Opening Bell: 03.15.12

Goldman Roiled by Op-Ed Loses $2.2 Billion for Shareholders (Bloomberg)
Goldman Sachs slid $4.17 to $120.37 yesterday, leaving the shares still up 33 percent this year…Smith, who also wrote that he was quitting after 12 years at the company, blamed Blankfein, 57, and President Gary D. Cohn, 51, for a “decline in the firm’s moral fiber.” They responded in a memo to current and former employees, saying that Smith’s assertions don’t reflect the firm’s values, culture or “how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.”

You Have Less Than Two Hours To Sign Up For The Dealbreaker NCAA Tournament Challenge (DB)
Do it here, do it now, or lose us forever (the password is: animalliar).

SEC Cracks Down On Pre-IPO Trading (WSJ)
Federal regulators are cracking down on an obscure but booming market for trading shares in companies before they go public. The Securities and Exchange Commission brought charges against two money managers, alleging they misled and overcharged investors on funds formed to buy shares of Facebook Inc., Twitter Inc. and other social-media companies. A so-called secondary market in these companies’ private shares has grown rapidly as more investors seek to buy into the companies before their initial public offerings, hoping to profit later from a “pop” in the stock price after the IPO. The allegations by the SEC mark the first major regulatory blow to the market, which the agency says emerged in 2009 and which industry participants say has been fueled lately on the anticipation of a Facebook IPO in the coming months.

Citi Rejection Stings Pandit (WSJ)
The board of directors held a meeting by telephone shortly after the Federal Reserve said Tuesday it had turned down the capital plan the New York company submitted as part of its latest “stress test,” according to people familiar with the situation. Neither Citigroup nor the Fed disclosed what the bank had been seeking, but in recent months the bank’s executives had repeatedly said they wanted to return capital to shareholders through dividends or share buybacks in 2012. “Everyone was taken by surprise,” said a person with knowledge of the reaction among Citigroup executives and board members.

Jobless Claims in U.S. Decrease, Matching Four-Year Low (Bloomberg)
Claims for jobless benefits dropped last week in the U.S., matching the lowest level in four years, more evidence the labor market is improving. Applications for unemployment insurance payments fell by 14,000 to 351,000 in the week ended March 10, Labor Department figures showed today. Economists forecast 357,000, according to the median estimate in a Bloomberg News survey. Claims reached the same level a month ago, the lowest since March 2008.

UBS Cuts Bonus Pool (WSJ, DB)
That would be putting it mildly.

JPMorgan’s Dimon Responds to Goldman Column (Reuters)
J.P. Morgan CEO Jamie Dimon told employees to resist taking advantage of competitors and to focus instead on strengthening the bank’s own standards, in an internal memo sent in response to the firestorm engulfing Goldman Sachs after a former banker published his resignation letter in the New York Times.

Meredith Whitney: Banks Oversold, Muni Defaults Still Coming (CNBC)
“The banks should trade at tangible (book value) or a little better,” she said. “But that doesn’t mean they’re off to the races and that there’s tremendous momentum behind the fundamentals of these banks.”

Goldman fights back after employee’s scathing public exit (NYP)
After the memo was distributed, Goldman brass went into damage-control mode, fielding calls from investors and clients searching for reaction from the 143-year-old firm. Blankfein was light-hearted about the surprise attack but tried to be extremely responsive to client inquiries about it, sources said. Privately, some Goldman officials played down Smith’s significance within the firm, describing him as a “disgruntled mid-level employee.”

Two Billionaires Side With Greg Smith Against Goldman (Forbes)
Jim Clark said Smith’s criticism of Goldman’s treatment of its customers is “what I experienced over the four to five years” he entrusted some of his funds with the firm’s private wealth management division…Billionaire Stephen Jarislowsky, CEO of Canadian investment firm Jarislowsky, Fraser, says he also supports Smith’s op-ed. “It’s about ethics and fiduciary responsibility, and the lack thereof,” explains Jarislowsky. “If you’re a fiduciary you should work for your client and not for anyone else. If you’re a doctor, you’re not supposed to work for your pocketbook, but for your client’s health.”

