Things have been going pretty nicely for Tony Hayward lately. He finally got taken off that bitch of a project his boss had him working on ’round the clock, thereby freeing up his time to really get out there and live life to the fullest, he was able to take in some nice yacht races and his sets at the Laugh Factory‘s latest open mic night went really, really well (NB: with the right execution, an oil spill joke can be quite the crowd pleaser). In fact, he was actually kicking around the idea of quitting his job entirely, and truly giving that stand-up a shot. Sure, it would be hard at first– this is something he’s never done this professionally, and it would be a while before he could begin to even think about possibly making a living off of it. But, he did have a nice golden parachute to look forward to, which could help the gap period before he really made it big. Or at least he thought he did. So this? Was a real kick in the pants. Continue reading »
Archive for June 2010
Deutsche Bank Co-Head Of Equities Takes Leave Of Absence After Engaging In Conduct Generally Frowned Upon
By Bess Levin
To be sure, Robert Karofsky did not have sexual intercourse with the cleaning lady on his desk at 60 Wall Street (…that we know of), but you’re getting warmer. In this case, the firm’s co-head of equities, known for his “magnetic personality,” allegedly used his pole to attract a senior trader, subordinate and close friend’s wife, which apparently no one told him when he first started at DB is something that’s not done. Maybe in other offices– Morgan Stanely, where he previously worked– but not DB. Continue reading »
The castle-dweller, who Citi got rid of last year after the public got its panties in a bunch over his $100 million bonus and Vikram found himself between a rock and a hard place (that place being the US government’s steel-toed boot, just grazing his rectum), informed clients that the fund did everything right, just not right enough.
“Unfortunately, we did not dodge the onslaught,” Mr. Hall, 59 years old, wrote in a June 1 letter to his investors. “We did reduce risk but not fast enough. We did hedge but not well enough. And we did re-enter some markets that we had exited, prematurely, as it turned out.” His commodities fund posted a decline of more than 10% last month, its weakest month in the last two years, to put it down nearly 10% this year through May, which is behind similar hedge funds. Mr. Hall was bullish as shares of commodity producers and other energy investments declined.
Lawmakers Reach Accord On Finance Rules (WSJ)
Lawmakers agreed to a provision known as the “Volcker” rule, which prohibits banks from making risky bets with their own funds. To win support from Sen. Scott Brown (R., Mass.), Democrats agreed to allow financial companies to make limited investments in areas such as hedge funds and private-equity funds. The move could require some big banks to spin off divisions, known as proprietary-trading desks, which make bets with the firms’ money. The bill also includes a provision, authored by Sen. Blanche Lincoln, which would limit the ability of federally insured banks to trade derivatives. This provision almost derailed the bill following vehement objections from New York Democrats. Ms. Lincoln worked out a deal in the early hours of Friday morning that would allow banks to trade interest-rate swaps, certain credit derivatives and others.
Frank Sticks Banks With $20 Billion Tab (Politico)
Barney Frank at 2:52 a.m. moved on to sticking the banks with the $20 billion or so bill to cover the costs of the reform legislation’s implementation. The fee would apply to banks with over $50 billion in assets and hedge funds with over $10 billion and would be assessed proportionally based on a bank’s size.
Congress Includes Ban On Box Office Trading (HR via Heidi Moore)
An amendment banning the trading of derivatives based on boxoffice results was approved just before 1 a.m. EST on Friday morning. Barney Frank said during a short discussion that while there had been controversy about movie futures, the House conferees were not going to exercise their option to alter the amendment banning movie futures trading.
John Paulson Bullish on US, Denies Subprime Culpability (CNBC)
“We had absolutely zero impact on the mortgage or credit crisis,” he told an audience at the London School of Economics on Wednesday. “Instead, that guilt lies with the mortgage brokers themselves. They only cared about generating fees, they falsified appraisals… this was the sad underbelly of mortgage finance in the US…(w)ithout us, the mortgage market would have existed exactly as it did,” Paulson said.
Goldman Sachs Reclaims Top Spot In Global M&A (Reuters)
Haters gonna hate: “Goldman would still like you to believe the firm is run by Gus Levy or John Whitehead, who was famous for saying, ‘Put the client first and the firm second.’ But now it seems like everybody is a (trading) counterparty,” Keevil said.
Liability Questions Loom For BP And Ex-Partners (NYT)
“Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations,” said Tony Hayward, BP’s chief executive, in response to a June 18 statement from one of its partners in the well. That partner, Anadarko Petroleum, has a 25 percent stake in the project, and its joint operating agreement with BP gives it a 25 percent share of the liability, a potentially ruinous amount. On June 18, Anadarko issued a blunt statement intended to distance itself from BP. “The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP’s reckless decisions and actions,” said the company’s chief executive, Jim Hackett. “Frankly, we are shocked,” he said. “BP’s behavior and actions likely represent gross negligence or willful misconduct.”
