The bad news is that bank bonuses this year are estimated to drop 20% to 30% from 2010, and quite a bit more if you’re a bond trader. The good news is that 2012 should see some cash freed up, on account of all the people who will have been fired by then. Continue reading »
Archive for November 2011
Key Berlusconi Ally Removes Support (WSJ)
Umberto Bossi, a key ally of Italian Prime Minister Silvio Berlusconi, Tuesday said he asked the premier to step aside and supported Angelino Alfano as his possible successor. “We have asked [Mr. Berlusconi] to take a step aside,” Mr. Bossi said, adding that there won’t be any relevant news today. Asked by reporters if he expects Mr. Alfano, the new head of Berlusconi’s party, to be a possible new prime minister, Mr. Bossi replied “who else?” Mr. Berlusconi is still in last-minute talks aimed at saving his conservative government ahead of a key parliamentary vote later Tuesday, as investors renewed pressure on the premier to step down and allow a new government to steer the country out of Europe’s debt crisis.
Berlusconi Exit No Quick Fix for Italy’s Woes (Reuters)
FYI.
Credit Suisse Warns US Clients Of Probe (Herald Sun)
Credit Suisse says it has warned US clients that they may be the target of a US tax probe, and urged them to hire lawyers to represent them. “The letter exists,” a spokesman from the bank said, referring to media reports of a statement sent by the bank to its US clients over the tax investigation. He declined to say how many of the bank’s clients are recipients of the letter, which also advises the clients to engage a contact person in Switzerland who could represent them if required at the Swiss tax office.
Face-Off Over MF Global Shortfall (WSJ)
JPMorgan and MF Global Holdings Ltd. agree on one thing: The two financial players worked together closely in the months before MF Global collapsed. Then things get messy. People close to MF Global have complained that J.P. Morgan dragged its feet when settling trades made by MF Global as it rushed to sell assets, according to people familiar with the situation. Executives at MF Global have grown concerned that the slowdown complicated efforts to find a buyer for the company or its parts and might even have caused a $600 million gap in customer accounts that is now the subject of a protracted treasure hunt.
Greek Leaders Struggle To Agree On New Premier (Retuers)
So far they have agreed that a “100 day” coalition should be set up to push a 130 billion euro ($180 billion) bailout for Greece through parliament and that elections should be held in February. But after days of wrangling, no one knows who even will lead this government.
Romney Battled Guns And Dogs In France (Reuters)
“The fresh-faced Latter-Day Saints who came to France in the late 1960s to preach the message of Jesus Christ—of whom Republican presidential candidate Romney is the best known—discovered a secular and skeptical populace, and few willing converts. On bad days, the young Americans were greeted with guns, or barking dogs chased at their heels.” Continue reading »
$$$ Ex-ECB’s Papademos Front-Runner for Greek Prime Minister [Reuters]
$$$ Paulson to Cash In on Delphi IPO [WSJ]
$$$ “Where are the adults in the room? It’s just so convoluted, so disjointed,” said Mr. Morrison, an independent trader who says he had less than $100,000 in his MF Global account. “All I know is, it could have been done differently.” [WSJ]
$$$ Krawcheck: Wall Street needs women, younger clients to compete [Reuters]
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Would You Be More Mad At Corzine For The Whole MF Global Thing If He Didn’t Have All That Facial Hair?
By Bess Levin
In other words, does the rational part of your brain, which wants you to be circus freak-crazy pissed at him, lose out to the part that gets one look at that beard and decides “I can’t stay mad at you”? Because that’s a theory being floated for why JSC isn’t faring too badly in the court of public opinion. Continue reading »
If, like me and David Kotz, you get some sad pleasure from getting annoyed at SEC incompetence, then you might enjoy the filings that the SEC and Citi made today in a federal court defending their settlement over charges that Citi did some bad stuff with CDOs.
The quick background: Citi decided to make a big prop bet against some mortgages, so it structured a synthetic CDO with the exposures it wanted to short and sold it to some dopes, keeping virtually all of the short side of the trade on its books. This was a good idea and Citi made $160mm, but it worked out less well for the dopes. The SEC sued Citi for not telling the dopes certain things, like that it had picked the mortgages involved because of their exceptional badness, and they signed up a $285 million settlement. Unfortunately for them, the federal judge hearing the case is Jed Rakoff, who is as high on the enemies list of the SEC’s employees as it is possible to be without standing between them and their tranny porn. Judge Rakoff had some questions about the settlement. Questions like “Why, for example, is the penalty in this case less than one-fifth of the $535 million penalty assessed in SEC v. Goldman Sachs & Co.,” or “How can a securities fraud of this nature and magnitude be the result simply of negligence?” Today Citi and the SEC filed answers those questions. They’re a fun read.
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Berkshire Hathaway Is Too Big, Interconnected, Smart, Awesome For You To Worry About What It’s Up To
By Matt Levine
Two bits of news are out today at the high and low ends of what you could loosely call big financial institutions. At the low end, Jefferies, which I’ll stick with calling wee given its $40 billion balance sheet, is blasting out minute-by-minute, issuer-by-issuer, maturity-by-maturity, CUSIP-by-CUSIP accounts of its holdings of European sovereign bonds, its trading activity in those bonds, and the lunch orders of the traders trading those bonds. First it had no exposure – $2.4bn gross, $9mm net short notional, $37k of DV01, almost all cash with some futures – and then it had even less exposure, cutting gross exposure in half although apparently increasing net. The aggressive PR campaign seems to be working, with the stock basically where it was before anyone spent any time thinking about Jefferies, and up today in a down tape.
