Archive for April 2010

  • 21 Apr 2010 at 11:15 AM

Having Made Some Money For The First Time In A While, Citigroup Higher-Ups Free To Focus On The Real Issues

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So you're saying the latex bodysuit would not work for you, Dick?

As you might’ve noticed, things are on the up and up at Citi. The firm actually turned a ($4.4 billion) profit, the government said it would remove its foot from Vikram’s ass, and hey, did you hear? The bank has nothing to do with the shit going down at Goldman. What’s more, Pandit is his shiny, happy self again, now that the day when he’ll earn more than a $1 a year is in sight. To celebrate all this joyous news, Prince Alwaleed flew in his li’l CEO that could to enjoy a little hookah and to gift him with his own falcon. But lest Uncle Vik get too excited about all the good stuff that’s been going on, lest he forget for one second who he works for, lest he think to himself that he’s such a great chief exec that he can start making quirky sartorial choices that will be overlooked due to his immense talent, Citigroup chairman Dick Parsons is here to say ah, ah, ah, not so fast my little Pandito. You may have eked out a profit from this bitch for the first time in forever, but that doesn’t mean that you, my little friend, will get a free pass when dressing like shit. Read more »

Opening Bell: 04.21.10

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Morgan Stanley Tops Estimates (MarketWatch)
MS reported income of $1.8 billion, or $1.03 per diluted share, from continuing operations applicable to Morgan Stanley for the first quarter ended March 31, 2010, compared with a loss of $17 million, or $0.41 per diluted share, for the same period a year ago. Net revenues were $9.1 billion for the current quarter, compared with $2.9 billion a year ago.

Wells Fargo Posts $2.5 Billion Profit (CNN Money)
First-quarter net income of $2.5 billion, or 45 cents per share, for the first three months of 2010. That’s down from net income of $3.05 billion, or 56 cents per share, in the first quarter of 2009. Analysts had forecast earnings of 42 cents per share, according to Thomson Reuters.

Paulson Confronts Goldman Fallout (WSJ)
Paulson held a conference call with about 100 investors late Monday and sent a letter to investors Tuesday night saying that in 2007 his firm wasn’t seen as an experienced mortgage investor, and that “many of the most sophisticated investors in the world” were “more than willing to bet against us.”

Government Has Testimony From Former Paulson Official That Contradicts Its Case (CNBC)
Steve Liesman: “In an interview with Paolo Pellegrini, a government official asked him about a meeting with ACA CDO manager Laura Schwartz, who he told Paulson and Co was interested in taking a short position in Abacus. The SEC does not mention this information in its complaint.”

SEC Weighs Rules On ‘Masking’ Bank Debt (WSJ)
Ms. Schapiro said the commission is gathering detailed information from large banks, “so that we don’t just have them dress up the balance sheet for quarter end and then have dramatic increases during the course of the quarter.” She added: “We are considering whether…we need new rules to prevent sort of the masking of debt or liquidity at quarter end, as we saw Lehman do with the Repo 105 transaction.”

Largest Hedge Fund Political Donations Go to Democrats (ABC)
With $94,100 in contributions over the past year, Jim Simons is the single largest political donor among hedge fund managers. Simons gave almost all of that total to Democrats, including Senators Harry Reid, Chris Dodd, and Charles Schumer. Eric Mindich gave $89,600, all to Democrats, including Reid, Dodd and Kirsten Gillibrand. Steve Cohen gave $68,400, all but $4,800 of which went to Republicans, including Eric Cantor and John Ensign. Cliff Asness donated $71,600 to Republicans, including $30,400 to the National Republican Senatorial Committee. Asness gave Dodd $490.

Woman gets Chinese accent after bad migraine: reports (SMH)
A British woman has suddenly started speaking with a Chinese accent after suffering a severe migraine, she said in comments quoted by British media on Tuesday. Sarah Colwill believes she has foreign accent syndrome, which has caused her distinctive West Country drawl to be replaced with a Chinese twang, even though she has never even visited the country. Read more »

  • 20 Apr 2010 at 6:10 PM

Write-Offs: 04.20.10

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$$$ Ex-Goldman Employee Surfaces In SEC Complaint [Reuters]

$$$ Paulson Fund IPO Delayed After Goldman Sachs Charges [WSJ]

$$$ Buy, Sell Or Hold (It In) [CNBC]

$$$ Eliot Spitzer Seeking Acceptance
 [ATL]

$$$ Goldman Sachs ‘Had Duty’ to Keep Paulson Bets Secret [BW]

  • 20 Apr 2010 at 5:40 PM

Does Dick Fuld Know How to Answer Questions?

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Apparently not. The former Lehman CEO devolved into long soliloquies about the history of the bankrupt firm, took long pauses and seemed generally delusional in his testimony in front of the House Financial Services Committee this afternoon. Here’s a recap of Fuld’s bizarreness:

The most peculiar answer: “We were risk averse,” Fuld says in response to a question about why the firm failed. He chalks the losses up to “terrible timing” on commercial real estate investments. Still, at the end, Fuld says there was “no capital hole.” “We could not convince the world about the [good] position we were in.” He also blamed naked short sellers, again.

Asked if 30 to 1 leverage seemed risk averse to him, Fuld said 30 to 1 was a misconception. (It seems as though he really believes this.) Read more »

  • 20 Apr 2010 at 3:34 PM

SEC Nails Investment Firm For Failing To Tell Investors About The Strippers

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Listen. I get the SEC has to make up for their many, many past fuck-ups. And some people’s scams are actually worthy of being shut down, especially when whoever is running it is spending his/her ill-gotten gains on entirely selfish purchases that will make only them happy and no one else. But what of the con-artists who, while perhaps not running the most legit shops, are taking whatever money they’ve stolen and using it to spread joy far and wide in the form of, for instance, “sexually themed cruises”? Apparently the SEC sees no distinction when, to us, it’s black, white and wearing boob tassels.

