Remember when Lehman went bankrupt? Good times. The thing about that was that pretty much right up until the minute Lehman filed, people like Dick Fuld and Erin Callan were going around saying things like “we stand extremely well capitalized to take advantage of these new opportunities” and “[w]e have maintained our strong liquidity and capital profiles even in this difficult environment.”
Knowing what happened next, some people thought that was kind of fucked up of them. And so a team of spoilsports including among other luminaries the Northern Ireland Local Government Officers’ Superannuation Committee sued Fuld, Callan, Joe Gregory, and a bunch of enablers like Ernst & Young (Lehman’s auditors) and UBS (who underwrote a lot of Lehman structured note offerings).
Today a federal court ruled on a motion to dismiss. It’s mostly bad news for Fuld, Callan & co., as the court let the lawsuit proceed on most of the important claims, including claims that Lehman misrepresented its net leverage using “Repo 105” transactions, lied about its “strong risk management culture with regard to the setting of risk limits” by repeatedly exceeding those limits, and misrepresented its credit-risk concentration in real estate.
But some bits of the ruling should make the ex-Lehman crowd happy: Read more »
Standard Price Is Right Rules, closest without going over, guesses in by 3:45PM. Read more »
Been dying for Donald Trump’s take on the debt ceiling talks? Today’s your lucky day! The Don recently set up a camcorder in his office and laid out his fool-proof plan, which he strongly suggests Republicans take to heart. Read more »
Will all the alternative investors please stand up, please stand up, please stand up? Read more »
Unfortunate news for the legions of Steve Cohen groupies dying to have the hedge fund manager sign their tits and/or invest** with SAC Capital– despite some wishful thinking by a few haters in the industry that he’d be negatively affected by the Feds going after a few pissant former employees for insider trading, investors have continued to throw money at the Big Guy, so much so that he’s going to have to break a few hearts. Read more »
CBO: John Boehner’s debt bill comes up short (Politico)
The first installment of $900 billion is contingent on enacting 10 year caps on annual appropriations which the leadership had hoped would save well over $1 trillion. But CBO late Tuesday came back with a report showing the legislation would reduce deficits by $850 billion when measured against the agency’s most current projections for spending.
U.S. May Have Way to Cover Bills After Deadline, for Week (NYT)
Thanks to an inflow of tax payments and maneuvering by the Treasury Department, the government can probably continue to pay all of its bills for several days after Aug. 2, providing potentially critical breathing room for Congress to raise the debt ceiling, according to estimates by several Wall Street banks and a Washington research organization. The consensus is that the government will not run short of money until Aug. 10, when it would be unable to cut millions of Social Security checks without borrowing more money.
Dunkin IPO To Fuel Coffee Wars (WSJ)
Apparently McDonald’s should watch its back.
California Secures $5.4 Billion Loan From 8 Banks (DealBook)
California has lined up a $5.4 billion loan from a group of eight banks led by Goldman Sachs as an emergency cushion if the credit markets are disrupted by a failure to raise the debt ceiling, the state’s treasurer announced on Tuesday…Bill Lockyer, California’s Democratic treasurer, said in a statement that he was concerned that the state could lose access to the bond markets if President Obama and House Republicans do not reach a deal on raising the debt ceiling by early August.
Economist: If The Tea Party Likes A Debt Deal, It Can’t Pass (CNBC)
“As the Tea Partiers are showing no indications of being willing to compromise at all, the only way a deal can be done is for moderate House Republicans—those who appreciate that default would be hugely damaging for the country—to side with Democrats to pass a bill that the Senate and the president can sign,” Ian Shepherdson, chief US economist at High Frequency Economics said in a research note on Wednesday.
Elephants never forget old friends and are social network experts (DM)
Study author Dr Shermin de Silva from the University of Pennsylvania said: ‘Elephants are able to track one another over large distances by calling to each other and using their sense of smell. ‘So the “herd” of elephants one sees at any given time is often only a fragment of a much larger social group. ‘Our work shows that they are able recognize their friends and renew these bonds even after being apart for a long time.’ The study also found that some are more sociable than others and those who had few friends tended to be loyal to them, while those with a larger circle were less so.Researchers studied more than 100 female adult Asian elephants in the Uda Walawe National Park, in Sri Lanka, for 20 months. While many kept the same friends, 16 per cent changed their ‘top five’ associates, the researchers report in the journal BMC Ecology. Read more »
$$$ House GOP revolts against Boehner plan (Washington Times)
$$$ White House: US Constitution debt option “not available” (Reuters)
$$$ Debt Crisis Frightening Enough That People Are Actually Taking the Phrase ‘Call Your Congressman’ Seriously (Daily Intel)
$$$ “Hedge-funders who bought tables at last night’s poker tournament benefitting the nonprofit Reach, which offers cash payments to high-school students who excel in AP exams, included John Sabat, a portfolio manager at SAC Capital Advisors LP; Paul Britton, head of Capstone Investment Advisors; Jacques Garibaldi, managing partner at London Park Investments LLC; and Jason Mudrick, president of Mudrick Capital Management LP, who won the tournament last year…Nine players went into the final round, one woman among them: Stephanie Sieber, who is engaged to Mudrick. She most recently worked at an eye bank.” (Bloomberg)
$$$ Syracuse degree apparently ticket to hedge fund gig (FINalternatives) Read more »
Cohn, 6-foot-3 and 220 pounds, can be intimidating, two former colleagues said. He would sometimes hike up one leg, plant his foot on a trader’s desk, his thigh close to the employee’s face, and ask how markets were doing, they said. [Bloomberg, earlier]
We’re sick of the debt ceiling too but just hear this out.
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