Based on Rep. Alan Grayson’s line of questioning for Federal Reserve General Counsel Scott Alvarez, you’d think the Beard and his troops were using their powers to turn the equity markets into their personal plaything. The game of cat and mouse starts with the question “Has the Federal Reserve Ever Tried to Manipulate the Stock Market?”, which leaves Alvarez a bit flat footed. He quickly goes to the ‘it’s too broad a question’ play which is met with an emphatic “I think not”. The 4 minutes that follow are highly reminiscent of the Stanford Band Play with Grayson sensing victory multiple times until Alvarez slips right by him, the clock runs out, and Alvarez is in the end zone.
[via ZH]
Archive for September 2009
Have you heard the news about Goldman Sachs’s struggle to figure out how it can a) make it rain ridiculously huge bonuses on employees’ faces this year while b) not giving certain pissant journalists at publications like, I don’t know, Rolling Stone, opportunity to smirk knowingly while implying that though it’s difficult to prove definitively the money came from the proceeds of organ trafficking, that certainly seems to be the case? Citi analysts have. They (for some reason) detailed the PR problem in a note to investors yesterday, writing that the firm will pay its people more this year than ever due to “phenomenal results.” But please, do not get the impression that just because bonuses will be dispensed in a DuckTails-esque scene on the trading floor that Goldman is somehow tone deaf to the shit that’s gone down over the last year. This could not be further from the truth, says Citi. Citi knows this because its analysts had a sit-down with senior management at the bank to discuss the matter, and were assured Goldman gets it.
Goldman Sachs management has to “walk a fine line” between paying enough money to employees to discourage them from leaving and paying so much that it elicits “excessive ire” from the government and public, the note said.
“According to management, Goldman’s main compensation principles have not changed and are widely in-line with the spirit of regulatory proposals,” the analysts wrote after meetings with Goldman Sachs Chief Financial Officer David Viniar, President Gary Cohn and other executives.
Not really clear as to what the motivation was for opining on the situation (and feeling the need to get out Goldman’s side of the story) but presumably the thinking was that was that it’d give the Big C an opening to suggest that if things get really bad, GS ought just give them the money to hold on to until things blow over, which would be a win-win for all.
Something odd seems to be happening on the other side of the Atlantic. It’s almost as though people are looking into the crystal ball at the new world order as described by politicians and getting a bit worried about what they see. And without full confidence that they’ll have a working flux capacitor in a few year’s time to get the DeLorean up to 88 mph to undo today’s damage, they’re starting to speak up.
First there was the proclamation that derivatives did not single-handedly bring the world to its knees. Now the CEO of the British Bankers Association, Angela Knight, is bringing some truly revolutionary thinking to the table in light of Adair Turner’s social usefulness campaign.
“If we continue to demonize our own banking industry, there is no shortage of other jurisdictions which will leap at the chance of taking the business,” Knight, who heads the U.K. banking industry’s main lobby group, said in remarks prepared for a speech in London yesterday. “Those who have the opportunity for public platforms also have a duty to use that opportunity advisedly.”
“The manner of our criticism is not helping our negotiating position,” Knight said. “If the price of gaining headlines and column inches in the short term is the cost of jobs, and our country’s economic prospects in the long term, then their price is simply too high,” she said.
It’s good to see the winds of change are starting to blow in the UK. Unfortunately for the US, the wind tends to blow from west to east in this part of the world.
U.K. Banks Risk Losing Business After FSA’s Criticism, BBA Says [Bloomberg]
Area Man Has One Month To Prove Why Bank Of America Owes Him 1,784 Billion, Trillion Dollars
By Bess LevinI don’t know what you people do when you realize you’ve been had (roll over and take it, probably) but Dalton Chiscolm is saying enough! While it’s unclear exactly what he’s upset about, the gist is that earlier this summer DC tried to deposit a bunch of checks with Bank of America, which he claims were rejected due to incomplete routing numbers. Then he got on the horn in an attempt to get some answers, and received “inconsistent information from a Spanish woman.” Obviously, the only left to do was demand Ken Lewis personally place a series of unmarked bills in however many trash bags it takes to hold $1,784 billion, trillion (plus $200,164,000) and nobody gets hurt. Chiscolm filed this request with the Southern District of New York back in August, and now that Judge Denny Chin has finally gotten off his ass and to read and respond to the thing, it sounds like this all might actually pan out.* (If Lewis can’t come up with the scratch, Chiscolm will take the 23 quadrillion he knows they’ve got on hand.)
*If someone can get past what seems to be the impression that Chis is insane.
The former Mrs. Sir Allen is trying to extract a pound of flesh, but not from who you might think. Before he moved on to bouncing the wives of English cricket players on his knee, Stanford had been ordered to pay $100,000/mo plus all expenses associated with his wife’s $2.4 million pad in Houston. While $100k/mo might seem like a decent settlement for time served with Sir Allen, apparently there was a much better deal on the table. Susan Stanford’s attorney received a verbal offer of $200 million from AS to put an end to the divorce proceedings once and for all. That small detail somehow escaped her attorney’s mind, who now, in turn, faces a $200 million dollar lawsuit.