Chinese Economy Already in ‘Hard Landing,’ JPMorgan’s Mowat Says (Bloomberg)
China’s economy is already in a so- called “hard landing,” according to Adrian Mowat, JPMorgan Chase & Co.’s chief Asian and emerging-market strategist. “If you look at the Chinese data, you should stop debating about a hard landing,” Mowat, who is based in Hong Kong, said at a conference in Singapore yesterday. “China is in a hard landing. Car sales are down, cement production is down, steel production is down, construction stocks are down. It’s not a debate anymore, it’s a fact.”

Arrest warrant issued for Russell Brand over iPhone rage (NYP)
Brand was named in a police report on Monday night after allegedly grabbing a photographer’s cell phone out of his hand and hurling it through the window of a law firm. The paparazzo, Timothy Jackson, filed a police report immediately after the incident, citing “criminal damages.” According to Jackson, he had been out with several fellow photographers when he started taking pictures of the 36-year-old British comedian and actor with his iPhone. Brand allegedly “flipped out,” snatched the cell phone and threw it at a building, breaking a window in the process. His reps have contacted the law firm and offered to pay for the broken window.

46 comments (hidden to protect delicate sensibilities)
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Comments (46)

  1. Posted by Guest | March 15, 2012 at 9:51 AM

    Lesson #2 of 2012 for Greg: the NYT, any media really, will give you an undeservedly loud podium to voice your concerns if you've been associated with and willing to make wildly disparaging, unsubstantiated statements about a controversial institution. The harshness of that reality likely sinks in after the second or third career change and options begin to dwindle.

  2. Posted by guestie | March 15, 2012 at 9:52 AM

    What a fwog-face.

  3. Posted by Chevy_Chased | March 15, 2012 at 9:56 AM

    I can't tell if Greg Smith is looking at me or something to my immediate left. Seems like he was cast in the Goldman recruiting video to promote 'diversity'. His credit should have an aserisks and he probably shouldn't mention this acheivement to newspapers.

  4. Posted by investorcluzo | March 15, 2012 at 10:05 AM

    All of the aspiring Jr. Mistmakers looking to join the Goldman ranks now have Greg to thank for the 15 additional rounds of interviews.

  5. Posted by Guest | March 15, 2012 at 10:05 AM

    UBS cuts bonus pool. What’s the next “shocking” headline: “Prostitution in Vegas?"

  6. Posted by Guesty | March 15, 2012 at 10:06 AM

    He kind of looks like a ping pong ball.

  7. Posted by Guest | March 15, 2012 at 10:09 AM


  8. Posted by superdadinnj | March 15, 2012 at 10:12 AM

    Water is wet

  9. Posted by Guest | March 15, 2012 at 10:13 AM

    Who is calling whom the Muppet?

  10. Posted by Kermit the Frog | March 15, 2012 at 10:15 AM

    He kind of looks like me.
    -(Suddenly realized where the Muppet jokes came from.)

  11. Posted by superdadinnj | March 15, 2012 at 10:18 AM

    It's not easy being green

  12. Posted by 12 yr old self | March 15, 2012 at 10:24 AM

    bess making a top gun reference re: the NCAA bracket. my desk moved.

  13. Posted by Guest | March 15, 2012 at 10:31 AM

    That's why he was such a warrior in Ping Pong. He never had to turn his head.

  14. Posted by Guest | March 15, 2012 at 10:33 AM

    Putting out a memo saying "don't utilize Goldman's temporary bad rap relative our own," thereby highlighting aforementioned disparity…… Dimon, no N, no O, just KI

  15. Posted by Guest | March 15, 2012 at 10:35 AM

    Huh, Greg is South African. I wonder if he played rugby at Stanford?