Is BP Burning Sea Turtles? (Fox)
A boat captain working to rescue sea turtles in the Gulf of Mexico says he has seen BP ships burning sea turtles and other wildlife alive. Captain Mike Ellis said in an interview that the boats are conducting controlled burns to get rid of the oil. “They drag a boom between two shrimp boats and whatever gets caught between the two boats, they circle it up and catch it on fire. Once the turtles are in there, they can’t get out,” Ellis said. Ellis said he had to cut short his three-week trip rescuing the turtles because BP quit allowing him access to rescue turtles before the burns. “They’re pretty much keeping us from doing what we need to do out there,” Ellis said. Continue reading »
$$$ Greece Puts Its Islands Up For Sale To Save Economy [Guardian]
$$$ Money Manager Ken Heebner: A Hot Touch Gone Cold [BW]
$$$ Score one for Skilling [MarketWatch]
$$$ “[The World Cup] doesn’t come even close in importance to Tiger Woods’ [tell-all] press conference,” said Craig Peckham, equity strategist on the trading floor at Jefferies in New York. “People are mindful but not zeroed in on it.”
Fortunately, this attention by the SEC has not stopped Gregory from going after the $230 million he’s owed in deferred comp.
Bring it, little man.
“You know George [Soros] is someone we all have aspired to match his brilliance but I have to tell you, you have to remember something there, the richest people on the planet become socialist. Socialism is a great thing for George. I want to bring George down. I want George’s reputation. George is now embracing socialism. What is socialism? Socialism is when you build a moat around the castle. I’m spending all of my time trying to decide where I’m going to live because of taxes are so high in the country and less of my time trying to figure out how to surpass Soros and his reputation.” [Bloomberg]
Michael Lewis Has Clearly Not Heard That In An Unprecedented Move Goldman Sachs Has Been Deigning To Speak To, Buy Sushi Lunches For Clients
By Bess Levin
Some serious crystal balls on this one.
If he had, I don’t think he would’ve made the following prediction, or the even insanely ballsier one that some GS employees will leave the firm to start hedge funds.
“This is a prediction that is going to come back and haunt me, but I think that Goldman Sachs is doomed. I don’t think that in its current form it can survive. We could be looking at four to five years, but the proprietary activities will split off, those people will end up in their own hedge fund – that is if new regulation doesn’t forbid it anyway.” The PR problems, Lewis thinks, will just be insurmountable. “Their relationships with customers on every front are poisoned, and they can’t function as an investment consultant if they have this problem of honesty.”
The Scrooge of Wall Street who says we should blame Americans [CityAM via BI]
Bank execs panic over proposed change to orderly liquidation authority (Politico via HNM)
“Bank executives were panicking last night over a proposed fix to Title II of financial reform literally penciled in at the last minute. The fear is that that the proposed change to the orderly liquidation authority could leave banks on the hook for a possible wind-down of Fannie Mae and Freddie Mac that could cost as much as $400 billion. In the House counter-offer below, Fannie and Freddie are penciled in as falling under the definition of ‘financial company,’ meaning they could be resolved by the orderly liquidation process. This process is paid for by the sale of the failing company’s assets and/or through assessments on other financial companies, possibly putting the Street in line to pay for the liquidation of the troubled housing giants.”
European diplomats clash over hedge fund clampdown (Reuters)
The stand-off is taking place shortly before EU leaders including German Chancellor Angela Merkel and French President Nicolas Sarkozy travel to Toronto for a meeting of the Group of 20 major economies. They want to champion Europe as a model for ambitious regulation but an impasse over hedge funds and watchdogs means the EU is struggling to write laws while U.S. President Barack Obama is to sign off on rules within weeks to control finance. “We need statesmanship, not brinkmanship,” said one European Union diplomat. “The stakes are too high. By parliament reaching for the impossible, we could all end up with nothing.”
Swedish Heiress Tests Kinnevik Legacy With Africa, Russia Move (Bloomberg)
When Jan Stenbeck announced his 21- year-old daughter, Cristina, would succeed him as head of Sweden’s second-largest family controlled investment firm, even she was surprised. Three years later, she was in charge. Stenbeck was 24 at the time her father died in 2002 of a heart attack and had a resume that included two years at Ralph Lauren and five years on the board of a unit of the family’s Kinnevik AB.
Trichet Explains Why Soros Is Wrong About the Euro (CNBC)
“By insisting on pro-cyclical policies, Germany is endangering the European Union,” Soros warned. “I realize that this is a grave accusation, but I am afraid it is justified.” Trichet dismissed this, saying the euro was a very credible currency that has kept its value from its debut and has guaranteed price stability for 11 and a half years, with an annual average inflation of 1.98 percent in the euro-zone in that period. “A currency that guarantees such stable prices, it’s of value in the eyes of domestic and international investors” Trichet told an Italian paper.
The massacring of Goldman Sachs vs. the jocundity of Jefferies (eF)
“Jefferies is a player, and a payer.” Continue reading »
Now’s your chance. Comp Cop Kenneth Feinberg is abandoning his post. Get it while it’s hot.
