At some point down the road, the US and Italy may want to compare notes about the level of interest in their respective tax amnesty programs. The IRS has made it clear that even if you decide to atone for your tax sins, your future is still a function of what side of the bed the respective tax investigator wakes up on. Then there is the Silvio Berlusconi plan. The rules are pretty simple- divulge what you’re hiding abroad, pay a fine of 5% of that amount, and your record is wiped clean. End of story. As you might guess, not everybody is fully on board with the 5% stay out of jail (almost) free plan.
“Shameful,” centrist Senator Gianpiero D’Alia told the Senate, “With this, Mafiosi and terrorists can repatriate illegally gained capital without any control by the state.”
“This is nothing less than a gift to the white-collar class and an insult to the principles of ethics and fairness,” said Giuliano Barbolini, a parliamentarian of the opposition Democratic Party.
True as that may or may not be, with Italians hiding an estimated €600 billion in the shrinking list of tax havens, the government stands to gain a decent chunk of change with the introduction of its offshore tax rate program. It appears the country still hasn’t decided whether or not to embrace the work of another famous Italian politician: Machiavelli.
Berlusconi government under fire over fraud amnesty plan [Retuers]
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Vladimir Putin is not one to engage in irrational exuberance. He knows Russia is a volatile place and things can get out of hand quickly. So before the current guard in Moscow gets too comfortable with the recent economic recovery, Putin had some words of warning about “ungrounded optimism”.
‘A money hunger can trigger a new downfall,’ Putin said, asking ministers to improve the efficiency of budget spending instead of making ‘mechanical’ cuts that would reduce a stimulus package for the economy.
But Putin shouldn’t have to fight this battle alone. This is the age of one world fighting global problems together as one. Nobody heads out there alone. We’re on the buddy system now. So who is going to be there to help Putin pull through?
At his annual meeting with academics, think-tankers, and journalists, Putin barely mentioned Obama but “repeatedly expressed fondness for his friend ‘George,’ ” says Cliff Kupchan, a Russia analyst at the Eurasia Group consultancy. “He clearly has a personal softness for George Bush,” says Kupchan, who attended the meeting
Well this is sad. Bernie Madoff’s longtime administrative assistant, Eleanor Squillari, is selling the above portrait of the boss, photographed by artist Yousuf Karsh. It once hung over her bed (Berns’ suggestion), but those were in better times, when Squillari thought of Bernie fondly as the guy whose hand job appointments she’d book, and whose mistresses she talk trash about out of jealousy. Before she found out that the mitts that grabbed her ass were those of a criminal. Now she wants nothing to do with him or his likeness and is pimping the headshot to the highest bidder. Opening bid is $2,500 and she’s hoping for about 5 large. Personally, I’m holding out for a life-sized cut out of this.
The mere thought of it is enough to induce euphoria among the compensation lawmakers of the world, and make Stan O’Neal spontaneously combust. You finally make it to the top of the corporate ladder at one of the biggest financial services organizations on the planet and for all your rainmaking efforts, your career justifying payday comes in at the handsome sum of a bit over $200k. China may have the world’s two largest banks by market cap but they are light years behind the competition when it comes to embarrassing pay packages at the top.
China, for example, boasts three of the world’s four biggest banks, yet the leaders of those banks — Industrial and Commercial Bank of China, China Construction Bank Corp and Bank of China — are among the lowest paid of those surveyed by Reuters. The chairman and the president of each of the banks are paid roughly $230,000 per year.
So that’s it then. The Chinese have found the executive compensation reform holy grail. What clever model should the US rush to embrace to simultaneously end the public outcry and create a legion of capable, responsible, humble bank heads?
The Chinese banks, which are state-controlled, are typically led by bureaucrats appointed by the central government, and executive pay is capped.
On second thought, maybe $19 mil or so for Jamie Dimon isn’t such a bad deal.
Study shows U.S. bank CEO pay dwarfs rest of world [Reuters]
The Times has an exposé today on Mayor Bloomberg’s eating disorder, the fallout from which the city of New York is suffering. Basically Hizzoner binge and purges constantly and on really bad days looks in the mirror and thinks “you don’t deserve a third term because you’re a fat fat fattie fat.” The crescendo of the piece is the accompanying slideshow, entitled “The Mayor In Snack Mode,” in which the Gray Lady presents us with close ups of Mikey Boy literally shoving food in his mouth (chicken wings? pizza? don’t mind if I do!), after noting that just the sight of an unflattering picture can trigger foul moods and episodes of gluttonous ecstasy, followed by starvation, practically ensuring the guy’s going to knock over a 7-11 tonight after work. It’s pretty uncool of the paper, of course, and not very sensitive, but obviously our minds immediately turned to how we could exploit the Bloomie’s skills for sport. Has Oyster Boy met his match? Pretty confident Mike would’ve actually had the Munchkins swallowed and digested by the buzzer. No special ruling necessary.
