Archive for December 2009
Nassim Taleb Swears He’s Done With This Place, Signs Off In A Huff– Who Should He Take With Him?
By Bess Levin
Nassim Taleb cannot believe– be-lieve– Ben Bernanke is going to be reappointed chairman of the Federal Reserve. He cannot believe he lives in a world where this could be allowed to happen! It’s outrageous, egregious, preposterous. Taleb is so disgusted (not at Bernanke, who has but the mind of a child, and doesn’t understand what he’s done) that he’s decided to take his black swans and leave. He knows you’ll miss him but sorry, this is too much to bear. He’s finished. Unless of course he’s forced by his publishers to do a little self-promotion, but barring that once in a lifetime event, he’s gone. Good day.
What I am seeing and hearing on the news — the reappointment of Bernanke — is too hard for me to bear. I cannot believe that we, in the 21st century, can accept living in such a society. I am not blaming Bernanke (he doesn’t even know he doesn’t understand how things work or that the tools he uses are not empirical); it is the Senators appointing him who are totally irresponsible — as if we promoted every doctor who caused malpractice. The world has never, never been as fragile. Economics make homeopath and alternative healers look empirical and scientific.
They may have their differences on other matters, but Jim Cramer and Dubai leader Sheikh Mohammed bin Rashid al-Maktoum are of a piece on the issue of what people understand.
In a word: Nothing.
You might think JPMorgan Chase got everything in the Washington Mutual deal, which briefly accomplished the impossible by doubling the number of Chase branches in New York City. But the wily Jamie Dimon isn’t finished: He wants WaMu to pay him for the pleasure of owning their crappy bank.
JPMorgan and the “carcass” of WaMu’s parent are fighting over the scraps. The former thinks $1.9 billion was way too much for WaMu, preferring that the latter effectively pay it $2 billion for taking the bank of its hands. The carcass thinks that money should go to its creditors. The courts have yet to decide.
Lloyd Blankfein and Gary Cohn, daring you to even suggest their exposure to AIG was anything but immaterial. Don’t say it. Don’t even think it. You are, however, welcome to suck on their prestige. [Annie Leibovitz, Vanity Fair]
“AIG continues to make good on its commitment to pay the American people back,” the one-time insurance giant and current liquidation special’s CEO said today. Its customers may be a different story.
AIG announced that it has reduced its debt to the federal government by $25 billion–it now owes slightly less than $100 billion–giving the New York Fed big preferred stakes in a pair of subsidiaries it plans to sell off in the not-too-distant future. Another piece of AIG is also set to go, with a bid on its way for the insurer’s aviation-leasing business, International Lease Finance Corp.
Peachy. Too bad things are not going as well as planned at the firm’s flagship insurance business, renamed Chartis to help eliminate that awful Hank Greenberg smell. Seems it may be looking at a $12 billion shortfall, which makes AIG’s proclamations of the soundness of its insurance business sound, to this untrained ear, rather like a lie.
Arming Goldman With Pistols Against Public (Bloomberg)
Alice Schroeder on Goldman employees packing heat: “I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
Somali sea gangs lure investors at pirate lair (Reuters)
“Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 ‘maritime companies’ and now we are hosting 72. Ten of them have so far been successful at hijacking,” a wealthy former pirate named Mohammed said. “The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials … we’ve made piracy a community activity.”
Arrest Imminent In Florida Ponzi Case (Reuters)
Scott Rothstein is expected to be cuffed today.
WaMu The Bank Is Gone, But The Parent Fights On (WSJ)
A federal bankruptcy judge is expected to rule soon on who owns about $4 billion claimed by both J.P. Morgan Chase & Co., which bought the doomed financial institution from the Federal Deposit Insurance Corp., and the Seattle thrift’s holding company, Washington Mutual Inc.
SEC Watchdog Eyes Insider Trading Probe (NYT)
Inspector General David Kotz’s office said it is looking at a complaint that SEC staff had access to specific evidence that insider trading had occurred prior to staff closing the investigation, and whether the enforcement staff “committed acts of negligence.”
