Goldman’s chief economist may call for a collective deep breath when it comes to the costs of the financial crisis, but for the EU, the collective itself may be the problem over the coming years. The European Commission has raised the deficit alert level for the U.K., Spain, Ireland, Greece and Latvia to “serious concern” for their efforts trying to avoid a complete economic meltdown. Having avoided disaster for now, the fiscal five of concern now get to focus on their new status quo in which “avoiding exponentially increasing debts is a policy challenge already in a medium-term perspective.” While a situation like that could also be an issue for the US, unless we’re going to potentially kick states out of the union for piling on obscene levels of debt, it’s Washington’s problem. However, to keep your EU membership card, there are standards.
Archive for October 2009
Here are five statements recently made by five different money managers:
* You will get your Q3 letter before the end of Q4
* No, I’m not retiring so that I can start Long Island’s first tobacco plantation
* Ball parking it, our assets under management are in the range of this figure
* If you fucksticks don’t get it together I’m going to seriously consider eliminating KFC Fridays.
* Trust me, the 3&50 is worth it. You’re on a gravy train with biscuit wheels.
According to a new study, one of them is a lie.
Say you’ve fleeced some local banks and credit unions out of 200k. It’s not a fortune, but given how hard you had to work for it, it’ll do. But the authorities are on to you and you have to make a run for it. You decide to make a run for the border- but which border? Even though you’re in Seattle and Canada is a stone’s throw away, you decide to head for warmer weather and Mexico. You hit the border and floor it to Cancun just in time for spring break. You’ve done it. The authorities can’t find you and you’re living the life. In fact, you’re having such a good time, you want all your friends to know about it. So you update your Facebook page and throw in some pearls of wisdom you’ve stumbled upon since arriving in Mexico.
8:59 Music hold. (Mozart? Whatever it is it sounds regal.)
9:03 CFO Mike Cavanagh in the house. “Great strength” in investment bank. Reading of the slides.
9:07 Wamu integration going “nicely.”
9:20 In the investment bank “we’re seeing great results in the markets biz.” Retail financial services side: “under pressure. Nothing new here.”
9:25 We’re “hearing” a lot of stuff about possible regulatory changes. We’re confident we’ll be able to handle whatever the gov throws our way.
JPMorgan Reports $3.6 Billion Profit For Third Quarter (BW)
Sayeth Jamie Dimon: “”Our net income of $3.6 billion in the quarter reflected the strong earnings power of the company, with broad-based growth across the Investment Bank, Asset Management, Commercial Banking and Retail Banking. However, credit costs remain high and are expected to stay elevated for the foreseeable future in the Consumer Lending and Card Services loan portfolios. Accordingly, we have added $2.0 billion to our consumer credit reserves, bringing the firmwide total to $31.5 billion, or 5.3%1 of total loans. Tier 1 Common Capital, another key element of our fortress balance sheet, was also strengthened through capital generation during the quarter, to $101 billion, or 8.2%.”
Wall Street On Track To Award Record Pay (WSJ)
An estimated $143,400 on average, up almost $2,000 from 2007 levels.
BofA Emails Show Pique at U.S. Over Dividends (WSJ)
Some emails show that apparently a few people at BofA weren’t happy with the government’s request to “screw shareholders.”
Who Wants A RBS Branch? (FT)
The bank has 300 or so to give away.
Blackstone See “More Than Green Shoots” Of Recovery (Reuters)
“We can certainly do transactions in the $3-$4 billion range at this stage in the cycle,” Stephen Schwarzman said yesterday. “And with low leverage involved, deals of that size can use in excess of $1 billion equity.”
Geithner Aides Reaped Millions Working for Banks, Hedge Funds (Bloomberg)
Gene Sperling got $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies (including Allen Stanford’s firm) last year; Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group.
Kitchen worker among AIG staff who received ‘retention bonuses’ (FT)
$7,700 in cash. And Ken Feinberg wants it back.
$$$ RBS is letting people look at its art as part of “a broader effort to showcase major changes at the bank.” [Reuters]
$$$ Prison Brawl: Who would you take in Madoff v. Martha? [CNBC]
$$$ Bernanke: third most powerful man in DC (Geithner/Summers tied at 7)? [GQ]
$$$ Bloomberg buying BusinessWeek [BW]
$$$ Treasury Says AIG Should Lower Retention Payments [ABC]
$$$ Citadel veterans start new firm [WSJ]
The first because he’s not a total pussy and the second because he can move. Also, according to Nick Bollettieri, the duo’s coach, Big Lar doesn’t smile when he’s playing, which makes sense considering that while he loves tennis, it ranks third among his favorite things, which are 1) drinking diet Coke and 2) sleeping during work. For those of you who’ve recently received an invite to knock some balls with Obama’s economic team, here’s what you can expect:
A quick look at Summers suggests diving for drop shots isn’t really his game, though opponents say he’s deceptively agile. The typical Summers point will start with a cannon-like serve. If the return is weak, the bulky six-footer will cut the ball off and swing for a difficult angle. Each additional shot is more likely than the last to either be out or un-returnable–the shorter the rally the better. As a player, “Larry is very tenacious … like his personality,” says Bollettieri.
It’s enough to send a chill up your spine. After insuring billions in mortgages approved without credit scoring standards, the FHA was confronted with a proposal not for the faint of heart. Possibly acknowledging Timmy G’s vision of the restrained American consumer of the future, Rep. Scott Garrett called for an increase in the down payment for FHA backed loans from 3.5% to 5%. Stunned at the suggestion that more money upfront might help counter the successes seen in the zero-down era, the head of the FHA, David Stevens, put any fears of a higher mortgage standards world to rest.
But Mr. Stevens warned against “jumping to conclusions” and making credit standards tighter just as some signs show that housing is beginning to stabilize in certain housing markets. “When I see members of Congress move a bill out that says raise it to 5%…I get very concerned,” he said. “It isn’t the down payment on its own that causes a default.”
Quite right. You need somebody willing to take on the risk of default, whether they know it or not. Like the taxpayer.
FHA Head Rejects Calls for Higher Down Payments [WSJ].
Bloomberg reports that the 2001 Mercedes-Benz E320 previously owned by the king of the prison yard will be auctioned off October 23 along with a bunch of other vehicles seized by the U.S. Marshals Service. The suggested retail value is $13,727 to $19,530 and according to Tim Minoughan, the guy running this thing, the ride won’t go for much more than that, cause it’s not “a Bentley or a Rolls Royce or something really high valued.” Also? Because car itself isn’t really tainted by the scam which is what would up the re-sale value. Bernie wasn’t screwing investors in the back seat (I think we’re in post-Sheryl Weinstein years here), so really all you’re getting is the car Ruth used out in Montauk. Which leads us to the item you will want to throw down a significant portion of your bonus on:
While the value of having a degree from Wharton is subject to debate, the value of thinking you have one and then discovering otherwise is becoming a lot clearer. Back in 2002, Frank Reynolds enrolled in a program at Penn called the Executive Masters in Technology Management, believing that Wharton’s co-sponsorship of the program meant he was destined for a degree from the business school. Having spent time, energy, and money on a program he thought would allow him to include the Wharton stamp in his business passport, Reynolds did the natural thing and sued the school when it became abundantly clear the only degree in his future was from the engineering school. A federal court jury agreed with his bait and switch contention and subsequently put a price tag on the mistaken belief of receiving a Wharton degree.
