$$$ Allen Stanford To Undergo Heart Tests [Reuters]
$$$ Chris Flowers: Checkmate For A Wall Street Wizard? [Fortune]
$$$ Activist funds find going tough [FT]
$$$ Bailout profits? Don’t make me laugh. [TBP]
Archive for August 2009
$$$ Allen Stanford To Undergo Heart Tests [Reuters]
When not tending to its duty as financial regulator, the FSA is busy playing the HR game. Figuring that who better than a regulator would know the hallmarks of senior executive success, the FSA has been busy administering competency tests to prospective C-suite candidates. Since they started deciding whether applicants had the “necessary skills, experience and integrity” to fulfill their potential duties back in October of last year, 15 of the 174 individuals under consideration for positions close to the top of the totem pole withdrew their names before a decision had been made and 12 of the 15 pulled out after the initial encounter with the FSA.
The FSA said: “In a number of cases, applications for senior roles have been withdrawn following interviews that raised questions concerning the candidate’s competence.”
Given some of the FSA’s recent initiatives, one hopes this will be a 360-degree review process.
Applicants pull out as FSA gets tough on top bank jobs [Times Onlne]
While private wealth clients were busy paying fat fees to their favorite Swiss bankers to figure out ways to dodge the tax man, clients at Topeka-based Renaissance were getting tax fraud plans straight from the crew at the IRS. A former IRS district director, Jesse Ayala Cota, will be spending the next two years behind bars for helping clients cheat his former employer.
Owners of home-based businesses who paid to become members of Renaissance received services including tax preparation, tax advice and so-called “audit protection.” The “Tax Advantage System” offered by Renaissance was based on claims that business owners could legally reduce the taxes they paid by converting their personal expenses into business deductions. Cota and other defendants assured Renaissance clients that the tax reduction methods were legal, even though the tax returns filed using Renaissance’s methods were based on providing fraudulent information to the IRS.
See- the gap between Wall Street and Main Street isn’t really that big after all.
Misguided Investment Banker Attributes Pals Being Broke/Not Idiots As Signs Of Maturity, Indication They’ve Become Hip To The Evil Of DrugsBy Bess Levin
So I missed this earlier during our discussion of hard-up coke dealers cold-calling clients, but apparently the fact that one guy’s friends and colleagues aren’t buying drugs anymore because either they’re unemployed and can’t afford to do so or because those with jobs are being slightly more cautious and not blowing rails in the bathroom at work means everyone’s a grown-up now, and has come to the conclusion that illegal substances = bad (blowing guys down at the Port Authority for a bump bad).
Damien, 27, who quit doing coke almost two years ago, has been contacted by three different cocaine dealers, all wanting his business, since June. “None of my friends mess with that anymore,” Damien says, “It’s like they grew up overnight when the banks died.”
Or at least they were back when she and Bernie were having an affair, a hundred years ago. Now, probably not so much but the point is this: her newly released (and deeply discounted) book is nothing if not the pushing of agendas. One, to shout it from the rooftops that Bernie’s penis was so small that it could fit into an electrical socket (she knows for sure because on one fateful night, they tried) and two to make herself sound like a hot piece of cheating whore ass (and maybe score herself another fake billionaire to “pal around” with). We’ve already been told, many times, how hot she was in the heat of the moment. Now let’s discuss the bod.
We were sitting across the table from each other when I walked over, straddled him, and opened two of the buttons on my blouse. He looked down and moaned.
“Have you had surgery?” he asked.
“No.” I smiled. “I have my mother to thank for these. But you can check for scars if you want.”
And since we’re unfortunately here, let’s find out what happened next.
It looks like “the world’s leading risk consulting company” was about as helpful as global financial regulators in identifying elite Ponziers. In addition to giving Sir Allen’s empire a clean bill of health, investigators at Kroll viewed Barry Tannenbaum and his surefire HIV antiretroviral investment scheme in a “very positive light” in their 2007 report. With promised quarterly returns of 15% making it through the fraud filters, the two thumbs up from Kroll helped more investors get in on BT’s golden touch. While the crew at Kroll may be licking their wounds for showing the risks of risk consultants to the world, there is one person who’d like to buy Team Kroll a round or two.
“The accusation of me running a Ponzi Scheme is unfounded and drivel. I was not running a Ponzi scheme at all…Thank goodness there is, at last, someone who believes that I am not all evil,” Tannenbaum said
Once the inevitable happens and Kroll gets sued for missing the boat on this one, Barry may have to reconsider his perceived evil quotient.
