Archive for July 2010

As has been previously mentioned, Connecticut Governor Jodi Rell wants a piece of New York-based hedge fund managers who don’t reside in the state. Earlier in the month she saw an opening when Albany proposed laying a $50 million tax on those managers only doing business in the state and she pounced. She started off by sending them a “simple yet heartfelt message” (which was “Connecticut welcomes you”). She then upped the ante last week by inviting them to not just a steak dinner but “an intimate dinner” (yes, intimate, now). “We have much to discuss! The meeting will be intimate, direct and private,” she said, maybe overselling. She set the date for August 2 and while it wasn’t clear whether anyone had RSVP’ed, Rell could just feel it was going to be a big night. Now, because he is a jerk, David Patterson has all but ruined Rell’s plans. Read more »

Let’s Talk About: CFA Results

Are you among the 42 and 39 percent, respectively, relieved? What will you be doing to celebrate? Running out and buying the next level of books during lunch? Not as lucky? Feeling like you just threw away the last four to six months of your life? Want to get angry? Want to make someone pay? Wanna see the institutes denial of your quest to put their precious three letters next to your name with three letters of your own? Read more »

  • 26 Jul 2010 at 8:30 AM

Opening Bell: 07.26.10

Deutsche Bank Second-Quarter Net May Fall on Trading Slowdown (Bloomberg)
Net income probably slipped to 1.05 billion euros ($1.35 billion) from 1.09 billion euros a year earlier and 1.76 billion euros in the previous quarter, according to the average estimate of 16 analysts surveyed by Bloomberg.

Citigroup’s Risk Chief Learned The Hard Way (WSJ)
As an options trader for Morgan Stanley in 1992, Brian Leach bet wrongly that European government bonds would track British government debt. He lost a half-year’s worth of his trading profit after the surprise election of British Prime Minister John Major’s Conservative party. Now, he is trying to apply at Citigroup one lesson he learned from the incident: quickly cutting losses. “It really helped define for me what downsides could look like,” he says—particularly from extreme events that disrupt historical pricing models.At Brown University, Mr. Leach excelled at wrestling in the 134-pound weight class, showing “good quickness,” says his coach, Joe Wirth. “In wrestling, there are multiple OK moves and one wrong move,” Mr. Leach says. In risk management, “there are a fair amount of things that are actually OK but there is usually one thing that you can’t do. And you’ve got to be able to understand what that is.”

Embattled BP Chief To Exit (WSJ)
The BP board is scheduled to meet Monday to discuss and approve Mr. Hayward’s departure, these people said, one describing the decision as “mutual.”

Stress Tests Show Banks’ Strength, Weren’t Too Soft, EU Policy Makers Say (Bloomberg)
“The French banking system once again shows its capacity to resist crises,” Bank of France Governor Christian Noyer said yesterday after the four largest French banks were ruled to have enough capital to outlast an economic slump and sovereign debt crisis. In Germany, where Hypo Real Estate Holding AG was the only one of 14 banks to fail the test, the Bundesbank and financial regulator BaFin said the “banking system has shown itself to be robust and proved its resilience.”

Jim Rogers: Stress Test Is a PR Exercise (CNBC)
“Just as was America’s,” Rogers said. (He went there.)

In Trader’s Cocoa Binge, Fear For Chocolate Lovers (NYT)
Anthony Ward, 50, is not some rabid chocoholic, former employees say. He simply has a head for cocoa. And, through his private investment firm, Armajaro, he now controls a cache equal to 7 percent of annual cocoa production worldwide, a big enough chunk to sway prices. His play has some people up in arms. While some see it as a simple bet that cocoa prices will rise on falling supply, others say Mr. Ward has created a shortage of cocoa simply to drive up the price himself. The German Cocoa Trade Association and others wrote an angry letter to the London exchange on which cocoa is traded, demanding that it take action against what the association characterized as a “manipulation.” The British news media has christened Mr. Ward “Chocolate Finger,” a nod to the Bond villain Auric Goldfinger. And on Facebook, someone has created a “Choc Finger” page featuring Mr. Ward’s face superimposed on a pig that is bellying up to the trough.

