Greg and I couldn’t agree on our favorite questions from yesterday’s contest so whoever would like to go hear Vikram speak tonight at the 92nd Street Y should email us now for the tix. The first two people to do so will get them and be infinitely more likely to give Vik a squeeze than the plebes not in attendance. Also, the organizers of the event are apparently still mining our comments for good brain busters to lob Pandittle’s way during the Q&A, so if you’ve got something on your mind (has he ever ridden one of Prince Alwaleed’s ponies bareback?) you’d like answered, have at it.
Archive for September 2009
Whether it was the heat from global lawmakers, the angry mob at CalPERS, or divine intervention, S&P has done some soul searching and concluded that blind faith in a Monte Carlo model for CDOs may not have been the way to go.
The ratings firm will introduce tests — both quantitative and qualitative — to supplement its default-simulation model. S&P will also adjust its models to target AAA default rates it believes are commensurate with conditions of extreme macroeconomic stress, such as the Great Depression, as well as BBB default rates consistent with the highest actual coproate (sic) defaults over the past 28 years.
The result of all this good news? A cool half trillion spread across close to 5,000 CDO tranches is on downgrade watch. While super senior tranches may see a shoulder shrugging two to three notch downgrade, more junior AAAs could lose two As before the carnage is over. Given the level of potential damage, it almost provides credence to ‘better never than late’.
It’s not just wrestling moms who want to get in the ring with Senate Banking Committee Chairman Chris Dodd for his senate seat. A day after WWE matriarch Linda McMahon announced she wanted to compare records with Dodd, Euro Pacific Capital President Peter Schiff decided to add his name to list of people looking to go mano-a-mano with the Beard naysayer and wasted no time making his position clear.
Dodd “represents all that’s wrong with Congress,” Schiff said on the show. He called Dodd a “poster boy for the economic crisis.”
Even though Schiff has raised over $1 million for his campaign, the author of “Crash Proof 2.0: How to Profit From the Economic Collapse” already has a plan in place to demonstrate his ability to control unnecessary spending.
Schiff says the fact that the Republican field is crowded is a plus for him. He also predicted he would receive a boost from McMahon’s candidacy. “She’s going to be able to spend a lot of money criticizing (former U.S. Rep. Rob) Simmons, so I won’t have to do it,” he said. “What sells Linda McMahon sells me.”
Peter Schiff Launches Senate Run [Hartford Courant]
ABCNews reports that the Grand Master of Ponz’s Montauk beach house has sold in an all cash deal for “over the asking price” (which was $8.75 million) to an unknown buyer (take your best guess) with a love of Formica countertops. This news should please US Marshall Roland Ubaldo greatly, who went to bat for the home insisting it is “really breathtaking, simple, stylish, with an understated elegance” after CNN Money went to town on the place and its “smallish bedrooms,” “unremarkable” layout, “lack of style,” proximity to the beach that will probably result in the new owner drowning, and general taint of scandal. This might also serve as a teachable moment to Tim Geithner, whose Larchmont home remains unsold, about what sells in this market. In related news, Berns’s Palm Beach pad and penthouse on East 64th are still available. You want a piece of this.
Are you a wealthy investor whose money is tied up with some hedge fund manager doing god knows what with it? Have the events of last year, when it turned out basically everyone was running a Ponzi scheme left you freaked the fuck out? Maybe a little bit scared shitless? No? Check out the picture at left….how about now? What if we told you that’s what your money manager’s doing when he claims to be on the desk? What if that is the desk, and entire operation they’ve got gone on up in CT is just one big drag show? Quaking in your boots, right? Thinking you need a little protection? Good. Excellent, even. Rudy Giuliani has your right where he wants you.
Capitalizing on the panic coursing through the ranks of the ultra-wealthy in the wake of the Bernard Madoff Ponzi scheme scandal, former New York City Mayor Rudolph Giuliani is joining forces with Nine Thirty Capital in a new venture to vet hedge fund managers for fraudulent activity, according to an announcement being released today.
“It’s no wonder that investors are extremely wary about where they should invest their money and are asking, ‘Who can we trust?’ ” Giuliani said. “More than ever before, investors need to be sure that the people and funds they entrust with their assets aren’t just saying all the right things, but are actually doing what has been promised.”
There are many reasons to consider keeping the stimulus program in place: reduce the risk of a double dip recession, put a couple more people to work temporarily, and, most importantly, allow the self-congratulatory sign party to continue. Apparently there are still not enough signs proudly proclaiming the triumphs attributable to the government stimulus program for a fair number of lawmakers. An amendment brought by Sen. Judd Gregg to end using stimulus money to pay for the value added signs was promptly shot down yesterday leaving the senator to ponder what sort of backward logic he used to come up with the proposal.
“Considering the questionable effectiveness of the stimulus bill, it is completely unreasonable that signs are being constructed at a price tag of hundreds to thousands of dollars apiece for lawmakers to pat themselves on the back about this legislation,” said Gregg, who voted against the stimulus bill.
“These signs are simply for political self-interest, and it’s high time we stop using stimulus dollars to fund them, and instead use these dollars for their intended purpose of creating economic activity,” he said in a written statement.
