Yes, Corzine’s contract says he’s eligible for a $12 million package if he leaves the firm but recent events will make it slightly more difficult for him to collect that check on the way out. Continue reading »
Archive for November 2011
“It was not the banks that created the mortgage crisis,” the mayor said. “It was, plain and simple, Congress who forced everybody to go and to give mortgages to people who were on the cusp.” It was Congress, he continued, that “pushed Fannie and Freddie to make a bunch of loans that were imprudent; they were the ones that pushed the banks to loan to everybody.”…Mr. Koch, a Democrat, praised Mr. Bloomberg’s business acumen but said he differed with him on the question of the financial crisis and the protests. “I’m Jewish, not Catholic, but I believe in punishment,” he said. Referring to the settlements paid by Goldman Sachs and Citigroup to resolve claims by the Securities and Exchange Commission, Mr. Koch said they were just “the cost of doing business” in the view of the banks. “What do you think they got fined for — schmutz on the sidewalk?” Mr. Koch said. “They got fined because they abused their relationship with their clientele. And I want to see somebody — I want to see one of them, of a major corporation, punished criminally.” [NYT]
Who Should Pay For Ruining Lenny Dykstra’s Various Post-Baseball Ventures And Hobbies?
By Bess Levin
As you may have heard, this Saturday night, Lenny Dykstra will box former co-worker Jose Canseco, in a title fight** that will be live-streamed for your viewing pleasure. Canseco was originally scheduled to go head to head with the husband of a Real Housewives cast member but “graciously” agreed to bow out after Nails “called and begged to take his place against Canseco” who, according to LD, “ruined my career by spreading lies.” All of which got us thinking– since Lenny a) is in serious need of some cash, b) not doing much these days, and c) probably looking to work out some of the aggression he feels toward people who’ve brought his life to the place it is today, perhaps he should consider fighting the other individuals who “ruined” things for him? Continue reading »
The barriers to entry into underwriting sexy tech IPOs really shouldn’t be that high. Like, it’s not that hard. And, while much ink is spilled about how IPO underwriters are gatekeepers with a sacred trust to protect the public markets from dodgy companies, no firm has any official status that would give them an advantage in that gatekeeping function (as opposed to). But the top of the league table is pretty much who you’d expect if you weren’t expecting much:
From a public perspective this is maybe a good thing. Despite the lack of any official recognition, there’s something to be said for having IPOs – notionally the riskiest of public securities offerings, though, y’know – be underwritten by big-name long-established firms whose capital and reputation are theoretically on the line if the thing they’re underwriting turns out to be a turd.
From a client perspective it’s also understandable. At this point I could probably place the Groupon IPO from my couch, despite some questions about its valuation, because it’s a household name in a sexy sector and investors are desperate for anything without a 1.0 correlation to Greek bonds. But there will once again come a time when the market cracks and a mortgage REIT heavily exposed to Florida development deals and Chinese forests has to drag its IPO kicking and screaming over the finish line. When that happens, the client will be very happy to be doing a deal with a league table leader who can call up its best clients and say “I know you don’t normally buy IPOs in this particular sector, but remember that time I got you a big allocation on Groupon? Whaddaya say?” If you’re Groupon it now appears that you don’t need that kind of support, but you have to be pretty confident not to worry about that going into a six-month IPO process.
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Bloomberg: Jon Corzine Chose Not To Get Drunk And Unload His Problems On A Group Of Unsuspecting Bankers Night Before Q3 Results Came Out
By Bess Levin
But you can imagine what it would’ve been like if he had, right? [Slurring] “We’re sooo preggo with Euro debt it’s not even funny. Might have to use client funds for collateral. I’m serious.” [Spills wine on guy to his right, attempts to wipe it up before having hand shoved away.] Continue reading »
In Corzine Comeback, Big Risks and Steep Fall (DealBook)
When Jon S. Corzine joined MF Global last year it seemed like a strange choice — the firm had none of the glamour, let alone the profits or footprint of Goldman Sachs, the bank he ran during the 1990s. … Mr. Corzine, 64, who not only presided over Goldman but later served in the United States Senate and then as governor of New Jersey, seemed surprised himself. “Don’t ask me any hard questions,” he joked to a visitor who met with him just days after Mr. Corzine took over in March 2010. “I hadn’t heard of this company a week ago.”