At the high end, Berkshire Hathaway, which is not entirely unlike a thinking man’s AIG and has a $385 billion balance sheet, disclosed Friday that it lost two billion dollars last quarter in mark-to-market on its $34 billion notional of short S&P index puts. Also Berkshire is ramping up single-name equity investments without telling anyone what they are.
One more thing about BRK/A that you may or may not find related is that it may or may not be a “non-bank G-SIFI,” that is, a financial institution that is not an FDIC insured bank but is nonetheless “too big to fail” because of its size and interrelationships:
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Cuts going down circa now. Continue reading »
Dykstra, in an exclusive statement to the Daily News, says that at no point had he agreed to participate in [previously announced fight versus Jose Canseco], and that Dan Herman, 26, of Chester County, whom he calls “A starf—er,” booked the fight without his consent and made up quotes in the press, including the Daily News, that Dykstra hated Canseco. Dykstra says that he doesn’t even know Canseco and has no beef with him. “I never agreed to anything,” the embattled Dykstra told us yesterday in an email. “Damon Feldman and Alki David continued to use my name to sell tickets and promote their event up until the last minute. They showed up at my door unexpected, I didn’t even know who they were,” Dykstra explained. He then showed Feldman and David an angry email he sent to Herman Wednesday night, chewing out Herman for booking the fight without his permission. By phone yesterday, Dykstra denied that Herman was ever his business manager. “If he’s my business manager, I’m a f—in’ ballerina,” he told us. [Philly, earlier]
One of the most difficult and important part of being a hedge fund manger is the constant need to come up with new, outside the box ideas. This is, of course, crucial specifically with regard to investment ideas but also just generally, there is the never-ending pressure to maintain freshness in all matters of business. For instance, keeping employees motivated, hungry and on their toes. If you’re Don Brownstein, you (allegedly) “walk around a crowded conference room table while slapping the palm of [your] hand with a baseball bat, stopping behind traders while stating ‘The only way you can leave this firm is in a body bag.’” If you’re another luminary of the investing world, you go with white board markers as a means of positive or negative reinforcement, one marker good, two markers bad, respectively. If you’re John Duffield, who is being sued by a former employee for bullying, you suggest that the staff you employ does not act in compliance with the law and wonder aloud a) how they can look themselves in the mirror and b) whether or not they have any remorse for disappointing you, ’cause they should. Continue reading »
Greek Prime Minister Plans To Step Down (WSJ)
Greece’s major political parties on Sunday agreed to form a national unity government that will oversee elections after putting in place a debt-slashing deal, in the hope of averting financial catastrophe and winning back the trust of the nation’s European partners. The deal came about after Prime Minister George Papandreou agreed to step down to make way for a new prime minister under a commonly accepted government…The administration is hoping to agree on a new government by Monday, ahead of a meeting of euro-zone finance ministers in Brussels that is expected to discuss whether to release Greece’s next aid payment. Government spokesman Elias Mossialos said cabinet ministers serving in the new coalition will be named as early as Monday and the new government could be sworn in by the end of the week.
Berlusconi Considers Resigning (WSJ)
While resignation is a possibility, the prime minister is seriously considering going to Parliament for a critical budget vote Tuesday, which could confirm he no longer commands a majority, the people said.
Berlusconi’s Majority Unravels as Allies Push Him to Resign (Bloomberg)
Two Berlusconi allies defected to the opposition last week, and a third quit late yesterday. Six others called for Berlusconi to resign and seek a broader coalition in a letter to newspaper Corriere della Sera. More than a dozen more are ready to ditch the premier’s coalition, Repubblica daily reported yesterday, without citing anyone.
Regulator To Skip MF Probe (WSJ)
Mr. Gensler’s decision was made to eliminate the perception of a conflict of interest due to his longstanding ties to the now-departed chief executive of MF Global, Jon S. Corzine. Mr. Gensler worked at Goldman Sachs Group Inc. in the 1990s, when Mr. Corzine was the securities firm’s chairman and senior partner.
Occupied: Portable Bathrooms for Protesters (NYT)
The scarcity of bathroom options has been both a major hassle for the protesters and a source of tension with their neighbors and the local community board. Restaurants, Starbucks and fast-food joints within a few blocks of the square have seen eternal lines of protesters looking to use the john, and residents have been complaining about protesters using the doorsteps of their buildings as makeshift relief stations…OccupyWallSt.org said Friday afternoon that it had obtained three portable bathrooms and placed them on a loading dock connected to 52 Broadway, the United Federation of Teachers building about two blocks south of Zuccotti Park where protesters have been storing their gear. Continue reading »
$$$ Jefferies Amplifies Defense of European Positions [WSJ]
$$$ LinkedIn Drops Most In Three Months [Bloomberg]
$$$ Matthew Goldstein: The Two Faces Of Jon Corzine [Reuters]
$$$ Triumph, The Insult Comic Dog Mocks Occupy Wall Street [HP] Continue reading »