As you’ve probably figured by now, Citi’s niche in the finance world is ad campaigns. They absolutely love ‘em, the worse the better. Particularly when times are tough and people are questioning the bank’s ability to do anything but fuck up, the Big C knows the way turn things around is as simple as fantabulous new slogan plastered all over town. Last year it was the bold proclamation that everyone working there is an insomniac and the year before that it was copy written by Larry the Cable Guy. Things have been going pretty smoothly for a while, but now Citi’s starting to get the sense that once again, they’re being seconded guessed. That they’re getting a reputation. That it really wasn’t an “honest mistake” when Geithner referred to the place as “shittygroup” on the phone the other night. And they know what they have to do.
Citigroup, Wall Street’s poster child for bad banks, is about to launch an advertising campaign aimed at burnishing its badly tarnished image, sources tell The Post. According to people familiar with the matter, Citi as soon as next month could pull the wraps off an ad blitz that will highlight its virtues and looks to build public confidence for a management team that has been under fire ever since Citi took $45 billion in federal rescue cash.
Though details of the ad campaign are scant, the media push is expected to spell out the positive strides that Citi has made in using taxpayer money, such as helping consumers stay in their homes by modifying home mortgages, and defend the bank and CEO Vikram Pandit against those pressing for a change of leadership, sources said. It’s not clear if Pandit will be featured in any ads.
Obviously, first off, the ads must feature Pandito. But in what sort of scenarios? Helping a family of four move into their new home? Playing the role of a loan officer stamping “approved!”? As for defending his role at the top, it’d probably be smart to do a least a couple spots reminding people that even though he wanted it very badly, Vikula gave up his dream of a $10 million Zen Garden, because that’s just the kind of CEO he is. What else would inspire confidence? Vickles sitting soberly on the Gulfstream with the words, “You won’t see this guy catching a beej at 30,000 feet” at the bottom? A badly photoshopped image of VP spooning in bed with John Paulson and “If was willing to get behind this thing so should you, STFU” in huge letters? We’re told insiders are dying to do a shot of Vikram (jokingly) putting the Dollar Dominatrix in a choke-hold with the line, “We certainly showed this one, eh?” but it probably won’t fly. Let’s put our heads together here.
Citi to Pay Back U.S. When Recovery More Evident (Reuters)
“To us it’s really more about timing than capacity (to repay the $20 billion),” Vikram Pandit said, speaking at a conference at Barclays Capital in New York. “We’ve got the money, honey.”
Kerviel Says Proposals to Limit Pay Won’t Control `Addict’ Traders, Risks (Bloomberg)
“It’s a job that makes you a bit crazy, an addict,” Kerviel said in an interview on France2 television. “They push you to take risks.” JK also said proposals to limit pay won’t do a thing, and that he worked for 20 euros an hour, and didn’t take any of his scam profits for himself.
Ex-Brokerage Chief: Pressured to Forgo Bonus by Thain (WSJ)
In December, while in the midst of selecting the perfect rug for his new office, John Thain apparently gathered a group of top Merrill Lynch executives, including Bob McCann, and told them they had a “wonderful opportunity” to give up their bonuses, after he’d gotten shit for supposedly asking for a $10 million bonus for himself. According to McC, he said, “I guess I volunteer, John. Can I go back to work now?”
French banks say capital plans ‘unfair’ (FT)
“The origins of the crisis very clearly reside in America,” Baudouin Prot, the French Banking Federation’s chairman and chief executive of BNP Paribas told a French Senate finance committee. “It would be paradoxical if European banks were to be penalised in terms of competition against US banks, given that the crisis originated in the US.”
Sculpture missing from Madoff’s NY beach home (AP)
A 4-foot-tall sculpture, with an Aztec motif, valued at $300, was stolen from Bernie Madoff’s hideous Montauk house over the weekend. This is the second time one of his yards has been vandalized (last time it was the house in Palm Beach), and he’s starting to think people might harboring some sort of ill will towards him.
$$$ US Rep Frank bars Goldman Sachs lobbyist [Reuters]
$$$ Ashley Dupre is a model now [NYP]
$$$ Fiat CEO: Chrysler worse than we thought [CNN Money]
$$$ Day in the Life of an Accelerated M.B.A. Student [WSJ]
$$$ Charlie Gasparino on John Thain getting a new gig in PE (previously)
Robert Benmosche, chief executive officer of American International Group Inc., was rebuffed by the insurer’s board after saying he should be allowed personal use of the bailed-out company’s aircraft, according to two people familiar with the matter.
The board said flights will be limited to business purposes because creating an exception would require approaching the Treasury Department for approval, said one of the people, who asked not to be identified because the talks were private. AIG posted an expense guideline on its Web site this week saying that personal use of corporate jets is “strictly prohibited.”
Benmosche Said to Be Rebuffed by AIG Board on Corporate Jet [Bloomberg]
After almost a year of building up to the banking regulatory reform brawl, it looks like Mad Max may have more pressing things to attend to this fall.
The House ethics committee announced Wednesday that it is extending probes into two lawmakers — Democrat Maxine Waters of California and Republican Sam Graves of Missouri — in unrelated cases while it deferred investigation into a case involving Rep. Jesse Jackson Jr.
The Committee on Standards of Official Conduct did not say why it was extending the probes, but that they related to an unannounced question surrounding the conduct of Waters and an unspecified matter regarding Graves.