Greece Sticks With Referendum (WSJ)
Greek Prime Minister George Papandreou on Wednesday held to his high-stakes call for a national referendum on the country’s bailout package, facing down a revolt in his own party and preparing to make his case to European partners in critical talks. Greece’s cabinet overnight approved plans for a referendum that effectively amounts to a vote on whether Greeks want to endure the further financial sacrifices necessary to remain in the 17-country euro zone.
Jefferies Says It’s No MF Global as CEO Shuns Large Prop Bets (Bloomberg)
“We have always been cognizant of the fact that we’re not too big to fail and operate accordingly as we manage risk, diversification, liquidity and capital,” [CEO Richard] Handler, 50, said in an interview yesterday after MF Global Holdings Ltd. filed for bankruptcy. “We have always used our capital to facilitate clients rather than taking large proprietary bets.”
Lloyds CEO to take leave on health grounds (Reuters)
Antonio Horta-Osorio is taking a break from his role as chief executive of part-nationalised British lender Lloyds Banking Group for health reasons, a source with knowledge of the matter said on Wednesday. … “He’s been suffering from fatigue due to over-work,” said the source.
Dick Bove: We’ve Gone Nuts (CNBC)
“I think we’ve gone nuts,” he said. “I think these [U.S. bank] stocks are so cheap, that people should be buying them as aggressively as they could.”
Group Endorses Walk Out in Economics 10 (Harvard Crimson)
A small group of Harvard students and employees staged an “Occupy Speakout” at noon on Tuesday to express their solidarity with the “National Day of Action.” The group also sought to raise awareness of events they have planned for today, including a walkout of the popular Economics 10 introductory course and a March in Boston later in the day. “Mic Check! We are the 99 percent across the country!” the group chanted.
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$$$ FBI, Federal Prosecutors to Join Inquiry into Corzine Firm [NBC]
$$$ Bethany McLean: Did accounting help sink Corzine’s MF Global? [Reuters]
$$$ AIG Repays $972 Million to U.S. Treasury [Bloomberg]
$$$ Greece Says Vote On Bailout Is Still On [Reuters]
$$$ Hedge Fund Rising Stars [AR]
$$$ Mr. Bloomberg, a man of substantial means and considerable generosity, is known on Halloween to give out full-size candy bars, not just the “fun-size” ones. “I want the candy bars,” Logan Green, 7, who was dressed as Sonic the Hedgehog, said matter-of-factly when asked why he was visiting the mayor. Arriving at the town house, things looked promising: someone in an Elmo costume was stationed outside the door, handing out candy from a plastic pumpkin to a small crowd. But when the boys finally reached Elmo: disappointment. “It’s not full-sized,” Logan said, opening his hands to reveal the same old miniature Kit Kats and Tootsie Rolls that children seem to get at every house on Halloween. [CityRoom] Continue reading »
“Corrections & Amplifications MF Global acknowledged to federal regulators that it had diverted funds out of customer accounts, and a federal official said the move is possibly in violation of the law. An earlier version of this article incorrectly implied that MF Global had admitted the move violated the law.” [WSJ]
Here is the conventional wisdom on MF Global, which I’ve sort of defended when provoked:
[I]n many ways, it’s a very satisfying morality tale. We’re in this time of Occupy Wall Street, a lot of people are already dissatisfied with Wall Street in general, and this is moral hazard — excessive risk-taking. Here, the firm fails, it happens in an orderly way, it doesn’t take down the financial system and everyone feels that this is the way things are supposed to work. We’re not supposed to stop financial firms from failing, but if they must fail — due to their own actions — shouldn’t it be this way? In a way that doesn’t hurt too many other people?
Isn’t it pretty to think so?
The problem is that it hurts the heck out of some people – people like the MF Global customers who are “scrambling for money” because apparently someone at MF Global thought they were running an online poker site rather than a futures broker. Those people will probably get their money, I guess, but I suspect that they’re not as jazzed as everyone else about creative destruction, the free workings of the market, and slaying the beast of moral hazard.
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Earlier: Continue reading »
The Logical Conclusion Here Is That Mike Mayo Occupies Himself During Lesser Analysts’ Conference Call Questions By Rubbing Baby Oil On His Pecs
By Bess Levin
PULL-UPS: Mayo…can do 35 consecutively and 150 in an hour. Used to do as many as 200 push-ups at a time when stress level got high. Changed to pull-ups after push-ups started causing him neck pain. BREAKFAST: 10 egg-white omelette with grilled onions. [Miami Herald via BI]