Goldman Threatened With Audit (FT)
“We have a deep level of questioning about whether we’re getting the straight scoop here and whether Goldman is working with us on information that they surely have,” said Phil Angelides.

Russian spy ring meets with Prime Minister Vladimir Putin for singalong (NYDN)
“I met them,” Putin told a group of journalists asking questions about the 10 Russian spies deported from the U.S. earlier this month. Putin said they sang songs accompanied by live music, including the famous Russian ditty “What Motherland Starts From,” the Russian news agency RIA Novosti reported. The Prime Minister was pleased with the crew of busted snoops and said he thinks they’ll readjust to life in Russia just fine. “They will work,” he said. “I have no doubts they will have interesting, bright lives.” Read more »

  • 23 Jul 2010 at 5:34 PM

Write-Offs: 07.23.10

$$$ Four Arrested In (Long Island) New York Bank Fraud Scheme [WSJ]

$$$ Stress Tests Show Regulators Won’t Clobber Banks [CNBC]

$$$ Cuomo Reopens Probe of AIG’s Cassano [Bloomberg] Read more »

  • 23 Jul 2010 at 5:05 PM

Should We Hold Out Hope For The Goldman Documentary?

Please?

Probably not, but hear me out. Goldman is making a documentary about itself. Here’s why we really shouldn’t give rat’s ass: because Goldman is “paying for the film, has editorial control and is overseeing the project through its marketing department.” Also, it will only be distributed to employees, as a sort of pick me up of sorts, that Lloyd can watch when he’s feeling a bit melancholy or in the event of another really bad day. The bank has hired a real filmmaker, Ric Burns, to make the thing, which is kind of like asking the Coen Brothers to tape your son’s Bar Mitzvah. So, the very serious odds are the thing is going to suck, if you were looking for any sort of drama, intrigue, conflict or humor. But. As one guy told the Journal, it is quite strange for Burns to take on this project. Read more »

A couple months back we offered some advice to those considering taking up the insider trading game. It was that you strongly consider a) NOT discussing your activities with your spouse or b) vow now, no matter how bad it gets, to stay married to this guy or girl, ’cause if you don’t he/she will throw it all back in your face in an attempt to get you nailed to the wall. If you don’t listen to every damn word we have to say, we can’t help you. You’ve made your bed, etc. Now here’s a little 411 for the other side: should your marriage fall apart, and should you have an inkling your former partner was trading on some material non-public information, and should you be looking for a little payback in the form of cash-money– would one million dollars do the trick?

As many of you are aware, most Goldman applicants are interviewed at least 20 times before they are made an offer and some more than 30. To that end, a couple months back we instituted a new series re: what to expect during various rounds of your GS vetting. The last time we met, we discussed what a candidate “auditioning” (that’s what they call it at GS) had to look forward to in round 15: role-playing. Today, we’ve made it to the big 2-7. By this point you’re probably getting pretty cocky and have some level of assurance you’ll get the job, which is exactly what they want you to think. Then they hit you with a 1-2 punch you definitely wouldn’t have seen coming unless you’d read it here first. Any chop-shop can ask some stupid question about basketballs and cows but GS has taken the “how good a problem-solver is s/he” model to the next level. According to footage obtained via a camera we stashed in a potted plant of a conference room at 200 West, the first thing they’re going to ask you (and at this stage in the game it’s probably Gary Cohn doing the questioning) is, “Do you have any experience as a mascot?” The correct answer is “No, but I like dancing around in front of my mirror.” Then they’re gonna ask you to get into a suit and turn on some music. ‘Cause they wanna see you sweat. Read more »

  • 23 Jul 2010 at 3:08 PM

Who Wants To Be Bill Ackman’s CEO?

It’s not a hedge fund gig, per se, but you will be working directly for the Big Kahuna. Ackman and his wife Karen are looking for someone to run the Pershing Square Charitable Foundation, which has about $55 million in assets and through grants does lots of good stuff for humanity (PSCF has aided farmers in Africa, helped New York high school kids pass the AP exams, etc, etc). Interested? Here’s what they’re looking for in a CEO: Read more »