$$$ Jim Cramer: Why The Media Is Wrong About The Market [CNBC]
$$$ Friday Failure [The Deal]
$$$ What Madoff’s Chief Fraud Officer Has to Offer, Other Than Illegal Firearms [Dealbook]
$$$ Harvey Weinstein Fire Sale Begins [GofaG]
$$$ Job of the Week: UBS needs an associate director of investment banking. You. [DB Career Center]
$$$ Las Vegas: The Casino Town Bets On A Comeback [Time]
Archive for August 2009
Dawson-Herman Capital Management is shutting down its once high flying Southport Millennium hedge fund. Word from inside is that friction is mounting between co-founders John Dawson and Russell Herman over last year’s performance, and traders have flooded the street with resumes in the last few days. It’s unclear at this time if John or Russell (AKA “Russ”) will stay with the firm. In its heyday Southport Millennium logged an AUM of over one billion but what’s currently left in the coffers is unknown.
Maybe Ken Feinberg is looking at the wrong thing. If you believe in the Russian model, instead of being gatekeeper to executive compensation, he should be determining if and when the likes of Vikula and Kenny boy have done enough to spend some time away from the office.
Prime Minister Vladimir Putin on Thursday gave VTB head Andrei Kostin permission to take a week’s vacation after the banker said he was on track to meet and surpass an order to boost the lender’s loan portfolio by 100 billion rubles ($3.14 billion) in three months.
Clearly Russia’s unique forced lending program has yet to make it big over here. However, if the administration is serious about encouraging banks to lend, the prospect of KL sobbing about having to cancel his 2-weeker to the Boone’s mothership in Modesto because BAC is still keeping the purse strings a bit too tight might just do the trick.
Putin Lets Kostin Take a Vacation [Moscow Times]
As regulators around the world continue to wage war on executive compensation disclosure, former News Corp. COO Peter Chernin wound up just short of setting the new standard for comical obscurement in employment agreements. Want to know how his stock options measure up to Stanley O’Neal’s? News Corp has “separately provided” that information to Chernin so there’s no need to repeat themselves in the employment agreement. Curious about deferred compensation or even accrued vacation days? That too has been separately provided. In fact, the five occurrences of ‘separately provided’ in the 5-page agreement leave virtually every interesting compensation detail to the imagination. Every detail that is except the exact coordinates to confront Petey face-to-face about his stash of separately provided info. Should you want driving directions to Casa Chernin, News Corp has generously provided his address at the top of the agreement.
News Corp. on how to say nothing in so many words… [Footnoted]
It’s not news that Carl Icahn loves a good fight. But watching hedgie v. hedgie in a grudge match just seems dull. Who does one root for?
Activist investor Carl Icahn is under fire from a hedge fund that accuses the billionaire investor of enriching himself at the expense of minority shareholders in XO Holdings Inc (XOHO.OB), a company he controls.
R2 Investments LDC in June filed a lawsuit in New York state court complaining that Icahn tried to take XO’s $3.5 billion of net operating losses (NOLs) for his own use but at an inadequate price. NOLs are valuable because they can offset income in later periods to reduce taxes.
Ok, who is going to be the first Dealbreaker reader to make an electronic exchange for NOLs that actually works?
Hedge fund suit says Icahn hurt XO investors [Reuters]
For those bankers and other finance professionals looking to escape centrally dictated pay caps, cross Germany off the list of havens.
Bankers who take unjustifiable risks in business deals will be forced to repay their bonuses under new rules unveiled by German financial watchdog Bafin on Friday.
“Aggressive compensation systems, along with other factors, contributed to the financial crisis in that they set the wrong incentives,” Bafin said in a statement on changes it is making to its Minimum Requirements for Risk Management standards.
We would wonder aloud who rules on what is “unjustified,” but we suspect we already know the answer. Nothing exciting goes on in Germany anyway so… no big loss.
German watchdog takes aim at banker bonuses [Reuters]
Just putting it out there.
Related: Melissa Francis Building Reverse Peephole
Earlier: Aggressive Amounts Of Cleave Comin’ At Ya
It’s not just a mad dash for houses and cars that people can’t afford that can produce a credit crisis. India is proving you can achieve the same results one $125 vegetable cart investment at a time. Once viewed as possibly the only population on Earth courteous enough to repay borrowed money, microlending recipients are demonstrating their ability to quickly come up the learning curve on fraud and snowballing debt creation.
“I took from one bank to pay the previous one. And I did it again,” says Ms. Taj, 46 years old. In four years, she took a total of four loans from two microlenders in progressively larger amounts — two for $209, another for $293, and then $356. At the height of her borrowing binge, she says, she bought a television set.”
Still, folks in the developing world have a long way to go before they reach the pinnacle of reckless lending behavior. For starters, people need to learn that admitting you lied on a loan application is a no-no.
Perhaps the details of Mayor Daley’s reputation were not entirely explained to the deal team at Mesirow.
The Metropolitan Water Reclamation District of Greater Chicago, in a debt offering typical of President Barack Obama’s Build America Bonds, raised $600 million this week, relying on advice from Mesirow Financial Inc., a 72-year-old investment bank based in the city. Within 12 hours, the firm assured itself and investors a profit of at least 2 percent as the bonds appreciated as much as $25.82 for each $1,000 face amount, according to the Municipal Securities Rulemaking Board.
Wall Street fleecing financially naive municipalities is a practice as old as sin, but you would think Chicago had the wherewithal to protect itself a bit better from this kind of nonsense. Then again, perhaps we are selling the City short. In this context, one wonders how much overlap there might be between Mesirow and the City elders.
Even Mayor Daley Can’t Get Rates Taxpayers Deserve for Chicago [Bloomberg]
Food eating contest underway on the credit desk at Deutsche Bank. The attempt is being made by an “intern football player,” who must eat his height in Subway sandwiches. 6 feet 6 inches in 45 minutes. Water allowed, must keep it down for 30 minutes. Halfway through, has ’til 12:30. We’ll keep you posted.
Update: He’ll score a mere $750 clams for successful completion of the challenge.
Update II: 5 done, 12 minutes to go.
Update III: “Slowing down. Not looking good.”
Update IV: “Failed. 5.16 final count. Pot got up to somewhere near 3k.”
After some careful introspection, UBS has decided that in spite of CEO’s Oswald Grübel rallying cry for the bank to return to profitability by expanding into Asia and the Middle East because “These are the markets where even we are growing“, things aren’t looking so hot over all. The firm’s quest to reestablish credibility with clients and investors took a big step forward today when UBS decided to downgrade itself from ‘neutral’ to ‘sell’.
