Put down the emasculators, Chris Dodd. Your plan to geld Ben Bernanke just hit a serious roadblock.
President Barack Obama sent out some of his lesser minions to make clear he wants his Federal Reserve to remain virile and whole, whether or not it’s an “abysmal failure” as a bank regulator. While Dodd says his bill would “enhance” the Fed, it very clearly does not want to swallow a pill that would strip it of its power over banks and consumer finances.
The White House doesn’t want it to, either. The amazingly-named Austan Goolsbee warned that cutting off the Fed’s cutting off the Fed “can, if you do it wrong, get into a left hand doesn’t know what the right hand is doing kind of problem in a crisis.” In other words, don’t leave the right hand without anything to do.
Archive for November 2009
There’s A Possibility Corzine Will Maybe Take Over At Bank Of America (Though Not If Dick Bové Has Anything To Say About It)
By Bess Levin
John Carney reports he’s hearing that Jon Corzine’s staff is “already prepping to take over at Bank of America.” This strikes us as slightly premature on the staff’s part, as, Carney goes on to say, “there haven’t been any formal talks” between JSC and the Bank of America board. (Also: why would Papa Bear’s employees, as in his employees while Governor, assume they’d be going with him to BAC?). If it’s true though, and this really does look like it’s going to happen, J.Co will have to first deal with Dick Bové.
By now you’re heard the devastating news that Bloomberg will not run Maria Bartiromo’s BusinessWeek column after the deal to acquire the magazine is complete. So the Money Honey’s pearls of business wisdom need a new home and, pretty clearly, that home is DealBreaker (consider this post a formal offer). We’ll keep the name, “Face Time With Maria Bartiromo,” because that’s too great to give up, but let’s talk subject matter. She’s well-equipped to pick up where Lenny Dykstra left off in educating the public about the benefits of flying private but really the possibilities are endless. Let’s get some ideas. Think outside the box. This is her moment.
Bloomberg TV has been around for years, but it has generally been considered too wonky for all but the wonkiest finance types. In the past year, however, the network has hired new on-air talent (most prominently Margaret Brennan, from CNBC), consolidated the eye-boggling number of crawls that used to clutter the bottom half of its screen, and expanded its coverage of general business news rather than focusing almost exclusively on high finance. “There’s an audience that may have been with CNBC that’s going to be attracted by the kind of presentation we’re doing,” says recently hired head of Bloomberg TV, David Rhodes.
Is Fox Business Network A Lost Cause? [Vanity Fair]
Earlier: Hottest Women In Business Television List Gets Lift
RBS Has A New Revenue Generating Plan (And It Involves Schnapps, Karaoke, And Maybe Lap Dances)
By Bess LevinA couple weeks ago RBS announced that it would be accepting a few more billion in bailout funds from the UK government. Some employees wondered why this was necessary and today we have an answer. The Telegraph reports that the bank needs the money for booze, a karaoke machine, and dancing girls. Why? First, if you need a reason for drunk karaoke, you need to reevaluate your life and second, in all seriousness, it’s because they need to get wasted on the job. The earlier the better.
Senior executives have applied for a licence for alcohol to be served from 7am and to hold karaoke events on all eight storeys of their central London offices over Christmas. The bank’s licence application submitted last week asks permission to provide liquor until midnight “for staff and/or guests at meetings, conferences, dinners and functions” at its £182 million City of London offices. It adds: “If there is a champagne breakfast meeting scheduled, the supply of alcohol may commence at 0700 hrs.”
Of course, some people, who just don’t get RBS like we do, feel the need to rag on the good time and brilliant profitability scheme.
Eddy Weatherill, of the Independent Banking Advisory Service, said: “Why do they need a licence to drink 365 days a year? That’s more like a gentleman’s club than a bank. “They must know everybody’s waiting for them to get egg on their faces, yet they apply for a licence for champagne breakfasts and karaoke. “They never cease to amaze me and the public will be incensed. They will try to spin it but it’s clear what’s going on. It’s all going to be paid for by the taxpayer in the end.”
Which is fine, but Ed should know he’s ensured he won’t be invited to take part in the lap dances.
How’s this for a novel approach: Try dealing with the financial crisis at hand, rather than worrying about the next one.
That’s the nugget of common sense offered by Charles Evans, president of the Chicago Fed, with the suspiciously socialistic backdrop of the City of Light. Like Blackrock’s Larry Fink, he’s sick and tired of hearing about the asset bubbles rising to the surface at home and abroad. His radical suggestion is to actually implement some of the mountain of regulatory changes prompted by the credit and financial crises of the last two years instead of going on a wild-goose chase.
