So you can imagine The Black Swan author’s surprise to find out his b-school chum is an alleged insider trading specialist.
Nassim Nicholas Taleb, author of The Black Swan, got a shock when he opened the newspaper last weekend and saw a picture of an old classmate from Wharton business school at the University of Pennsylvania.
“He was an extremely likeable fellow, chubby, a warm personality. If I had to give my keys to someone in case of getting locked out of the house, he’d be the kind of guy I’d go to.”
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Update: UBP takes New Castle up on offer to pull money.
The New Castle Funds, once part of Bear Stearns Asset Management, have informed investors that despite the news of president Mark Kurland and “consultant” Danielle Chiesi being arrested for their roles in the Galleon insider trading case, everything is cool. Kurland and Chiesi have been blacklisted and your money in safe. Nevertheless, if you want to take your cash and make a run for it A-sap, everyone here will understand. (All funds provide monthly liquidity with 30 days notice.)
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Galleon Clients Abandon Ship (WSJ)
Redemption requests are up to $1.3 billion (out of $3.7 billion) so far and Bank of America Merrill Lynch and Barclays have told Galleon they will no longer trade securities positions with the fund.
Prosecutor In Galleon Case Makes A Splash (WSJ)
“What former Manhattan U.S. Attorney Rudy Giuliani did to the mob is what Preet Bharara will do to Wall Street.”
Wall Street On Edge As SEC Top Cop Gets Aggressive (Reuters)
Also on your list to fear: “Robert Khuzami, who convicted the “Blind Sheik” and his ring of bomb plotters in that trial, is targeting a different kind of villain — corporate executives, traders and fund managers who dare to break securities laws. About six months into his job as the U.S. Securities and Exchange Commission’s enforcement director, Khuzami, who was handpicked by SEC Chairman Mary Schapiro, has shaken the agency to its core with reforms designed to ensure it does not miss the next Bernard Madoff.”
Galleon Traders Seek Legal Advice, Update Resumes (Bloomberg)
Downplay having worked for Raj-Raj, etc.
NYC Judge Tosses $10 Million Suit Against Biden’s Son, Brother (AP)
Stephane Farouze didn’t lay out his allegations against Hunter Biden and James Biden ”with any meaningful degree of particularity,” Manhattan state Supreme Court Justice Bernard J. Fried wrote in an order filed Friday.
10 More People To Be Charge With Insider Trading This Week (Bloomberg)
Some related to the Galleon case, some not. Let’s take bets on who they are!
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Aspiring actor Nicolas Cage is looking to help settle his $6.5 million tax bill by suing his former business manager, Samuel Levin, for approximately three times that amount. According to NC, his road to financial ruin was a direct result of Levin’s rather bullish position real estate over the past couple of years. So now it’s time to pay up. But litigation takes time and the IRS is still learning that patience is a virtue which means Cage is going to have to part with some of the crown jewels of his collection.
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Dick Bove has some words of wisdom for those of you considering a career following in his footsteps: don’t do it. According to the original furry woodland creature, the business of equity research just isn’t what it used to be and cautioned all would-be disciples against aspiring to be junior Bovettes.
“It’s becoming rarer and rarer to find someone who will pay for research,” says Bove. “It’s not like you go out and say, ‘This is the product, this is the price for the product, and if you want the product you can pay me.’”
You give away research for free for six months to a year in the hope that someone will pay you,” he says. “And in many cases they won’t. They take it for free and refuse to pay – there are people that we’ve dealt with in Britain who think it’s their right to get the product and that we have an obligation to send it to them.”
But Dick Bove has made a career out of recommendations, not complaints. So if he had to do it all over again, where might DB recommend going to work today?
