• 26 Mar 2012 at 9:30 AM

Opening Bell: 03.26.12

Ex-Goldman Worker Said to Seek Book Deal (NYT)
Greg Smith has met with publishers this week, including imprints at several prominent houses. According to several people who were present, Mr. Smith described his book as a coming-of-age story, the tale of someone who came into the business with good intentions and sky-high ideals that were ultimately pierced by Goldman’s obsessive focus on making money. It would also be a story of the history of Goldman Sachs and the perceived change in the culture of the firm that left Mr. Smith, a native of South Africa who lived in London, disillusioned and eager to leave after spending nearly 12 years there.

E-Mail to Corzine Said Transfer Was Not Customer Money (Dealbook)
But the e-mail, a copy of which was reviewed by The New York Times, did not capture the full story behind the wire, which turned out to contain customer money. MF Global employees in Chicago had first transferred $200 million from a customer account to the firm’s house account, people briefed on the matter said. Once it was in the firm’s coffers, the people said, Chicago employees then promptly transferred $175 million of the money to the MF Global account at JPMorgan in London — the account that was overdrawn…The e-mail suggests that Mr. Corzine, a former governor of New Jersey, was unaware that the money had been transferred from a customer account.

Germany Backs Boost To Bailout Fund (WSJ)
Germany has been staunchly opposed to raising the planned €500 billion ($664 billion) ceiling on the ESM, but has left the question of the EFSF open until now. It was widely believed that the EFSF would be retired as soon as the ESM is launched and that the EFSF loans already awarded would be assumed by the ESM, reducing its future lending capacity. But now Berlin is suggesting allowing the EFSF to run longer and by doing so ensure that the ESM can use its full lending capacity, effectively boosting the firewall to about €700 billion. “We are saying that the ESM should permanently have €500 billion,” Ms. Merkel told a news conference in Berlin on Monday.

BATS Faced Revolt Over IPO (WSJ)
“The fact that our own stock was out there to be traded for the first time, and we showed systems problems, eroded customer confidence,” Joe Ratterman, BATS’s chief executive, said Sunday in an interview. “Of course investors are going to say, ‘Hey, wait a second.’” Some traders and investors considered the offering pricey. At $16 a share, BATS would have traded at about 10 times analysts’ 2013 earnings estimates. That is roughly on par with New York Stock Exchange owner NYSE Euronext and a premium to the Nasdaq OMX Group Inc., which trades at 8.6 times 2013 estimates. Even before the glitches appeared, the offering was off to a rocky start. When trading in BATS shares opened at 10:45 a.m., they were down 75 cents, to $15.25. From there, things only got worse.

JPMorgan Wins Case Against Trader Over Decimal Point Dispute (Bloomberg)
JPMorgan doesn’t have to pay a trader 580,000 pounds ($921,000) after a missing decimal point in an employment contract led him to believe his salary would be 10 times what was offered, a London court ruled. Kai Herbert, a Switzerland-based currency trader, sued JPMorgan for lost earnings claiming he signed a contract to relocate to Johannesburg for a salary of 24 million rand ($3.1 million). JPMorgan said there was a typographical error and the figure should have been 2.4 million rand. “Herbert took the commercial risk of accepting the offer, knowing full well that the figure was an error,” Judge Henry Globe said in today’s judgment.

Rick Santorum Now Depending on His Bowling Prowess to Win Elections (Daily Intel)
Yesterday on CBS’s Face the Nation, Rick Santorum made his latest appeal to voters in Wisconsin, who go to the polls a week from Tuesday. “I don’t know if you saw but yesterday I was bowling in Sheboygan. I threw three strikes in a row, that’s a turkey. You can tell that you have someone here who relates to the voter in Wisconsin — like so many in Pennsylvania I grew up in the bowling lanes.”

Hedge Funds Capitulating Buy Most Stocks Since 2010 (Bloomberg)
A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group. The Bloomberg aggregate hedge fund index gained 1.4 percent last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points.

Banks Set to Cut $1 Trillion From Balance Sheets (FT)
Investment banks are to shrink their balance sheets by another $1 trillion or up to 7 percent globally within the next two years, says a report that foresees a shake-up of market share in the industry. Higher funding costs and increased regulatory pressure to bolster capital will force wholesale banks also to cut 15 percent, or up to $0.9 trillion, of assets that are weighted by risk, a joint report by Morgan Stanley and consultants Oliver Wyman predicts. In addition, banks are expected take out $10 billion to $12 billion in costs by reducing pay, firing employees and paring back investments in areas that are no longer considered core.

Larry Summers: Strong Recovery A “Substantial Possibility” (FT)
According to Summers, the biggest risk to the recovery in the next few years is that policy will move away too quickly from its emphasis on boosting demand. “A lurch back this year towards the kind of policies that are appropriate in normal times would be quite premature,” he added.

