$$$ Spain reveals €100bn capital flight [FT]
$$$ Goldman’s Cohn Warns Of Poaching Risks From Further Cuts [Bloomberg]
$$$ Larry Fink’s hedge-fund-manager son Josh isn’t having a great time of it [AR-Alpha]
$$$ “T. Boone Pickens, who apparently follows Drake on Twitter, sure isn’t [impressed], replying ‘The first billion is a helluva lot harder’ with a mic-drop retweet.” [Gizmodo]
$$$ RAND Corporation is looking for a business analyst in Santa Monica [DBCC]
$$$ JPMorgan CIO Swaps Pricing Said to Differ From Bank [Bloomberg]
$$$ Felix Salmon is in a fight with a startup that has “has the best part of $300,000 in interest-free financing repayable at a time of its choosing in underwear.” [Reuters]
$$$ “‘They signed off on their messages with LOL — laughing out loud,’ Police Commissioner Ray Kelly said. ‘Well, there was a person who was laughing out loud. That was Police Officer Michael Rodrigues of the 77th Precinct.'” [NYP]
$$$ Try “the Douche Burger, a $666 edible fiscal disaster that piles caviar, lobster & truffles on top of a foie-stuffed, gold-leaf-wrapped Kobe patty, smothers it with Gruyere melted with Champagne steam, and finishes it off with BBQ sauce made using Kopi Luwak coffee that’s passed through the digestive tract of the Asian Palm Civet, explaining why it ‘may not taste good, but will make you feel rich as f*ck.'” [Thrillist via Copyranter]
Mr. Jain, 49 years old, played a central role in building Deutsche Bank’s investment-banking business over nearly two decades as it reached beyond its staid commercial-banking roots. Investment banking now generates about 70% of the overall bank’s profits most quarters. He takes the [CEO] post at a time when many analysts consider the lender one […]
Tomorrow morning, Anshu Jain will start his new job as co-CEO of Deutsche Bank. Despite having previously overseen operations that produce 90 percent of the firm’s profits in any given quarter, sitting on the management committee, and generally being considered a “star” both within the company and among those who follow his work, chief executive officer is a title no one thought AJ would be given if he remained at DB, because 1) people back in Germany don’t like that he’s an investment banker and 2) “In Germany, no one can imagine an Indian working in London who does not speak German being CEO of Deutsche Bank.” To the haters’ chagrin, though, that’s exactly what’s about to happen. And if they want to continue bitching about it, they can be Jain’s guest– their insults go in one ear and out the other.
While Mr. Jain has taken German lessons, he doesn’t speak the language, and Der Spiegel, the country’s best-selling weekly magazine, ran a 12-page cover story earlier this year laying much of the blame for Deutsche Bank’s troubles at Mr. Jain’s feet.
Hedge-fund mogul Larry Robbins, founder of Glenview Capital Management, is getting married to former dancer Sarahmay Wesemael in the south of France on June 9…Robbins is divorced from Amy Robbins, who helped him start his company, and with whom he has four sons. Willowy blonde Wesemael, 33, is from New Jersey but is believed to […]
Do you want to write things on Dealbreaker? We are looking for a few more regular columnists to write regularly on the areas of their expertise and interest. Topics could include private equity, hedge funds, b-school, stripping one’s way through b-school, or something that has absolutely nothing to do with any of those things but which you are particularly passionate about. Topics like “what I am thinking about this week” or “finance!” will probably be less successful.
If you are interested, and can commit to writing a column each week or so, please get in touch and tell us who you are (a resume if you want, or just what you do) and what you’d like to write about. A sample post on your idea would also be great.
As always, if you are currently gainfully employed on Wall Street (and would like to stay that way) for a firm that would not look favorably on a part-time writing career, anonymous/pseudonymous columns are fine.