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If you want to work for an organization that is squarely focused on making profits, don’t work for a UK bank. That was the most recent message from FSA Chairman Adair Turner. The age of profit as the primary motive of financial institutions should be replaced by “social usefulness”. In fact, there may be some products out there so socially useless that they should be abandoned altogether, regardless of their ability to help repair roughed up British banks.
“Top management of banks — and in particular of any banks which are involved both in complex trading activities and in retail banking activities — need to operate within limits,” Turner told 300 financial-services executives and lawmakers late yesterday in London. “There are some profitable activities so unlikely to have a social benefit, direct or indirect, that they should voluntarily walk away from them.”
Welcome to the age of walking away from your problems solutions.
Banks Should Prioritize ‘Social Benefit,’ Turner Says [Bloomberg]
Of course they probably didn’t know he was a criminal at the time, but that’s besides the point. According to the complaint filed by everyone’s favorite moose fister, it was her colleagues at RBC who encouraged her to get involved with Westgate Capital founder (and noted con) James Nicholson, making the firm’s claim that her relationship with him was inappropriate (and a fireable offense) kind of bull shit (Boves also says that the allegation she helped her Ponzier bf raise money for his fund is a lie). With regard to the sexual harassment Lindy claims she was subjected to during her time in the New York office, she’s provided a few more examples of the pick-up lines used on her at work:
13. Robert McGuire incessantly commented on her appearance…On one occassion, Mr. McGuire told her to “keep [her] guns at bay,” referring to her breasts.
25. Brit Railston also harassed Ms. Boville by repeatedly referencing the ways in which he would hit on her when he was drunk. He said in a message, “I’m going to be in town next week. Make sure you hide. Don’t pick up the phone when I call after three drinks.”
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Bernie and Sir Allen may need elaborate schemes to swindle people out of billions, but in the emerging markets, fraud tends to be a bit more direct. Take for example Kazakhstan. While some may look to bad loans as the primary culprit for the outbreak of restructurings, one bank was being victimized by the time honored tradition of theft.
Abylkasym Mamyrbekov, ex-deputy chief executive of Alliance Bank, is accused of using deceptive accounting practices to shift 1.1 billion dollars (744 million euros) into privately held offshore bank accounts.
How exactly could the #2 in charge of the fourth largest lender in Kazakhstan get away with a ten-figure heist? Surely the guy in charge must have been keeping a watchful eye over his empire to guide it through the crisis.
The company’s former chief executive, Zhomart Ertayev, was also arrested over the scheme in August.
Then again, you never leave your wing man.
He’s just trying to be honest, okay?
Blankfein: I think we all know that greed can drive behavior, but it tends to be short term and ultimately destructive. Our leadership team stands out because most of our people have built their whole career at the firm and stayed through many years and many changes in the market. When our people leave they tend to go on to other positions — whether in government or other forms of public service — that no one would do if their were motives were financial. Those characteristics don’t make me think of “greed.”
SPIEGEL: So only modest, good people work for Goldman Sachs? We hardly believe that.
Blankfein: I have stated my honest view of things.
Interview with Goldman Sachs CEO: ‘We Didn’t Realize How Bad Things Would Get’ [Spiegel]
Lehman Alums Eye Fund Launch (NYP)
Get in on this while you still can: ” A little over a year after Lehman’s demise, former top trader Alex Kirk is said to be joining with the former second-in-command, Bart McDade, to launch a fund called River Birch Capital. While details are scarce, sources said Kirk, a 25-year Lehman veteran, has been working the phones for months, with an eye toward getting the investment fund off the ground. River Birch could aim to purchase distressed assets and other fixed-income debt, including high-yield securities — areas in which Kirk has expertise. One source said some of the billions in mortgages and other esoteric securities still owned by the defunct Lehman might be on the radar.”
UKFI Sacks Headhunter Over RBS Appointment (NYT)
Apparently the group that oversees the UK government’s stakes in bailed-out banks was not cool with employing Johnny Cameron, RBS’s former head of investment banking (and “a close ally of tainted RBS boss Fred Goodwin”), as an adviser.
Review Says No Net Loss For Some In Madoff Scheme (AP)
Half Big B’s clients lost nothing due to unwittingly well-timed withdrawals of more money than they originally invested.
US, Accused Bear Managers Fight Over Evidence (Reuters)
A lawyer for Rich Tannin believes the “allegation” that her client erased an incriminating Gmail account is “an eleventh-hour smear.”
Hedge Funds Keep Watch On Washington (BW)
One client who runs a $4 billion hedge fund in San Francisco that employs 25 researchers recently told consulting firm GLG that while he never expected Washington to become “the financial capital of the world, now that it is, I have to understand.”
Harvard, NYU Law Students Left Hanging as Firms Slash Offers (Bloomberg)
It could be worse– you could’ve gone to law school and now been sitting by the phone waiting for a call that will never come while a sad trombone blows in the background.