Bernanke Notes Labor Market Concerns (WSJ)
“Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies,” Mr. Bernanke said in prepared remarks to the annual conference of the National Association for Business Economics.

Bad fliers get boot – & bill (NYP)
Fed up with disruptive fliers, the Port Authority plans to go after them for the money they cost their airline and the PA. “We’re going to use every lever at our disposal,” said PA chief Pat Foye. “These delays cost thousands of dollars — maybe tens of thousands — each. One Alec Baldwin incident can delay a whole airport for a day with cascading delays.” (Baldwin, the “30 Rock” star, made international headlines in December when he got booted by American Airlines at LAX after refusing to turn off his phone.) The PA is going to “aggressively’’ remind passengers to keep cool and listen to instructions from airline crews — even if they think they’re stupid, Foye said.

40 comments (hidden to protect delicate sensibilities)
Show all comments ↓

Comments (40)

  1. Posted by investorcluzo | March 26, 2012 at 10:01 AM

    Greg, please read "Monkey Business" then tell us how your book would materially differ from that story line.
    -VP Business Development, Warner Books, Inc.

  2. Posted by Port Authority | March 26, 2012 at 10:06 AM

    Calm the fuck down!!!

  3. Posted by Whoops | March 26, 2012 at 10:12 AM

    After reading a few too many crisis narratives, I'm not sure material difference is a trait publishers are seeking anymore.

  4. Posted by Michael Lewis | March 26, 2012 at 10:12 AM

    Ahem. Liar's Poker too if you don't mind.

  5. Posted by Rick Perry | March 26, 2012 at 10:27 AM

    ???? He bowled three strikes in a row ???? Dam….

    Guess he really is qualified to be the leader of the free world……

  6. Posted by pazzo83 | March 26, 2012 at 10:31 AM

    Euro Sovereign Debt + Shitty Hedges = Profit

    - J Corzine

  7. Posted by European Math | March 26, 2012 at 10:13 AM

    ESM + EFSF = WTF

  8. Posted by 9th district D.A. | March 26, 2012 at 10:37 AM

    The wire was illicit, and Corzine was complicit.

  9. Posted by VonSloneker | March 26, 2012 at 10:39 AM

    14:58…59…annnnnd…thank you Greg Smith, it's been fun.

    - The Ghost of Andy Warhol

  10. Posted by CoveredLong | March 26, 2012 at 10:44 AM

    It's called a turkey, ya turkey.

    -Tammy Powers

  11. Posted by child | March 26, 2012 at 10:54 AM

    Yeah well whoever said the ryhme did the crime…

    -J.C.

  12. Posted by Guest | March 26, 2012 at 11:02 AM

    New York vs. EMEA?
    M&A vs. Equity Derivatives?
    GS vs DLJ?

    It will be like a whole new book.

    - UBS Diversity Quant

  13. Posted by J. Corzine | March 26, 2012 at 11:16 AM

    I ran three turkeys in a row and now they're strikes against me?

  14. Posted by US Patriot | March 26, 2012 at 11:24 AM

    “I don’t know if you saw but yesterday I was bowling in Sheboygan. I threw three strikes in a row, that’s a turkey…"

    even Norman Rockwell can't match such a powerful image of Americana .

  15. Posted by Greggers | March 26, 2012 at 11:31 AM

    well firstly, I don't appreciate you likening my appearance to a monkey if we are to reach a deal.

  16. Posted by Guest | March 26, 2012 at 11:33 AM

    At first I thought three strikes in a row was pretty awesome. Then I remembered that bowling is a joke.

    -America

  17. Posted by Greg Smith | March 26, 2012 at 11:33 AM

    *Rough draft*
    Chapter 6–The Day

    When I walked in that day, something had changed. The coffee tasted different, there was the unmistakable scent of Axe deodorant mingled with the now familiar scent of the undeodorized European underarms on the desk. The combination of which smelled curiosly like money…freshly printed money. I remembered my first day: the untied shoes, the hope and promise of helping my fellow man. No, this was not the Goldman I remembered on my first day, it was different, very different.

  18. Posted by Perry Mason | March 26, 2012 at 11:36 AM

    Jon Corzine… transfer… blah, blah, blah….. Why isn't anyone jumping on JPM's case?
    How did they suspect that the funds could have come from customer accounts? Why was the suspicion so strong that they were seeking a letter guaranteeing that JPM wasn't going to be complicit in this? Did they pretty much know they bled MF Global dry to a position that might have encouraged a customer transfer? And if having this letter implies that JPM would be protected from being compelled to return the funds, does not having the letter mean JPM should be compelled to return the funds to customers now?!