US investigators gave all-clear to alleged Ponzi pair [Guardian]
You’ve heard of psychologically breaking someone, yes? It’s a tool all the best money mangers use, but up until now, haven’t discussed publicly. A demo of what we’re talking about, featuring new SAC Chief Strategist Mike Tyson, is after the jump. It may get a little dark for those of you with weak stomachs, but if you’re willing to sacrifice some queasiness in order to win, let’s get it on.
After going through a crisis described as ‘once in a lifetime’, it would make some sense for regulators to take a close look at what the world looked like during a six-sigma event on the off-chance lightning strikes twice. But the folks at FASB would rather focus on the now alternate universe where such thoughts as ‘what would happen if two major investment banks, the entire auto industry, and one of the largest insurance companies went literally or effectively bankrupt’ are met with genuine laughter. The accounting overlords have a proposal in the works which would require companies to utilize alternative methodologies to provide valuations for their Level 3 assets based on “reasonably possible” scenarios. If you want to know what they’re worth when those unreasonably possible scenarios hit, you’re on your own.
FASB eyes more disclosure on illiquid assets [Reuters]
The following anecdote is from a new profile in Vanity Fair by Todd Purdum, who sat down with the former Treasury Secretary at various points throughout his term.
Paulson paused. “Now let me … I’ll be there in one minute … Let me just make a … I have been, you know … I finished this thing on Thursday night, flew over to Tokyo, flew back, and–”
And with that Paulson ducked into the private bathroom adjoining his office, closed the big paneled door, and audibly, violently, and repeatedly threw up. He emerged a moment later as if nothing had happened, but in a few minutes he did the same thing all over again. I asked if he wouldn’t rather stop, and resume our conversation another time. “That’s O.K.,” he said. “I’m just going to go through this all. I won’t remember it. You know, I barely remember the details now.”
If you had to put your finger on it– or down your throat– what would you guess induced the audible vomiting scene above?
a. The Bald had recently completed a REAL vending machine contest, and as he is not a pussy, did so in a matter of thirty minutes, making the upchuck understandable, though regrettable nonetheless.
b. Bernanke had just asked his bro to “check out this growth and tell me if you think I should be worried.”
c. He’d gotten wind of a sick rumor going around that this year’s Goldman alumni mixer would not include the much-loved tea-bagging of passed out Lehman executives booth.
d. He was feeling fat.
e. In a horribly misguided attempt to ingratiate himself to the Secretary, Ken Lewis had sent HP shots of himself in various states of undress on the BAC trading floor.
f. Same as above but swap CG for KL, and drape some Italian deli meats across his loins.
g. your call.
There were a lot of lessons learned during the fall of Bear and Lehman. By now, you’d figure people would have taken a step back, examined the fatal decisions made, and do everything in their power to avoid history repeating itself.
When former Bear CEO Alan Schwartz started at Guggenheim earlier this summer, he was still being a bit coy about his vision for the future when he said, “Fate has dealt me an opportunity to start from scratch”. But now the blueprint for Guggenheim’s future success is clear. Schwartz is going to bring the firm’s investment banking, research and brokerage divisions to a new level by turning them into “the next Bear Stearns.” Give the guy some credit- at least this time around he is giving people a little time to prepare.
At least one, anyway. Have you, like “Nate,” employee of [make your best guess here], stopped purchasing your usual stash in the wake of having no money only to find your hook-up calling you from private lines, showing up at your apartment, hiding in your closest, and demanding to know why you never see each other lately? You don’t have to be afraid anymore. You’re not alone.
Then the stock market crashed, and people started losing [coke dealer] Sammy’s number. But he didn’t lose theirs. “It was a 646 number,” says Nate, 26, who works at an investment bank; he got three calls from Sammy in one week. (Sammy’s contacts — five years’ worth — are stored in a small black notebook with cross streets, physical descriptors, and even sketches corresponding to each name.) When Nate called back, Sammy picked up right away: “He was like, Hey Nate, it’s me, Sammy, where ya been?” Last November, Nate was forced to switch jobs, and took a notable pay cut. “It’s not all fun and games anymore. I told him thanks but no thanks.”
(Of course, Nate needn’t be such a prick about the whole thing. Obviously Sammy is all too aware of the lack of good times up in this piece, and is just trying to make a living, just like Nate, though possibly with more integrity.)
Hit By Recession, Cocaine Dealers Resort To Cold Calling [NYM]