“If the plaintiff had been made aware of the substantial sum offered as settlement in her divorce proceedings, she would have readily accepted,” Susan Stanford’s current attorney, Michael P. Mallia, said in the complaint. By the time his client learned of the offer, “the substantial community property assets at issue in her divorce proceedings” had been seized or frozen,” he said.
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Stanford’s Wife Sues Her Ex-Divorce Lawyer for $200 Million [Bloomberg]
Does Ann Coulter show up to the SEC with her “information” and demand “just two minutes” of Mary Schapiro’s time to prove Bank of America is a Ponzi scheme? No! (She’s otherwise occupied with more important endeavors.)
Earlier: Is The SEC Not Willing To Listen To Reason?
Lehman Asks To Unseal Documents From Barclays Probe (Reuters)
Some people (Joe Gregory) still thinking the Brits got “an improper $8.2 billion windfall profit,” and would like that money back.
Accused Perot Staffer Led ’79 Hostage Rescue (WSJ)
Inside trading, hostage negotiations– is there nothing Reza Saleh can’t do? This is a true Renaissance Man.
Morgan Stanley Tops M&A League Tables (NYP)
But Goldman is ahead in fees: “$334 million or 9 percent of the market — well above Bank of America Merrill Lynch with a 5.7 percent market share, and Morgan Stanley with 5.4 percent.”
HSBC To Shift CEO To Hong Kong (WSJ)
“We want to be at the gateway to China. Being in China itself is a logical goal and the place to work on it is Hong Kong,” Michael Geoghegan said at a news briefing Friday in Hong Kong. “You must expect Asian businesses to grow, and logically we are going to be here.”
National Lampoon CEO Pleads Guilty To Fraud (AP)
Federal prosecutors in Philadelphia say CEO Daniel Laikin was part of a plot to artificially inflate the company’s stock price by paying people to buy shares. The 47-year-old man, who lives in Indianapolis and Los Angeles, pleaded guilty to conspiracy Wednesday. Prosecutors dropped a count of securities fraud in exchange. Prosecutors say Laikin and others hoped to push the price of the shares from $2 to $5 to boost its attractiveness in a strategic partnership or acquisition.
Marc Faber: The G20 is a “complete and total waste of time” (CNBC)
$$$ Paul Volcker: Obama Plans To Maintain ‘To Big To Fail’ [HP]
$$$ Mafia boss used crocodile to extort money [CNN Money]
$$$ Goldman Sachs Helped Michael Moore Make His Anti-Capitalist Film [BI]
$$$ Court to Decide Fate of Madoff Claims in February [Dealbook]
$$$ Prosecuting Paupers Over Princes [WSJ]
The Reserve Bank of Australia says the land down under simply has higher standards and that is what set its apart from the US. While you might think the RBA was talking about how Amanda Drury measures up to some of her in-house competition, the topic at hand was actually lending standards and the country’s ability to avoid the full brunt of the economic crisis. But the US is not a country that takes kindly to being told it has no standards. We set the standard- the global standard. So your reasons for believing you’ve got superior benchmarks had better be good.
Lending standards were higher here, with the banks largely avoiding the subprime borrowers that lit the fuse of the financial crisis in the US.
Interest rates, as well, did not reach the low levels that put home ownership within reach for many people offshore who had limited repayment capacity. Australian mortgages are also full recourse to the borrower, and the legal environment puts a stronger obligation on local banks to make responsible lending decisions.
Finally, the prudential regulator stress-tested mortgage portfolios and required more capital to be put aside for high-risk housing loans.
Congratulations. You’re now 2-for-2.
Higher standards saved us, says RBA [The Australian]
The chair of the European Parliament’s Economic and Monetary Affairs Committee spoke at a derivatives conference in London today and, as you’d expect, anybody who is head gatekeeper for derivatives legislation in Europe added more fuel to the derivatives vilification campaign.
“They [OTC derivatives] were not a major factor in the crisis although, of course, a lot of politicians had worried they might be a cause of a crisis for quite a long time,” said Sharon Bowles, whose committee is responsible for passing any new European Union rules on derivatives.
Wait a second! OTC derivatives were not a major factor in the crisis?! Maybe it’s just a case of British sarcasm not coming through very well on paper. Did she not tune into the Congressional panels filled with experts who explained once and for all that derivatives do nothing but cause destruction? Ask the Oracle. He’ll tell you what bespoke derivatives can do. But maybe that was just a slip up on her part. Please continue Sharon.
“Where bespoke OTC products are retained and needed then it seems there should be proper analysis to see what risk those pose rather than make a blanket assumption concerning their risk and penalize them all,” she said.
In the words of Al Michaels, “Do you believe in miracles? YES!”
EU Econ Committee: Derivatives Not Big Factor In Crisis [WSJ]
What has this world come to when you can’t drop your World Series rings off at a pawn shop without having some Japanese film crew up your ass? While it’s true that yeah, we track Nails’ every move, we do so out of love/fascination/admiration for the guy, not in order to humiliate him/make something out of nothing. He just needed a little money to cover the costs of dip and Twizzlers for a while, and this makes it seem like he’s a homeless dude on his last legs, so desperate for a hit he’d rip the fixtures out of his foreclosed house and hock them for cash (longer clip here).