Are you among the people who mistakenly believe working for Goldman Sachs has lost its luster? That the youth of America no longer spend nights dreaming about what it’d be like to bask in the glow of Lloyd Blankfein? That a guy who couldn’t tie his shoes ’til he was 22 was able to ruin the picture they had their minds of what it would be like to one day, if they worked really hard, have Gary Cohn hike up one leg, plant his foot on a their desk, his thigh close to their face, and ask how markets were doing? Then you don’t have a clue.
Goldman’s program has grown so big that the firm has to break their start date into two groups. This week welcomed the lucky few selected for “revenue” businesses, like investment banking and trading. Next week brings “services” workers, COO Gary Cohn said at a conference Thursday. Vampire squids, Greg Smith and Delaware judges can’t keep the applicants away. “Our application pool this year was greater than it ever has been,” Cohn said.
As those of you who took the week off to study are well-aware, Saturday is CFA exam day, for all levels. And while we have complete confidence in all of your abilities, some people have expressed feeling a bit jittery about the test. For the vast majority, those fears, while normal, are unwarranted. You just need to talk it out and should consider this space a safe place to do so. For a smaller group of people, though, your fears are totally founded because, statistically speaking, you will fail. Having said that…
Back in January, after Matt found out he’d passed Level 1 (with a perfect score), a conversation occurred at Dealbreaker HQ that went something like this:
Me: So are you going to sign up for Level 2?
Matt: Eh, I don’t think so…I mean, I don’t really feel like spending the next 5 months of my life studying, y’know? And then what am I going to do? Wait around another year to take Level 3?
Me: Uh….YES, I thought that’s exactly what I thought you were going to do. Don’t you want to be a CFA charterholder? Don’t you want to go to CFA Camp?
Fast forward to last Thursday, when we’re sitting around l’office shooting the shit and someone casually mentions, “I wish I were taking the CFA next week.” Unfortunately, said someone is not because he choose not to sign up, strangely forgetting how much he loves standardized tests. That being said, if anyone is scheduled to take Level 2 but a) is suffering performance anxiety and b) wants the opportunity to read another recap of how things panned out for an editor of this site, Matt is happy to go in your place and pass it for you. With two nights of studying he gives himself a 50 percent chance (I think it’s closer to 75), you’d get those 8 hours back, and it’d make him really, really happy. If he doesn’t get to take Level 2 he’s considering the idea of the Connecticut Bar in July. Let him have this.
Just a quick update re: yesterday’s story about the group of Piedmont Driving Club golfers one member wanted to see shamed for various offenses committed during a tournament that included (but was not limited to) slapping people in the face with appendages other than their hands:
Morgan Stanley has announced that it will be buying 14% of its Morgan Stanley Smith Barney joint venture from Citi in a sort of glacially negotiated way. MS currently owns 51% of MSSB (plus $5.5bn of preferred interests), and Citi owns the other 49% (plus $2bn of preferred). You can read how they’re going to […]
At Core Of Greek Chaos, A Reviled Tax (WSJ)
So despised is the property tax that its critics—which is to say, most of Greece—refer to it as the haratsi, after a per capita tax imposed by the occupying Ottomans. About three-quarters of Greece’s households own their homes. Like many other European countries, Greece already has some property taxes. But those have been aimed mostly at higher-value properties and raised little revenue.
JPMorgan To Spin Out ‘Special Investments’ (FT)
The unit, whose investments include LightSquared, the wireless internet provider, will be moved to the bank’s corporate division and prevented from seeking fresh investment opportunities, bankers were told on Wednesday.
Woman Who Wouldn’t Be Intimidated By Citigroup Wins $31 Million (Bloomberg Markets)
Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska. Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska…In March 2011, more than two years after Citigroup took $45 billion in bailouts from the U.S. government and billions more from the Federal Reserve — more in total than any other U.S. bank — Jeffery Polkinghorne, an O’Fallon executive in charge of loan quality, asked Hunt and a colleague to stay in a conference room after a meeting. The encounter with Polkinghorne was brief and tense, Hunt says. The number of loans classified as defective would have to fall, he told them, or it would be “your asses on the line.” Hunt says it was clear what Polkinghorne was asking — and she wanted no part of it.
