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I mean…
“Trading floor over here lost power temporarily (I think computers and phones only) for about ten minutes. Rumor is someone clogged a toilet on 7th floor and it leaked into some communications closet on 6th floor (trading). They haven’t confirmed but that seems to be the persistent belief.”
If only CNBC were broadcasting from there live today, Steve Liesman could confirm! (And maybe lend a hand. I don’t know why, but SL seems like a guy who travels with his own plunger.)
A new proposal to tax carried interest as ordinary income was just attached to a larger tax and spending bill that could be voted on by the House as early as tomorrow.
The bill would have a huge impact on private equity, venture capital and other private partnerships that rely on carried interest as their main source of income. The move would also impact some hedge funds that pay significant long-term capital gains. Washington has been toying with the tax increase for nearly three years, but the the current bill, sponsored by Sen. Max Baucus and Rep. Sander Levin, marks the first time the Senate and the House have come together on the issue. Continue reading »
The euro keeps diving to new lows and currency traders are hoping someone, (perhaps the Swiss) will step in to stop the bleeding.
Rumors that the Swiss will move to stabilize the currency have stemmed the tide for now. The euro dropped to $1.2176 against the dollar yesterday, a new low, but has bounced back to around $1.2342 in today’s trading. Continue reading »
“Booz & Company is going to launch a large PE fund later this year.” Continue reading »
Saving Goldman Sachs
Last May, a bunch of HBS grads got together and decided to take an “MBA Oath,” promising not to do anything wrong once they were released into the world. They put a condensed version on little laminated cards to keep in their back pockets as a quick reference in case they ran into a situation that offered them the opportunity to lie, cheat, steal or short their the individual mortgages of down-on-their-luck friends in the Hamptons, and weren’t sure how to proceed. They also posed with said cards in the New York Times, looking like the members of a Christian rock band, so you knew it was serious. And yet…we still kind of thought it was just a phase, something they’d grow out of. Such is not the case! This year’s HBS grads are still feeling the need to sign a sheet of paper that says they promise to be good and not just that but they’re really kicking things up a notch with bold claims such as the following:
If Goldman Sachs’s leadership had followed the oath’s tenets, the company may not have entered into agreements to sell mortgage-backed securities that another client, New York investment company Paulson & Co., was betting against, said Khurana, the Harvard professor who worked with students in drafting the oath.
The IMF recently released a worrisome report about Japan’s growing fiscal deficits. The nation’s second-biggest economy has injected several hundred billion dollars in stimulus money into its economy in the hope of avoiding recession.
That seems to be working as Japan’s recovery is gaining strength. The IMF believes GDP will grow by about 2 percent in 2010 and 2011. But, the risk is that tax revenues are dropping and the government is racking up huge deficits. That could be a big problem down the road. Continue reading »
PS, buy bank stocks. Continue reading »
Hedge funds take notice. There’s probably going to be a flood of futures and options traders out there from MF Global looking for a job. In response to five straight quarters of losses, Jon Corzine, the firm’s new CEO, said he plans to slash the workforce by up to 15 percent, reduce compensation and freeze hiring.
“We are taking decisive action to fundamentally improve the earnings profile of this company,” Corzine said in a statement. MF Global reported a loss of $96.5 million in the quarter compared to a loss of $119.3 million a year earlier.
Trading-Firm Breakdowns Accompanied Market Crash (WSJ)
Citadel Investment Group stopped taking orders for a number of securities, according to an internal email and people familiar with the matter. Shortly after the market plunged, Citadel asked clients, including discount brokers such as E*Trade Financial Corp. and TD Ameritrade Holding Corp., to route orders elsewhere. Knight Capital Group was handling so many orders that one of its computers “just blew up,” according to a person familiar with the matter. The breakdown led to a slight delay in handling orders and affected less than 1% of the firm’s orders, the person said.
Schäuble sees financial markets out of control (FT)
Wolfgang Schäuble, Germany’s finance minister, has warned that the financial markets are “out of control” and called for “effective regulation” to ensure a properly functioning market. In an interview with the Financial Times, Mr Schäuble said markets would not work properly “if the risks and rewards are completely unbalanced”. He called for the standardisation of products, regulation of over-the-counter transactions and measures to improve transparency “for all market participants”.
