Is someone afraid of the Mayo Jar? Continue reading »
Archive for October 2011
You could probably think a few things about GS’s earnings released this morning. If you’re an employee, you might gulp nervously at that $292k comp accrual so far and the 1,300 folks whose mastery of the universe became less masterful this quarter. If you’re a shareholder, you have to be modestly pleased with mostly adequate revenues in most businesses though kind of pissed about ICBC. If you’re an accounting purist, you thrill to the idea of a bank that managed not to book billions in DVA gains.
Here, though, is a thing not to think: “Goldman Sachs lost money by doing all of the things the Volcker Rule says it shouldn’t be doing.”
Continue reading »
Mayor Michael Bloomberg has said he supports the protesters’ free-speech rights as long as they don’t violate the law. He said he’ll defer to the owner of Zuccotti Park, Brookfield Office Properties Inc., to determine how long the demonstrators can stay. Brookfield’s park rules forbid camping, lying on benches, and using tarps and tents…“I’m 100 percent in favor of protecting — 1,000 percent in favor — of giving people rights to say things, but also we have to protect those who don’t want to say anything,” Bloomberg said today at a press briefing in Queens. “There are places where I think it’s appropriate to express yourself and then there are other places that are appropriate to set up a tent city, and they don’t necessarily have to be one and the same,” he said. “The Constitution doesn’t protect tents, it protects speech and assembly.” [Bloomberg]
-
Posted in:
insider-trading
Thirty Months From Now, Danielle Chiesi Could Be Working You For Stock Tips While She Works On Your Cuticles
By Bess Levin
This afternoon, Danielle Chiesi will report to a West Virginia prison for a 30-month stay, for her role in the Galleon insider trading case, wherein she passed valuable tips on to Raj Rajaratnam after the tech execs she worked closely with passed her a few of their own. Chiesi will be bunking at Federal Prison Camp Alderson (former home of Martha Stewart, where “women hide sugar packets and crackers in their socks and conceal larger items like eggs under their shirts”), and while Bloomberg reports that the former beauty queen/Newscastle analyst won’t be living alongside ‘sadistic crack-selling lesbian rapists‘ (“It’s more college campus than Chained Heat, the 1983 exploitation film about women in jail” we’re assured), there may still be a few aspects of prison life about which D-Chi (“they give each other nicknames,” says one former resident) will be less than thrilled. Such as: Continue reading »
Goldman Sachs Posts Third Quarter Loss (Bloomberg)
he third-quarter loss of $393 million, or 84 cents per share, compared with a profit of $1.9 billion, or $2.98, a year earlier, the New York-based company said today in a statement. The average estimate of 26 analysts surveyed by Bloomberg was for an 11-cent loss per share, with estimates ranging from a $1.02 loss to a $1.22 profit. The company, which said in July that it planned to cut about 1,000 jobs to reduce annual costs by $1.2 billion, said it employed 34,200 people at the end of September, down 1,300 from the end of June. Investing and Lending, the segment that includes Goldman Sachs’s stakes in Industrial & Commercial Bank of China Ltd. and other companies, as well as holdings by the Special Situations Group run by Jason M. Brown, reported negative revenue of $2.48 billion for the quarter. That compared with revenue of $1.04 billion in the second quarter and $1.8 billion in the third quarter of 2010. Goldman Sachs’s third-quarter revenue fell 60 percent to $3.59 billion from $8.9 billion a year earlier and declined 51 percent from $7.28 billion in the second quarter. The company’s book value per common share decreased to $131.09 from $131.44 at the end of the second quarter.
BofA Swings To Profit In Muddled Quarter (WSJ)
Overall, the Charlotte, N.C., bank reported a profit of $6.23 billion, compared with a year-earlier loss of $7.3 billion. On a per-share basis, which includes the payment of preferred dividends, the bank reported earnings of 56 cents compared with a loss of 77 cents a year earlier. In total, the quarter included about $10.5 billion in one-time pretax gains and an additional $5.5 billion in pretax losses. That makes the profit closer to $2.7 billion before taxes. That figure still includes a boost of $1.7 billion compared to the prior year from the bank putting aside less to handle souring loans. Last year’s results included a goodwill impairment charge of $10.4 billion, without which the bank would have earned $3.1 billion, or 27 cents a share. Meanwhile, the bank’s surprising looking revenue growth of 6% to $28.7 billion was also inflated by the various accounting moves.
Wells Fargo Earnings Up But Revenue Slips (Charlotte Observer)
The San Francisco-based bank reported net income of $4.1 billion in the third quarter, more than 20 percent higher than the same time period last year. Aided by a decrease in loan losses and operating expenses, the bank earned 72 cents per share, falling just short of analysts’ estimates. Last quarter, Wells posted earnings of 70 cents per share with a net income of $3.9 billion.