Jobless Claims Increased Last Week (Bloomberg)
First-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department said today. The initial claims exceeded the median estimate of 370,000 in a Bloomberg News survey of economists. The number of people on unemployment benefit rolls dropped.
For French CEO’s, Politics Means Big Pay Cuts (WSJ)
Top managers at France’s state-owned companies are expected to face significant pay cuts next month, when Socialist President François Hollande plans to begin enforcing salary caps as part of his broader electoral pledge to get tough on the rich. During the presidential campaign, Mr. Hollande vowed to curb “excessive” remunerations at France’s 52 state-controlled or partially state-owned companies by ordering that executive pay not exceed 20 times the salary of the lowest-ranking employees.
New York Plans to Ban Sale of Big Sizes of Sugary Drinks (NYT)
The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas, from energy drinks to pre-sweetened iced teas. The sale of any cup or bottle of sweetened drink larger than 16 fluid ounces — about the size of a medium coffee, and smaller than a common soda bottle — would be prohibited under the first-in-the-nation plan, which could take effect as soon as next March.
Gorman, Greifeld ‘Face’ off (NYP)
Morgan Stanley is prepared to take Nasdaq to court to recoup money it believes it lost in the flubbed Facebook initial public offering. CEO James Gorman’s investment bank, which led the now-notorious, snafu-ridden Facebook IPO, believes Bob Greifeld’s Nasdaq owes it roughly $10 million, sources said. The investment bank, which quarterbacked the $16 billion Facebook offering, had to shell out to clients a seven-figure sum to resolve a litany of Nasdaq trading glitches.
Morgan Stanley’s Facebook Analyst: Sober Man in World of Hype (Reuters)
Scott Devitt was one of a number of analysts to lower his revenue and earnings expectations for the social media giant after the company informed analysts that it was dropping its quarterly and annual revenue guidance. Facebook also issued an amended prospectus cautioning that the shift of its users to mobile platforms could have a negative impact on revenue growth. Such a move was highly unusual because it occurred just days before Facebook’s highly anticipated IPO, whose lead underwriter was Morgan Stanley, Devitt’s employer. The investment bank not only had control over the process, but over 38 percent of Facebook shares being sold. Devitt’s and other analysts’ revised revenue forecasts were shared via phone calls with institutional investors, but not with retail investors, before the stock began trading publicly. That in turn raised questions over whether the playing field was skewed against Main Street investors from the start and sparked lawsuits.
Citigroup Debt Viewed As Risky (WSJ)
Gimme Credit, a fixed-income research company based in New York, said it expects debt issued by the third-biggest U.S. bank by assets to perform less well over the next six months than bonds issued by the company’s peers.
Russian Zuckerberg Throws Money Paper Planes At Passersby (MSN)
Russian millionaire Pavel Durov reportedly spent last weekend flying paper airplanes made from 5,000-ruble notes (equal to about $160) out the window of his office in St. Petersburg. The 27-year-old gave away around $2,000 before he stopped because “people turned into animals” grabbing the cash. Durov is the CEO of Russia’s largest social network Vkontakte, which sort of makes him the Russki Mark Zuckerberg.
Scarf-Wearing Pig Stuns Motorists (UPI)
Pennsylvania State Police said a baby pig wearing a scarf crossed rush hour traffic in Pittsburgh and disappeared into the woods. Police said the fashionable swine was spotted crossing the inbound lanes of Parkway West near the Green Tree exit around 8:30 a.m. Wednesday, and many motorists pulled off the parkway and stopped to take pictures of the unusual pedestrian. Troopers said the pig had crossed over a guardrail and into the woods by the time they arrived, and they were unable to locate the animal.