Merkel warns markets over ‘honest’ regulation (FT)
“We need the financial industry to be honest with us,” she said at the opening of a high-level conference on financial market regulation in Berlin. “If we don’t get honesty, then we might not do the right thing technically, but we will do the right thing politically.”
Germany’s ‘desperate’ short ban triggers capital flight to Switzerland (Telegraph)
“As a German citizen, I wish to apologise for the stupidity of my government,” said Hans Redeker, currency chief at BNP Paribas. He said the CDS ban deprives reserve managers of a crucial hedging tool for non-securitised loans and will scare away global investors needed to soak up Club Med bonds.
Nomura Loan Chief Quits Job For Lifelong Safari Dream (Bloomberg)
“I see guys in banking in their 50s and 60s and I can tell, there’s no passion anymore,” Cortes says in a phone interview from Hong Kong, his home for the last 14 years. “My boss pointed out the next five years are the best income-generating ones of my life, but at the end of the day, it’s not all about money.” After starting luxury-tour organizer Asia to Africa Safaris with Standard Chartered Plc banker Victor Dizon in late 2002, Cortes will move to Cape Town in time for next month’s 2010 FIFA World Cup. He will pursue a personal passion and serve a growing base of customers seeking something different to another vacation in Europe or North America.
Paintings Worth $600 Million Stolen From Paris Museum (WSJ)
The paintings were “Le pigeon aux petits-pois” (The Pigeon with the Peas) by Pablo Picasso, “La Pastorale” (Pastoral) by Henri Matisse, “L’olivier près de l’Estaque” (Olive Tree near Estaque) by Georges Braque, “La femme a l’éventail” (Woman with a Fan) by Amedeo Modigliani; and “Nature-mort aux chandeliers” (Still Life with Chandeliers) by Fernand Léger. Naturally, all art collectors are suspects.
Wall St.’s Chosen Few in Obama’s Good Graces (DealBook)
Brian Moynihan, James Gorman, Kenneth Chenault, and some UBS guy (Robert Wolf) were the only execs invited to Wednesday’s state dinner. No Jamie or Lloyd. Not even a Vikram. (Ken Lewis did try, unsuccessfully, to pull a Salahi.)
Whistle Blowers Become Investment Option For Hedge Funds (NYT)
“As soon as the I.R.S. begins paying whistle-blowers, more people will realize that this is a whole new class of assets to be monetized,” Mr. Desser said. “It will be limited in size, because only a percentage of whistle-blowers will have incentive to sell. But for investors there is potential here for outsized returns.”
`Complex Prime’ Is The New Subprime for Struggling U.K. Mortgage Borrowers (Bloomberg)
U.K. mortgage lenders are offering loans to “almost prime” and “complex prime” borrowers with “minor historic credit issues” who may have experienced financial “blips.” They don’t use the word subprime. It’s a dirty little word. Continue reading »
$$$ Dimon Survives Early Heckles At AGM [FN]
$$$ Reid loses cloture vote on financial regulation [WaPo]
$$$ Goldman Sachs Made Me Feel Special [Forbes]
$$$ Goldman’s New Critics: Hedge Funds [CNBC]
$$$ Internet Gambling Debate Rages on Capitol Hill [ABC]
$$$ Billionaire Sex Offender Jeffrey Epstein Sued Over $2 Million in Fees for Victims’ Attorneys [NYLJ]
$$$ The Breaking Of Lucas Van Praag [Daily Intel]
Steve Mandala is the guy who took Merrill Lynch for $780,000, and with some of the cash, bought himself a red 2006 Ferrari F430 Spider. Prior to joining the bank, he was a broker at Maxim Group who earned about $100,000 annually. He sensed that there was some money to help himself to at Mother Merrill but didn’t think he’d be able to land the gig. So, he lied and told them he was a partner at Maxim, where he managed $300 million in assets and took home $765,000 a year. This probably would not have worked at some other firm, but Merrill was a special, special bank.
“Somehow you got them to hire you because you told them you had big-time clients?” acting state Supreme Court Justice Carol Berkman said to Mandala in court, referring to Merrill Lynch.