Oliver Stone Faces Down Wall Street (Dealbook)
“Jamie Dimon should be spending three weeks on a park bench, homeless, and get a taste of what it’s like on the other side,” Mr. Stone said of JPMorgan Chase’s chief executive. “Might knock out some of the arrogance out of those guys.” Continue reading »
$$$ ‘All or Nothing’ Markets: Even Earnings Don’t Matter (CNBC)
$$$ “… the dreams that are emerging again, that on Monday everything will be resolved and everything will be over, will again not be fulfilled” (WSJ)
$$$ Green Mtn. Coffee Drops on Einhorn Comments (Bloomberg)
$$$ Man Uses Occupy Wall Street’s Human Microphone to Propose to Girlfriend (NYO)
$$$ New Yorkers support anti-Wall Street protests: poll (Reuters)
$$$ Fat Cats on Wall Street (Tumblr)
Continue reading »
From time to time around these parts, when things get really, really bad, we like to take a few moments to get a little perspective. Yes, you might be out there getting your ass kicked. Yes, you might be living in a state of panic about the future of your job. Yes, you might feel unjustly maligned by those protesting Wall Street. Yes, you might be worried about a less than stellar bonus necessitating you turn your “bedroom into a home office.” But at least you’re not forced to suffer the indignities of working at the mercy of an ineffectual regulator too pussy to stick its hand up someone’s ass when it really matters and for that you should be thankful. Continue reading »
-
Posted in:
M&A
Delaware Judge To Goldman: Here, Let Me Re-Do That Fairness Opinion For You
By Matt Levine
A thing I liked about being a banker, but that made me consistently terrible at managing my PA, was that in banking you don’t really get paid to be right about things. Nobody made any money telling AOL and Time Warner that maybe they’d be better off on their own. Instead, your job is telling a persuasive story – a story that often ends with “so that’s why you have to [buy this company][sell your company].” You tell that story with DCFs and PowerPoint and steak dinners, but ultimately all the numbers and charts are aimed not at objective reality but at persuasion. And the easiest way to make a story persuasive is to tell people what they want to hear.
It is, however, possible to take that concept too far. Fairness opinions are a troublesome example. Nobody in the real world believes all that much in fairness opinions, but banks actually take them pretty seriously because they represent in a vague and highly caveated way a bank’s conclusion that the price paid in a merger is (within a wide range of) “right,” or at least somehow connected to objective reality. This is a hard mindset to get into when your day job is basically persuasion, and you can expect some slips every now and then.
Here, for instance, is a useful tip for any junior analysts: this is not what a DCF looks like:
Continue reading »
American International Group Inc, the insurer majority owned by the U.S. after a 2008 bailout, is hosting an event at a California facility that advertises “the amenities of an ultra luxury hotel.” The American General unit assembled about 65 people who distribute its products for a two-and-a-half-day stay this week at the Resort at Pelican Hill in Newport Beach, California, said Larry Mark, a spokesman for AIG’s life insurance division. Nine AIG managers were also sent to the resort to make presentations, Mark said in a e-mail. He declined to say the cost of the event for the insurer…“We are back to the business of being in business and we’re in the marketplace competing,” said Mark. [Bloomberg]
Area Hedge Fund Manager Pretty Sure Wall Street Protesters Are Just Looking To Rub Up Against Each Other And Score Dope
By Bess LevinWhat do top financial services employees think of the month-long protests headquartered in Zucotti Park, which took over Times Square over the weekend? So far the most vocal people have expressed support for the movement, like Jim Chanos, who said, “New York is so finance-centric that people here underappreciate the reaction of the rest of the country” and that OWS shouldn’t be underestimated; Larry Fink, who told reporters, “I believe we should not turn our backs on these protests…Maybe we will get some balance”; Jamie Dimon, who told those listening to the JPM conference on Thursday, “I do vaguely remember the First Amendment that it is legal to demonstrate and it is completely fine. You should listen and not just have a knee-jerk reaction”; and Vikram Pandit, who in addition to saying that “trust has been broken between financial institutions and the citizens of the US,” told protesters he’d love to chat over the phone. With the exception of John Paulson, however, who last week issued a statement telling protesters to 1) beat it and 2) thank their lucky stars that as the founder of a ‘most successful business‘, he chose to set up shop in New York, most financiers with less then charitable feelings have kept their feelings to themselves, fearing retribution from the anti-Wall Street group. Until now. Continue reading »
Cut today at the other Swiss Bank. Continue reading »