$$$ EU Weighs Direct Aid To Banks As Antidote To Crisis [Bloomberg] $$$ Tempted, U.S. Funds Hop the Pond [WSJ] $$$ Two top Fed officials cool to more easing [Reuters] $$$ “Mr. Gupta’s lawyer sought to depict the Rajaratnam brothers and other Galleon employees as braggarts who lied about having inside sources to impress their […]
Morgan Stanley Chairman and Chief Executive James Gorman defended the securities firm’s role in Facebook’s tumultuous initial public offering, telling employees internally that the firm worked “100% within the rules” and calling the steep decline in Facebook’s stock “disappointing.” Mr. Gorman, in a weekly strategy meeting Tuesday that was later webcast to employees, said “speculation of nefarious activity” surrounding the social networking company’s IPO is untrue. Contrary to some reports, he said, he wasn’t “aware of any dissent” among the underwriting firms regarding Facebook’s IPO price of $38 a share. The discussion, called a strategy forum, is held weekly at the firm. The event, which Mr. Gorman attends periodically, features commentary from analysts and economists and is linked to on the company’s internal website.
Mr. Gorman told employees to “be proud of the job your colleagues did [in the Facebook IPO process] and don’t judge us based upon what happened over a couple of days.” Commenting on Facebook’s stock performance, Mr. Gorman acknowledged the first day of trading “matters” but added investors should also judge an IPO based on its share price after 30 days, 90 days and 12 months.
You can, if you’re interested, read a debate about bankers’ ethical obligations in IPOs here and here and here, because Facebook. The gist of the debate is: should we be congratulating Facebook’s bankers for being super ethical, because they helped their issuer client top tick the stock, which was what the client wanted, even though […]
Sir Philip Hampton said investors who owned RBS shares before its £45.5bn bailout in October 2008 were likely to be dead before the bank’s value recovered to anything close to its pre-crisis level. “I don’t think shareholders wealth is likely to be restored any time in my lifetime or some lifetimes beyond,” said Sir Philip, […]
Last month, a fight broke out at the New York Athletic Club that a witness described as a “nondiscriminatory ragematch” involving “young people, old people, girls, members, and nonmembers,” which started as a tiff over a woman and “escalated into a brawl involving three fighting wolfpacks,” wherein “tables were overturned or moved to the room’s periphery to crate a lion’s pit for the battle,” a “fat pudgy kid came out of nowhere, laid out a larger man with a blow to the head and was tackled by a crowd,” approximately two noses were broken, and the police made three arrests. The club’s President was pretty, pretty embarrassed by the whole thing, as indicated in a letter to members in which he wrote, “I cannot state forcefully enough how abhorrent this even is to me…It is the responsibility of each and every member to protect and embellish the standing of the N.Y.A.C.” And while Manhattan prosecutors’ promise to go afterthe guy responsible for most of the damage ensures the shame NYAC officers are feeling won’t die down any time soon, perhaps they can take some small solace in the fact that they were hitting each other only with their hands.
Back in February, in his annual letter to investors, Berkshire Hathaway chief Warren Buffett spent a good bit of time discussing why one shouldn’t own gold. Beyond the fact that, according to WB, gold doesn’t “change in size and [is] incapable of producing anything,” and you’d be much better off buying farmland (which “a century from now will have produced staggering amounts of corn, wheat, cotton and other crops and will continue to produce that valuable bounty”) or shares of Exxon Mobil (which “will probably have delivered trillions of dollars in dividends to its owners,” the Oracle of Omaha had one incontrovertible, be all end all reason for eschewing the metal: its unfuckability. Oh sure, you can do things to a cube, you can fondle it, you can talk dirty to it, you can send nude pictures of yourself, you can even drill a hole in it and fuck it senseless, but, the thing is, the cube will not respond. No reciprocation, no gratitude, not even a sign it enjoyed itself. For Buffett, no further argument was necessary as to the worthlessness of the commodity. (Silver, on the other hand, will make you feel like you’re 18 again.) Anyway, David Einhorn sort of feels the same way about the dollar.
Nassim Taleb, author of “The Black Swan,” said he favors investing in Europe over the U.S. even with the possible breakup of the single European currency in part because of the euro area’s superior deficit situation. Europe’s lack of a centralized government is another reason it’s preferable to invest in the region, said Taleb, a […]