The Securities and Exchange Commission today filed an emergency enforcement action to halt a fraudulent scheme being orchestrated by two co-owners of an Albany, N.Y.-based firm who misused investor money to fund their struggling business operations and meet ever-increasing liquidity needs. The SEC has obtained a court order to freeze their assets.

Read more »

  • 20 Apr 2010 at 3:07 PM

Goldman Sachs De-Registers Mr. Fantabulous In UK

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First off, nobody’s doing this because they’re mad at him. It should be reiterated that while Goldman did indeed strip Fabrice Tourre of something somewhat essential to working with clients, they only did so because he’s on his voluntary leave and won’t be needing it right now. He’s off in France, working through some stuff, and when he’s ready to rejoin his colleagues, they’ll be happy to have him back. Although– and I’m not saying anyone would even think such a thing– on the off chance Lloyd decides GS is already busting at the seams with fabulousness and couldn’t possibly pack anymore in, it would be a good idea for Tourre to have a Plan B. A hedge fund would be the safe option (and he should have no problem raising cash, what with his famous reach-around) but let’s think outside of the box on this one. What’s FabTo’s next career move?

  • 20 Apr 2010 at 12:55 PM

Judge Jed Approves Schottenfeld Settlement

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Federal District Court Judge Jed Rakoff has approved the SEC’s settlement with Schottenfeld Group, a trading firm that once employed three traders charged in the Galleon insider trading case.

The settlement seemed shaky after Judge Jed requested more information from the SEC about how regulators came up with the $460,475.28 they say Schottenfeld needs to pay in disgorgement fees. Read more »

  • 20 Apr 2010 at 12:32 PM

Fab The Fantabulous Spending ‘Me Time’ In France

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As previously mentioned, the most Fantabulous banker at Goldman Sachs, Fabrice Tourre, took a completely and totally voluntary leave of absence yesterday from his gig at the bank’s London office. He reportedly took off for France soon after the news of his involvement in the scandal du jour broke, perhaps to weep into a pillow in his childhood bed while being comforted by mother. That, and to escape the British politicians giving him shit for potentially receiving a bonus well-deserved.

A Goldman Sachs banker facing fraud charges is in line for a massive bonus, it emerged yesterday. The bank said the 31-year-old Frenchborn broker has done ‘nothing wrong’ and there was no need to suspend him during the American investigation. It means Mr Tourre, who moved from the U.S. to London in 2008, can claim a sizeable slice of the £3.2billion bonus bonanza expected to be announced by the Wall Street giant today.

Read more »

  • 20 Apr 2010 at 10:45 AM

Michael Douglas Is Ready For The SEC To Wake Up

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The noted investor has finally– finally!– weighed in on the Goldman charges. Read more »

  • 20 Apr 2010 at 10:20 AM

SEC Nears Settlement in Pequot Insider Trading Case

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On the heels of the SEC’s action against Goldman Sachs, Wall Street’s top cop is nearing the conclusion of a high-profile insider trading case that has simmered for over five years.

According to several sources close to the case, the SEC is in final negotiations to settle insider trading charges against Pequot Capital Management, over a year after it issued the firm and its founder, Arthur Samberg a so-called Wells notice, indicating the agency was going to formally charge the firm.

It’s unclear what the final settlement will be, but sources said the two sides have recently discussed an agreement that includes a total of about $25 million in fines with Pequot neither admitting nor denying wrongdoing.

Read more »

Opening Bell: 04.20.10

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Goldman Sachs Profit Doubles (MarketWatch)
Goldman’s first-quarter net income rose to $3.3 billion, or $5.59 a share, from $1.66 billion, or $3.39 a share, in the year-ago period. The investment bank’s revenue rose to $12.78 billion from $9.43 billion. Wall Street analysts expected earnings of $4.16 a share and revenue of $11 billion, according to a survey by FactSet Research. “Our performance in the first quarter reflects more signs of growth across the economy and the strength of our client franchise,” said CEO Lloyd C. Blankfein. “In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people.”

Goldman Employees Rally Around Blankfein (NYT)
GS say step off, bitches: “Goldman employees are shocked, even angry, that the Securities and Exchange Commission has filed a civil fraud suit against their bank. Goldman is ready for a fight, and Mr. Blankfein, his defenders insist, will prevail.”

Mortgage Deal Got Rapid Approval By Goldman Panel (WSJ)
The SEC complaint doesn’t name any of the members of the mortgage committee at the time. But it alleges that a memorandum by the committee the day it approved the deal shows it had full knowledge of Mr. Paulson’s role in selecting the deal’s investments. The March 12, 2007, memo by the committee said: “Goldman is effectively working an order for Paulson to buy protection on specific layers of the [deal's] capital structure.”

AIG Eyes Action on Goldman over $2 Billion CDO Losses (CNBC)
If AIG and others discover that their transactions had disclosure issues similar to those alleged in the SEC charges, they would be able to complain to the SEC, file a private lawsuit, or both, lawyers said.

Lehman Brothers Lashes Out At Goldman, SAC (NYP)
In addition to Goldman and SAC Capital, Lehman, which remains in bankruptcy, issued subpoenas to Citadel, Och-Ziff Capital Management and Greenlight Capital. The firms have until the middle of May to respond re: whether or not they’re interested in taking the blame for Lehman’s failure.

Larry King may talk his way out of divorce: Calls two-week truce with estranged wife Shawn Southwick (NYDN)
Asked Sunday if he and Southwick were reconciling, King said “you never know,” TMZ reported. King admitted in a 1997 TV Guide interview that the couple didn’t sign a prenup. Read more »