    "The letter from JPMorgan asked for confirmation that all “past, present and future” transfers complied with laws preventing the misuse of customer money, an indication that the bank, which also served as the place where MF Global customer money was kept, was concerned about the source of the transfer."

  19. Posted by dick cheney | March 26, 2012 at 11:41 AM

    Bowling…..golf……hell, I'm healthy enough to play both! Let's go!

  20. Posted by Gerard B. Finneran | March 26, 2012 at 11:45 AM

    I will gladly pay whatever the Port Authority charges; I live to fly.

  21. Posted by Loyd Blankfein | March 26, 2012 at 11:50 AM

    Greg, I have a counter offer for your book.
    How about I make a C-section on your cuntface?

    Loyd Blankfein

  22. Posted by motives | March 26, 2012 at 11:56 AM

    he probably used the 175mil on bacon and cookies.

    -AIG NJ politics quant

  23. Posted by Guest | March 26, 2012 at 12:06 PM

    Welcome to the site, Mr. Corzine.

  24. Posted by guest | March 26, 2012 at 12:10 PM

    ELAINE: So, what's it about?

    KRAMER: Well, it's a story about love, deception, greed, lust and…unbridled enthusiasm.

    ELAINE: Unbridled enthusiasm?

    KRAMER: Well, that's what led to Greg Smith's downfall.

    ELAINE: Oh boy.

    KRAMER: You see, Elaine, Greg was a simple country boy. You might say a cockeyed optimist, who got himself mixed up in the high stakes game of world diplomacy and international intrigue.

    ELAINE: Oh my God.

  25. Posted by PermaGuestII | March 26, 2012 at 12:13 PM

    Isn't that the town w the mayor who went on a 3-day bender and got beat up in a bar fight?

  26. Posted by guest | March 26, 2012 at 12:17 PM

    Thx for the confirmation that the missing L wasn't a typo.

  27. Posted by Kai Herbert | March 26, 2012 at 12:26 PM

    Letters from JP Morgan are pretty meaningless.

  28. Posted by Guest | March 26, 2012 at 12:31 PM

    Here's something for a Monday morning smile. Remember the "key man" clause?

    "Executives at MF Global, including Mr. Corzine, may also face claims from investors who bought $325 million in senior notes the firm sold in August 2011. Ironically, the securities contain a “key man” provision that would increase the interest rate by 1 percent if Mr. Corzine were nominated to a White House cabinet position before July 2013, an unlikely prospect now. The notes have lost nearly half their value in just three months since their issuance, so buyers are going to be looking to recover a portion of their losses."

  29. Posted by Everyone | March 26, 2012 at 12:36 PM

    Offensively unfunny. Never comment again.

  30. Posted by Texashedge | March 26, 2012 at 12:37 PM

    Same old Kenny. Ten pounds of shit in a five pound bag.

  31. Posted by Cut Me | March 26, 2012 at 12:47 PM

    Also admitted to wanting to bang his brother's wife.

  32. Posted by trojan_ | March 26, 2012 at 12:47 PM

    "Calm the Fuck Down!" = Americanized "Keep Calm and Carry On"

  33. Posted by in the 1% | March 26, 2012 at 12:54 PM

    Respect!

  34. Posted by Procedural | March 26, 2012 at 1:00 PM

    The answer is much of the, "seg." funds were in fact at J.P. and as the article says had just been moved from there to house accounts days previously.

    If you wanted to fund a man account, you wired funds to Harris ( BMO ) or Chase for nearly all currencies except YEN.

  35. Posted by Grand jury | March 26, 2012 at 1:04 PM

    you are omitting the, "if indicted" clause which obviates all else.

    Justice can only be requited, when Corzine is indicted.

  36. Posted by Guest | March 26, 2012 at 2:13 PM

    JC: This is Governor Corzine. Is Jamie there?
    ASST: Please hold.
    JD: Yes, Jon?
    JC: It's only 175, can't you cut me a break. You use more than that to fill up your heavy bag for a workout.
    JD: You're in business with Paulie now, Jon. F*ck you, pay me.

  37. Posted by Abe_Froman_ | March 26, 2012 at 3:01 PM

    DB rule #1 – You Do NOT Talk About Jamie D

  38. Posted by buboe | March 26, 2012 at 6:58 PM

    Hey, we've all done that now…

  39. Posted by Guest | March 27, 2012 at 10:02 AM

    Wow

    - Guy who doesnt understand how this is still funny

  40. Posted by Cortez Kugler | May 10, 2012 at 1:25 AM

    Howdy there, You’ve got performed an incredible job. I’ll definitely digg it and for my element recommend to my close friends. I’m sure they will likely be benefited from this web page.