The SEC has a history of massive fuck-ups. We know this. But, to date, many of these fuck-ups have a logical explanation. Missing Madoff’s multi-billion dollar scam for years and years? Bernie was just such a “captivating storyteller” that they got “distracted.” The whole Allied Capital thing? They though it was that wily David Einhorn, trying to throw people off his trail! Today comes word the Commission has added another notch to this particular bedpost, via letting a guy who turned himself go off and get his MBA for a few years before charging him with fraud. Read more »
Archive for September 2010
From the mailbag: Read more »
It’s common knowledge among womenfolk that when one has a big date or otherwise nerves-inducing event to attend, the best way to tame those butterflies is to wear something that makes you feel hot (and/or do some shots beforehand). When you look good you feel good and when you feel good you can focus on the task at hand. For Mike Mayo, that date is Friday, when he meets with Vikram Pandit, the man who jilted him, for the first time in two years. Read more »
Treasury Said To Prepare AIG Exit, Repayment Plan (Bloomberg)
The plan may be announced as early as this week or as late as never but regardless, just know their hearts are in the right place: The insurer’s objective is to “repay the taxpayers and position AIG, over time, as a strong, independent company worthy of investor confidence,” said Mark Herr, a spokesman for the firm.
Sizable Pay For Citi’s Prize Hire (WSJ)
Citigroup’s newest prized banker, UBS defector Stephen Trauber, has won quite a prize of his own: a pay package that could hit as much as $30 million over three years, according to people familiar with the matter. For Citi—still partly owned by the Treasury after years of woe—the hiring coup was seen as a sign the bank has grown confident it can grant hefty pay packages without fear of government objection.
Roubini Sees High Risk Of A US Recession, Says Japan Is ‘Anemic’ (Bloomberg)
“We know the second half of the year is going to be worse than the first half of the year because of the tailwinds to growth from the fiscal stimulus” turning into austerity, he said. “The main scenario is an anemic recovery, but I don’t rule out that a double-dip will occur” in the U.S., he said.
Moody’s Slashes Anglo Irish Rating (Reuters)
The rating agency said that while it still expected the government to support all grades of senior debt, the rating would remain under review for possible downgrade until a decision was made. “While Moody’s considers the likelihood of the government not supporting this (senior unsecured) debt to be very small, this risk has been reflected in the three-notch downgrade,” Ross Abercromby, lead analyst for Anglo Irish at Moody’s, said in a statement.
The CFA Chase: A Cornerstone Of Trust, No Shortcuts (Globe And Mail)
CFA v MBA? “It’s like the difference between a science degree and a medical degree. An MBA is a really broad program and the CFA is specifically about investment. The concentration of time, effort and energy into a very defined activity allows much more breadth and depth in that one area. If you’re going to be a professional in the investment business, you de facto have to have the CFA now. I would question a student who isn’t pursuing it because the CFA demonstrates a level of commitment and professionalism.”
HSBC condemns ‘diabolical’ plot to undermine Geoghegan (Independent)
Michael Geoghegan, the outgoing chief executive of HSBC, was told over dinner in London’s Goring Hotel 10 days ago that he was not to be the new chairman. But, contrary to damaging press reports Mr Geoghegan neither threatened to resign unless he got the promotion nor did he “throw his toys out of the pram.” Read more »
The past couple years have been something of a kick the pants for Vikram Pandit and certainly not what he was expecting when he agreed to take on the role of Citi CEO in exchange for almost a billion dollars, plus the keys to his lemon, otherwise known as Old Lane. Previously a smiley, jolly fellow of a sunny disposition, he lost weight and found himself in something of a funk. Then, in April, things started to look up. “Vikram is looking and sounding a lot more confident and secure,” a top lieutenant told the Times. “He has a smile on his face.” And why? “He sees the day when he is going to earn more than a $1 a year.” Today, someone felt the need to come along and knock the wind out of those sails (of hope). Read more »
The culture of the employees, the trading floor [as depicted in Money Never Sleeps]…I thought all that was pretty good, though some of the machines looked funky. And those equity guys were portrayed very accurately, like the lugheads that that know their stories on a couple of [stocks]. At Lehman the difference between equity floor and the fixed income floor was like night and day. It’s like the Harvard, MIT crowd in fixed income and then it’s like UMass on the equity floor. So many equity guys totally got blind-sided. They didn’t understand credit derivatives, and they just were so wrapped up in their own little stories.– Lawrence McDonald, managing director at Pangea Capital, previously VP of distressed debt and convertible securities trading at Lehman Brothers, and guy for whom the Wall Street sequel was “hard to watch” because it “brought back a lot of bad memories.” [TDB]
As we have discussed many times in the past, the letter to investors is an art form, especially in a down month/quarter/year. All the best shops know deflection of responsibility + rationale for losses is essential. Got your ‘nads ripped off and shoved down your throat? Naturally the explanation there is that it was due “the market’s ridiculous mispricing of equity” and investors can take solace knowing it’s just a temporary reaction– you’re still right on the numbers. But…you know…that’s what everyone says. How does one set himself apart from the pack? One word: analogies. Eleven words: Analogies likening being a steward of capital to being a bus driver.
And hey, while you’re at it– and no joke, investors LOVE this– how about a nonsensical story about driving your kids to school wherein you debate the merits of taking the GWB versus the Harlem River? Read more »
As you’re aware, late last year, Tom Hudson made the seemingly wise decision to distance himself from the Pirate Capital name and all that it stands for (including but not limited to ass-bleeding, cockminnow fights on the floor, the (spawn of) Michael Bolton, the fall-out associated from nailing the spawn of Michael Bolton, the AUM shrinkage, and the Sugar Daddy dot com). He did so by instructing the intern manning the phone at the 800 Connecticut Avenue office in Norwalk not to answer “Pirate Capital” but “Captain Jack” and, more symbolically, by putting the actual pirate that had stood in the lobby for years into storage. But he couldn’t let go of the men in eye patches just yet. Turn his back on a ridiculous, all-consuming, uncanny, really rather impressive and heretofore unmatched fetish for aquatic plunderers? I think not. So he decided to re-brand with the name Doubloon Capital, which the naive among you will assume is a reference to a poker chip when in reality it’s part of Tom-bone’s sick addiction he just can’t quit. And he didn’t stop there! Read more »