Jim Cramer’s Bear Call Was Second Worst Prediction Of The Decade, Says Fellow CNBC Colleague (UPDATED)
By Bess LevinCNBC, like any other organization, has typically followed the rule that while you might despise your colleagues, any trash talk about them being idiots or whores is done privately. United front and all that crap.* So, for instance, we’ve yet to hear anyone from the network agree with the generally accepted belief that Jim Cramer’s bold call your money was safe with Bear Stearns back in March 2008, because “Bear Stearns is fine,” was one of his greats, and by greats we mean worst calls of all time, second only to the public declaration that Lenny Dykstra is the best money manager in town. Then this morning, we got this:
And it raises a few questions, such as:
1. Does David Faber have a death wish?
2. Is this the beginning of something beautiful, wherein everyone at CNBC just starts turning on one another?
2a. And we finally find out who leaked Maria’s high school nickname to the Post?
2b. And Sue Herrera’s true thoughts on Michelle’s Caruso Cabreras?
3. Is someone going to have his tires slashed?
4. Can we get Faber to say this to JC’s face, on air?
5. WILL JIM CRAMER ADDRESS THIS AFFRONT ON TODAY’S STOP TRADING SEGMENT? And will it go something like this, but with the word “Faber” swapped for “they”?
Cramer: Bear Stearns [Newsweek]
*Any if you absolutely must leak your feelings to the media, you do so as an anonymous source.
UPDATE: Newsweek has changed the byline to Arlyn Gajilan, one of their editors. Why? Because David Faber was asked to simply write a piece on the fall of Bear Stearns. Newsweek, we’re told, then inserted the Cramer angle and used it for the list. Faber, kind of understandably, was not happy about this, and after what was probably an awkward conversation with Cramer, the byline was changed. So Newsweek is now in the business of instigating shit which is interesting.
It seems we will have Ralph Cioffi and Matthew Tannin to kick around for a while longer. The two men may have escaped the long arm of the law, winning an acquittal on fraud and insider-trading charges earlier this week, but the SEC isn’t discouraged.
The regulator will proceed with its own case against the two former Bear Stearns hedge fund managers, SEC Enforcement Chief Robert Khuzami said. And why not? “We filed a case based on the evidence from our own investigation,” Khuzami noted, politely failing to mention the cock-up of an investigation run by the U.S. Attorney’s office. There’s also the “different standard of proof” for a civil trial, under which even the incompetent prosecutors could probably win a conviction. And finally, there are those incompetent prosecutors, lighting the way to failure.
“We will study the transcript and events at trial,” Khuzami said, then mumbling, “and do the exact opposite.”
US SEC expects to proceed with Bear Stearns case [Reuters]
Given that the bank is flush with cash and doesn’t much care what the public thinks of them (except when it comes to kittens), this obviously has nothing to do with fear of populist outcry or certain pissant Rolling Stone writers with vivid imaginations. Rather, this is coming from the top, as in The Big Man. Now that it’s out in the open re: who Lloyd Blankfein and Co. work for, there’s no need to tip-toe around why Christmas is the first to go. For anyone considering funding an event with colleagues, as previously mentioned, you can forget that, they’re also not happening (think this is a joke? Lloyd and his secret police force– the GSS– will be checking every employee’s house for trees and egg nog). For the Masters of the Universe upset about missing out on a company-funded opportunity to spend extra time with people you despise over booze, do not fear. A gala Purim party is being planned for next year.
Goldman Sachs Says No To Christmas Party [IN]
Remember when the Feds were thisclose to finally arresting Bernie Madoff’s sons and confirming all of our suspicions that the biggest Ponzi scheme ever was a family affair? Well, they still haven’t done that. But they have arrested Bernie’s IT guys.
The U.S. Attorney’s office in Manhattan has arrested two computer programmers who formerly worked for BLMIS. According to the SEC, they provided the 70-something-year-old Madoff with the technical support needed to keep a three-decade long fraud going.
Jerome O’Hara and George Perez “used their special computer skills to create sophisticated, credible and entirely phony trading records that were critical to the success of Madoff’s scheme for so many years,” the SEC’s George Canellos said. They have been charged with conspiracy and falsifying documents.
I’ve long maintained that Charlie Gasparino’s “I’m just a country reporter” image is a façade. In reality, he is a dangerous, dangerous man who, if you know anything, nearly brought Wall Street and the country to its knees. Look behind any monumental fuck-up of the past several years– nay decades– that contributed to the financial crisis and you’ll find Gasparino (convincing Bear Stearns to load up on subprime doesn’t even scratch the surface, nor does his encouraging Angelo Mozilo to “just go one shade darker”). So it’s nice to see at least one unnamed (take your best guess) Wall Street exec is agreeing with me, finally.
Charlie Gasparino’s résumé is jam-packed: on-air editor for CNBC and contributor to the Daily Beast, the New York Post and Forbes. But at least one Wall Street executive has a different description: “A monumental asshole, who added dramatically to the financial instability during ’08 and early ’09.”
Business Books [Time]
