was caught in a sting operation aimed at perverts who solicit young girls for sex, officials said Tuesday.
Todd Genger, 33, is accused of trying to lure an underage teen with explicit chat on the Internet and then traveling to Westchester to consummate the cyber-affair.
In reality, the “girl” Genger was chasing was an undercover investigator posing as a teen in the chat room, the Westchester County district attorney’s office said.
You could probably hear the thoughts going through the head of Goldman’s #1 groupie when she got wind of GS commodity index risk management head, Don Casturo’s, take on curbing speculation. A nice mixture of ‘see- I told you they were evil’, ‘why am I the only person who knows what’s up with those guys’ and ‘I really need to borrow that rat’ has probably been on constant repeat.
Casturo threw gallons of fuel onto Mad Max’s fire by telling the CFTC that curbing speculation could wind up doing more harm than good.
“Some of the courses of action that have been proposed not only will fail to address the perceived harms but also will have unintended consequences that may be disruptive to liquidity and the markets generally”
It looks like Lloyd & Co. are itching for a fight and that rat is going to be very busy in August,
Nomura Finding Lehman Employees To Be Extremely Difficult (Particularly Those Damn Women)
By Bess Levin
It’s been almost a year since Nomura acquired Lehman’s international operations, and while some fumbling and a lot “where does this go” among personnel on either side is to be expected, things remain quite awkward, with the children of Dick Fuld all but refusing to submit to their new employer’s way of doing things.
Like start the day in verse.
Lehman bankers encountered a different work culture at Nomura. One team of Nomura traders, for instance, sang a company song at morning meetings.
And be followed around by a guy with a notepad who doesn’t say much but constantly judges.
Nomura set up a transition team that fanned out around the globe to help with integration. Senior investment bankers from the Lehman side started to complain about their “shadows,” bankers from the Nomura side who would accompany them to client meetings and report back to other executives, according to Lehman-side bankers. The Nomura spokeswoman says those bankers were helping with the integration.
And just accept that women are there to serve, okay? Why is this a cause for getting one’s panties in a bunch?
Nomura kicked off a training session for new hires in April by separating the men and women. The women, including Harvard graduates hired by Lehman Brothers before it collapsed, were taught how to wear their hair, serve tea and choose their wardrobes according to the season, say executives who fielded a complaint about the session.
Asked about the training sessions for new hires, a Nomura spokeswoman said that both sexes were taught business etiquette, and the men and women were trained separately for logistical reasons.
It’s not like they’re being asked to slut it up. In fact, the females are being expressly told: do not dress like a harlot, or you’re out on your ass. This is a place of business. We can’t have bitches running wild.
And here’s what they’re doing about it! Setting up one of those giant inflatable rodents in front of 60 Wall Street this morning. No word if this is a union airing grievances (the rat-blocking-entrance is their calling card, though we’ve never seen one blinged out like this) or if the shareholder who got spied on is just blowing off some steam. If you passed by the thing this morning and took two to find out more, let us know.
Phibro Mum After White House Slams Reported $100 Million Payday (Reuters)
‘Cause there’s nothing to say. Just give Andrew Hall his bag of money, and nobody gets hurt.
Bernie: SEC Was Asleep (NYP)
Ponzi Boy cannot stress enough just how easy it was to pull this thing off.
Goldman Disputes ‘Evil’ Tag (NYP)
Here’s what the delightfully British Lucas van Praag had to say about this article: “garbled nonsense,” “shoddy journalism,” and “The mistakes are so egregious that one has to question Mr. Hagan’s motives.”
UBS Sued over 77-Year-Old Lady’s $26 Million Loss (AP)
Awkward: “Chan Wai-yee, who was born in mainland China, filed a lawsuit Tuesday saying UBS bankers never spelled out the risk and potential losses of investing in leveraged derivative products, known as accumulators, that bet on Hong Kong stocks.
Chan also says the bank led her to sign several documents in English — including one that made her a “professional investor” under local securities regulations — even though she doesn’t speak the language and never finished primary school.”
Inquiry Widens as UBS Client Pleads Guilty (NYT)
This is the thanks the Swiss get for such hard work and creativity? “Mr. Chernick’s private banker and a Swiss lawyer would dress as tourists when meeting Mr. Chernick at New York hotels, with the executive lying to customs officials by saying he was there to visit his brother. They mailed, rather than hand-carried, Mr. Chernick’s bank statements, for fear that customs officials would seize hard copies. They also cut out Mr. Chernick’s name and address from printed statements.”
A Comprehensive View On Bank Profits (WSJ)
The “secret” to Wells Fargo’s success: FASB.
Michael Milken’s New Business Advice Site (Bits)
Bizmore is only backed, and not edited, by Milken but that doesn’t mean he can’t pop in every now and then to dispense pearls of wisdom re: doing time.
Should You Invest In Mortgage-Backed Securities? (WSJ)
The BlackRock Legacy Securities Public-Private Trust says yes.
$$$ House Panel Approves Letting Regulators Ban Bonuses [Bloomberg]
$$$ Ex-Countrywide exec sows trouble, reaps profit [The Deal]
$$$ Bernanke Takes Hit On Investments [AP]
$$$ Touching Money Makes Pain Go Away [Cityfile]
Bernie has apparently been working out to make sure the sisters don’t have their way with him. In his first interview since he relocated from the UES to Butner, North Carolina, King Ponz told Joseph Cotchett, a San Francisco lawyer threatening to sue the other Madoffs currently running free, that he was astonished that he got away with his fraud for as long as he did even though “There were several times that I met with the SEC and thought ‘they got me”. While Cotchett was undoubtedly interested in Bernie’s thoughts on the nuances of his Ponzi scheme, he was truly mesmerized at the work Ponzarelli had done to his biceps and chest.
“He looked pretty good and seems to be working out,” said Cotchett. “He looked a lot better than he has in some months since I’ve seen photographs of him.”
As for the remaining Madoffs currently not behind bars, Bernie made it very clear which of them should be looking over their shoulder for the Feds.
“He cares about Ruth,” said Cotchett, “but he doesn’t give a —- about his two sons, Mark and Andrew.”
DB is hearing that an intern in the Natural Resources IB Group at JPM, having likely pulled consecutive all-nighters to complete a “Homework Project” that was in addition to the intern’s daily duties, collapsed into a seizure last week. We hope the intern in question is OK and are awaiting further details.
Update I: The intern is reportedly OK and has provided a good excuse for the House of Dimon to launch another investigation into the general work/life balance of summer neophytes. JPM will look to improve on their prior upgrades which included adding more healthy snacks in the vending machines- which were later removed because they posed a fire hazard.
Update II: The intern had apparently been working for 3 days straight before the convulsions began. Those not seizing were given last weekend off in light of their fallen comrade.
