Eeevil conspiracy theory source The Carlyle Group filed for its IPO today, which makes sense because the best time to file for an IPO is during a global financial meltdown (better than filing in normal times and launching your roadshow into a meltdown, or not). The not so great news: they’re too private equity-y for some people. Bloomberg reports:
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Archive for September 2011
Carlyle Group Spends Too Much Time Being A Private Equity Firm For Some People’s Liking
By Matt Levine
Apparently Bri-Moy didn’t care for Ken Lewis’ hire. Continue reading »
“I thought a few months ago that the perfect storm would be 2013,” Roubini said in an interview in London today. “But now, the economic weakness in the U.S., euro zone and the U.K. is front loaded. So we’re going to double dip earlier. The climax of it could be 2013, or it could be already earlier. It depends on what policy tools are available.” [Bloomberg]
How Much Money Will Fannie And Freddie Get From Banks For Crappy Mortgages, Use To Make Further Crappy Mortgages?
By Matt Levine
The Federal Housing Finance Agency’s lawsuits against every bank paint a pretty dastardly picture of the seventeen big banks – three of which are now BofA – committing all sorts of frauds in securitizing mortgages and selling them to Fannie Mae and Freddie Mac. This in turn caused Fannie and Freddie to have a series of accidents that left them wards of the state under FHFA conservatorship. FHFA’s lawyers are thorough, quoting among other people the Financial Crisis Inquiry Commission, SEC investigations and suits, and even Matt Taibbi. One thing they don’t do, however, is give any hint of how much money they’re looking for.
Others have jumped in to do the math for them. A popular approach, taken by FT Alphaville and Nomura, guesstimates that the damages will be around 20% of the original principal amount. The reason for this is that it seems to be the amount claimed by FHFA in its suit filed against UBS in July – there, FHFA sought $900 million on $4.5bn notional of mortgages. As the total claims against all the banks are around $200 billion, that gets $40bn of potential damages.
Keefe Bruyette & Woods has a higher estimate of $60 billion. They note that the potential liability is for “rescission”: if the FHFA proves that the banks lied materially in their prospectuses, then the banks are on the hook to buy back the mortgages at par, and thus are at risk even for losses due to the general housing market downturn and unrelated to shoddy underwriting.
Goldman has a note out today that uses two methods – the 20% UBS precedent, and the precedent of the proposed $8.5 billion settlement that Bank of America negotiated with its non-FHFA private label mortgage investors:
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A blind item. Continue reading »
John F. W. Rogers, some say, is “the single most powerful person at Goldman Sachs,” and has been for the last decade. The man behind the man behind the man. The Wizard of GS. The guy who Lloyd Blankfein was actually referring to when he said “We’re just doing god’s work.” Known as a “master tactician with a long record of behind-the-scenes accomplishments…for whom invisibility is part of a master plan,” Rogers, who came to the firm from Washington in 1994 with zero Wall Street experience, is an executive officer who sits on the management committee and has served as “chief of staff” to three CEOs: Blankfein, Paulson and Corzine, JSC being his first, on the recommendation of Bob Rubin. While his title is somewhat vague, Rogers is known as “the foremost guardian of Goldman’s partnership culture,” a man with not just gold-plated balls but crystal ones (“He said there would be some investigations and we would likely be the primary focus,” says Lucas van Praag. “He was right.”) and the guy you don’t want to fuck with (“If wronged, his vengeance can kill careers.”). Not convinced? Then answer this: would a guy with anything less than god-like power be able to pull off this? Continue reading »
Tiger Woods’ alpha mistress, Rachel Uchitel, said the 9/11 death of her former fiance, investment banker James Andrew O’Grady, was meant to be. “I believe Andy was meant to die because he was too good,” she tells Page Six Magazine, in The Post on Thursday. “I’m almost happy it ended the way it did because I’ve learned so many lessons from him. It would have been tragic if we got into fights and then divorced.” Had O’Grady lived, Uchitel — who went on to reportedly make $500,000 a year working as a VIP hostess at Tao Las Vegas and at New York’s The Griffin, where she met Woods — believes her life would have been much different. “I would be a fat housewife with three kids in Sands Point, LI,” she tells the magazine. [NYP via Daily Intel]
He’s onto you. He’s onto all of you. Continue reading »
Remember last week, when Deutsche Bank said a report they plan to save between 1 billion euros ($1.43 billion) and 2 billion euros a year and “win market shares” by purging employees was total BS? According to CEO Josef Ackerman, it’s more like 50 percent BS/50 percent not so much BS. Continue reading »
Swiss National Bank Pledges Unlimited Currency Purchases (Bloomberg)
The Swiss central bank imposed a ceiling on the franc’s exchange rate for the first time in more than three decades and pledged to defend the target with the “utmost determination.” The Swiss National Bank is “aiming for a substantial and sustained weakening of the franc,” the Zurich-based bank said in an e-mailed statement today. “With immediate effect, it will no longer tolerate a euro-franc exchange rate below the minimum rate of 1.20 francs” and “is prepared to buy foreign currency in unlimited quantities.”
El-Erian: Tuesdays Market Preview Not Pretty (CNBC)
E-E: “To state the obvious, it is shaping up to be a difficult return for U.S. markets after the Labor Day break as European stock plunge and the European Central Bank loses some of the control it has been exercising on the Euro-zone’s sovereign bond market.”
US Banks Offered Deal Over Robosigning Lawsuits (FT)
According to five people with direct knowledge of the discussions, state prosecutors have proposed settlement language in the “robosigning” case that also might release the companies from legal liability for wrongful securitization practices.
SocGen Deals Eyed By Libya (WSJ)
The French bank paid an unspecified amount to a Panama-registered company, Leinada Inc., to help structure and advise a $1 billion investment vehicle in 2008, according to deal-related documents reviewed by The Wall Street Journal. Leinada’s exact role isn’t clear, but the company’s involvement was criticized by some officials at Libya’s sovereign-wealth fund before fighting engulfed the country.
What Did Fannie, Freddie Know? (WSJ)
The 17 lawsuits filed Friday by federal regulators against some of the world’s biggest financial institutions hinge on a simple premise: The mortgage loans that banks packaged into securities often didn’t meet the underwriting guidelines the banks outlined in their securities filings. The lawsuits, filed by the Federal Housing Finance Agency, allege that the banks made untrue statements and omitted key facts when they sold mortgage investments to loan giants Fannie Mae and Freddie Mac.
Zoellick says double-dip recession unlikely (Reuters)
“I don’t believe that the United States or the world will go into a double-dip but there’s high degrees of uncertainty,” World Bank President Robert Zoellick told reporters in Singapore.
Aussie bodyboarder dies after shark bites off legs (AP)
A shark bit the legs off a bodyboarder at a popular surfing spot in western Australia on Sunday, killing the man, police said. Authorities were searching for the shark as well as the man’s missing limbs. The man in his early 20s was bodyboarding with five friends when the shark attacked, a police spokesman said. He died at the scene in the surfing haven known as The Farm, off Bunker Bay near the western town of Dunsborough. The beach was closed after the attack. Continue reading »
$$$ Economists React: ‘Disturbing’ Way to Start Labor Day Weekend (WSJ)
$$$ Obama scraps smog rules opposed by business (AP)
$$$ Goldman’s report on the world ending (ZH)
$$$ IMF Said to oppose push for Greek collateral (Bloomberg)
$$$ How To Turn In Your Neighbors To The IRS (WSJ)
$$$ T.I. back in federal custody after using luxury bus to report to halfway house (NYDN)
$$$ That’s it for us today. Have a great weekend and we’ll see you Tuesday! Continue reading »