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First off, we weren’t even going to mention obscenities that appeared on the front page of the Journal today. Obviously, I’m talking about this:
Why? Because we’re an upstanding financial publication with standards, unlike the smut factory Rupert Murdoch is running. But then a few things happened. 1) You people would not stop e-mailing us about it. 2) I started to realize that this wasn’t just some accidental slip of the tongue on the headline writer’s part but a calculated course of action to send us a serious coded message about what’s been a’ poppin’ over at the Galleon Group (The scribes brought it on home by beginning the third paragraph thusly: “Parts of that network appear to have turned on the billionaire investor”). 3) I found myself with time on my hands, given that Raj is yet to call us back to talk shop (tried him at the office twice and a few times at home; his assistant seemed flustered and in chatting with the wife, I’m prettay prettay prettay sure I detected some growing irritation on her part, though she claimed she’d pass on the message we’d called). So, I did what anyone in my position might do, and uncovered some of the rejected headlines the Journal originally wanted to go with but were sadly prohibited from using. I don’t have them all so if you caught wind of any, let us know below.
* Colleagues Finger Bang Billionaire
* Colleagues Fist Billionaire
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As the Beard was off singing the praises of the Asian economic recovery story, David Einhorn threw on some long-dated option positions to put Greenlight investors in a spot to cash in from a looming currency crisis and interest rate explosion emanating from the heart of the region, Japan. In addition to building a fortress of gold to protect against US leaders “too trapped in the short term and special interests to make (serious choices)”, Einhorn took a bit of a different stance on the trajectory of certain Asian economies.
“Japan may already be past the point of no return,” he said during a presentation at the Value Investing Congress in New York.
Japan’s debt is equal to 190% of the country’s gross domestic product, and its government deficit will be 10% of GDP this year, Einhorn said.
“When the market refuses to refinance at cheap rates, problems emerge,” he said, adding that this could trigger a “currency death spiral.”
This certainly sounds reasonable. Greenlight investors should rest a bit easier knowing the guy at the top has done some critical analysis, positioned accordingly, and hopes to see the fruits of his labor in the future.
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The Galleon Group said Friday that it “continues to operate and is highly liquid” but one of firm’s top lieutenants is admitting he doesn’t think the shop will last long.
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At this critical juncture of the recovery, politicians need to put petty projects aside and focus on what’s important. We need a concerted effort to address the issues that pose a threat to the new era of second derivative led expansion. What should be done with dollar? When should the Beard raise rates? How can we turn job losses into job creation? But that’s not the exhaustive list. There are other issues that deserve the undivided attention of the Treasury Secretary and the Federal Reserve Chairman right now. Such as what to do with the UIGEA.
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As everyone on the planet knows, Jimmy Cayne loves to get high. For some reason, however, he routinely downplays or outright denies any drug use, even though weed has done so much for him. First off, due to its mind clearing properties, Cayne has come up with some of his best ideas while stoned, which Wall Street Marijuana and Cough Syrup Expert Charlie Gasparino details in his new book, The Sell-Out. Coupla things JC came up with while he was “thinking straight,” which the ex-CEO has never been given adequate credit for are 1) to refer to Goldman as “Goldman Sucks” (which seems like such an obvious nickname but took several hits on the grav-bong to put in rotation) and 2) to bring down an 85 year-old institution for shits and giggles.
Second, Bear Stearns would not have soared to the heights it did (pre-crashing to the ground a burning fiery explosion) if it weren’t for the fact that Cayne regularly brought deals home by offering people some of his stash, which he claimed was the best on the Street and no one could resist, not even “a Jew.” From The Sell-Out:
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Emerging market recovery and growth will not be driven by commodities alone. Fiscal restraint is also required and Russia is taking a leadership role. While the price of oil will be important in determining the country’s economic fate, Moscow has identified a simple, modest plan to spur agricultural production and reduce costs: eliminate snowfall this winter. The mayor, Yir Luzhkov, plans to shell out $6 million to enlist the Russian Air Force to litter the sky with cement powder, dry ice or silver iodide in an effort to reduce precipitation in the city.
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