$$$ Robert W. Baird & Co. has a “no asshole” policy. Do you? [Fortune]
$$$ Plainfield Hedgies are Spending Lots of Time in their New Gym [GT]
$$$ From the mailbag: “The portion of JPM bonuses that were paid in stock priced yesterday. So today’s move down in financials (and 7 percent move in JPM stock price) means everyones deferred comp is immediately 7 pc lower on day one. Plus the previously-deferred comp that vests this year doesn’t price until next week.
Banks that reported and handed out bonus numbers later (GS, BAC, etc) probably haven’t priced their deferred comp stock price yet.
Not a huge deal in the long run but when you’re 25 or more pc stock it still sucks when others aren’t taking the same haircut. Thanks for choosing TODAY to speak, Mr President…”
$$$ Cravath’s Jebejian on Obama’s bank plan [The Deal]
Archive for January 2010
“Make it so that the CEO of an institution that fails, or goes to the government and needs help, really gets destroyed financially.” He also “thanks the Lord for Bernanke” and says that “Geithner is terrific.”
Good timing for Goldman to hold its conference call early, ’cause no one is talking about them anymore. We knew it was coming, but Obama’s new restrictions on banks go beyond what was expected, sending bank stocks down. Taking the fight to another level, (and trust him, he will fight) Obama described proposed reforms that would limit the size and scope of banks.
My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform. So if these folks want a fight, it’s a fight I’m ready to have.
The most stringent aspect -and what, unsurprisingly, is making Wall Street crazy angry- is the banning of prop desks at banks. The so-called Volcker Rule (“after this tall guy behind me”) will no longer allow banks to own, invest or sponsor hedge funds, private equity funds or proprietary trading operations.
The Post reports that God’s minions were so nervous about how people– the kind who throw bricks through windows, set off bombs, etc– would react to the news that they earned $5 billion in the fourth quarter that the bank brought in extra security as a precautionary measure. So scared (!!) Lloyd was that he brought in an entire carload of NYPD officers (FYI, that’s anywhere between 1 and 4 guys, which on the high end would be a lot), a bunch of barricades, and one dog who was last seen “running laps” around the building. Let’s take a closer look at the scene:
Ace “I give away Viagra” Greenberg came out of his silence today to support Lloyd & Co. (well, mostly Lloyd) who have been unfairly attacked for no valid reasons. People just don’t understand that the banking world needs superstars that need to be very well compensated and that the industry (GS) has been doing a very fine job, thank you very much, so stop harassing them.
“You don’t win the World Series and not have A-Rod” he said in a CNBC interview.
Ace also argued that banks were forced to take the TARP money and that Obama’s proposed bank tax is just “unfair, unwarranted and unprecedented.”
On the potential Glass-Steagall resurrection, Ace had just one thing to say: “The egg has been scrambled and I don’t think they can put it back in the shell.”
Regular Dealbreaker readers know that we spend a lot of time around these parts having the CFA v. MBA debate (well, not me, but some of you, amongst yourselves, in the comments, losing your shit). Today brings a point in favor of the b-school track, courtesy of Wharton. Apparently a bit of disagreement has been brewing between a group of students and the administration, re: whether or not the future business leaders of the world should be allowed to skip class in order to go on a ski trip to Park City. The administration says no, they shouldn’t, because it reflects disrespect for academic commitments, is discouraging to the faculty, creates a divide among the students going Wharton brand if this sort of thing go out to a) the rest of the Penn campus and b) the outside world in general. Obviously, the students wanting so badly to go on this trip saw things a bit differently and a dialogue ensued. For those of you who, after reading the full back and forth after the jump, would challenge the assertion that this case reflects a point for the MBA track rather than the CFA, I would ask you to show me the CFA program where you’re afforded the opportunity and downtime to say and draft stuff like:
* “The trip in no way takes away from Wharton’s rigorous analytical MBA program”
* “I honestly can’t think of a more rigorous or more analytical MBA program than Wharton’s.”
* “I am told that seasoned Wharton professors typically earn $250K or more per year. It would be nice if anyone in the administration held professors accountable for teaching quality.”
* “How can it be hard to defend the Wharton brand on the Penn campus when the Wharton brand is far more prestigious? Penn should be defending itself to us!”
Our favorite gloom-and-doomer, Nouriel Roubini, found some time between partying in St. Barth’s and pumping iron to let the world know that by the second half of the year, things might get really ugly.
“If I’m correct, by the second half of the year there’s going to be a slowdown of growth in the US, Europe and Japan. That could be the beginning of a market correction because the macroeconomic news is going to surprise on the downside.”
10:58 Hold music. “Highway To Hell” vetoed in favor of Beethoven’s Seventh Symphony (I think?).
11:02 Gerald is our “facilitator” today. Everyone say hi Gerald.
11:04 Dane Holmes, 6’8″, 260lbs, takes the mic. Forward looking statements, yada yada yada.
11:06 David Viniar in the house. Goldman made almost $5 billion last quarter, in case you were unaware.
11:09 Reading of the slides.
Bank of America ML revealed its new and exciting bonus structure yesterday, and while the dearly departed Ken Lewis would remind everyone they should be thankful they’re getting anything, unlike some people [this guy], employees are apparently not so keen on getting very little cash and stock paid out over the next decade.
The math works as follows:
If bonus is:
-> between $100k and $250k, only 35% in CASH, next 17.5% in STOCK in Aug 2010, next 17.5% in Aug 2010 in STOCK and last 30% in STOCK over 3 years
-> between $250k and $500k, only 24% in CASH, next 18% in STOCK in Aug 2010, next 18% in Aug 2011 in STOCK and last 40% in STOCK over 3 years
Employees at associate and VP level are highly disgruntled given JPM / MS and even Citi giving significantly more cash.
Goldman Posts Quarterly Profit Of $4.95 Billion (GS)
The bank beat expectations of $5.20/share with $8.20/share and did not set aside any money for compensation during Q4, instead giving $500 million to charity. Blankfein said Goldman’s strong results, “as well as recognition of the broader environment, resulted in our lowest ever compensation to net revenues ratio,” so FUCK OFF.
Proposal Is Set To Curb Bank Giants (WSJ)
It couldn’t be learned what precise limits the White House will endorse, or whether Mr. Obama will spell out the exact limits on Thursday.
Buffett: I am not buying more Posco shares (Reuters)
“I think I have to brush up on my Korean a little bit,” WB told CNBC. “I said that I like the company a lot, and I said I wished I bought more when it was a lot cheaper within the past year … It’s a wonderful company, but I don’t have plans to buy more.”
At The SEC, The System Can Be Deaf To Whistle-Blowing (WaPo)
Harry Markopolis, perhaps you know what they’re talking about?
Conan O’Brien Reaches $45 Million Exit Deal (AP)
Under the deal, which came seven months after O’Brien took the reins from Leno, O’Brien will get more than $33 million, NBC said. The rest will go to his staff in severance.