    – Guy who hasn't seen the picture yet

  16. Posted by guest | March 15, 2012 at 10:37 AM

    In all seriousness, at first glance I thought it was someone afflicted with mongoloidism, which is not funny of course.

  17. Posted by Hakuna Matata Guy | March 15, 2012 at 10:38 AM

    How much time do I have to sign up for the dealbreaker bracket?

  18. Posted by Guest | March 15, 2012 at 10:39 AM

    Actually it is

  19. Posted by Ambac quant | March 15, 2012 at 10:39 AM

    goldman acts in own self interest

  20. Posted by Guest | March 15, 2012 at 10:40 AM

    Never knew Jimmy Norton worked at GS

  21. Posted by Ramone! | March 15, 2012 at 10:49 AM

    Take that back! Lil Yimmy would never stoop so low!

  22. Posted by for real | March 15, 2012 at 10:50 AM

    can u say extra chromosome

  23. Posted by NowOnePerson | March 15, 2012 at 10:52 AM

    Finding a reason to talk about financials the day (2 days) after the XLF rips 3% is the NKI.

  24. Posted by Guest | March 15, 2012 at 10:53 AM

    Greg looks like a well-rounded individual, always on the ball, someone who can roll with adversity.

  25. Posted by UBS Citation Quant | March 15, 2012 at 10:59 AM

    Hindsight, is that you?

  26. Posted by whyioughta | March 15, 2012 at 11:09 AM

    is everyone here too young to remember cecil toitle?

  27. Posted by Abe_Froman_ | March 15, 2012 at 11:11 AM

    C’mon DB, why did you have to post a pic? Now I feel bad for making fun of the poor guy.

  28. Posted by OptimusQuant | March 15, 2012 at 11:16 AM

    Dear GS Employees and Doctors,
    Stop thinking about lining your own pocketbooks and focus on making me wealthier and healthier

    A billionaire

  29. Posted by HungryIntern | March 15, 2012 at 11:35 AM


    I gave you a job and not the right to speak. Now, come home and give your mom a kiss.


  30. Posted by TheodoreBallgamePhD | March 15, 2012 at 11:44 AM

    JImmy stoops plenty low.

    -Uncle Paul

  31. Posted by katy perry | March 15, 2012 at 11:48 AM

    "Shagger of the Year?" I think not!

  32. Posted by sadf | March 15, 2012 at 11:51 AM

    New policy: no more whiny Jews?

  33. Posted by Guest | March 15, 2012 at 11:52 AM

    Don't. He's worth more than you'll ever be. And his serve has been clocked at 27 M.P.H.

  34. Posted by Ashley Dupre | March 15, 2012 at 12:09 PM

    Client number NEVER!….as if!

  35. Posted by Abe_Froman_ | March 15, 2012 at 12:36 PM

    Are you not aware of my sausage empire?

  36. Posted by The Goonies | March 15, 2012 at 12:45 PM

    Actually, he looks like me.
    — Sloth

  37. Posted by Moisten | March 15, 2012 at 12:47 PM

    So am I

    -Lynn T.

  38. Posted by guest | March 15, 2012 at 1:15 PM

    Um, he made no more than $500,000 last year. So, no, he's not worth more than most people will ever be.

  39. Posted by guest | March 15, 2012 at 1:16 PM

    he was a mid-level front office guy. or are you one of the morons who thinks he was a major player at GS?

  40. Posted by Guest | March 15, 2012 at 1:44 PM

    Don't knock it. You need one of these faces to get to the top at Goldman

    L. Blankfein – The Undisputed Jewish Shopkeeper of the World

  41. Posted by mrpink | March 15, 2012 at 2:41 PM

    He's kinda cute.


  42. Posted by Raj and Bernie | March 15, 2012 at 3:33 PM

    Not even we would do him in our desolate place – looks like an unguided, pre-born bowling ball.

  43. Posted by Jim | March 15, 2012 at 8:40 PM

    Wall street dudes are tough until they get F()cked up !

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