$$$ U.S. Bank Lending Falls, Profits Rise [WSJ]
$$$ Buffett’s Goldman Deal Is Topic in an Insider Case [DealBook]
$$$ Study Finds Germans Incapable of Enjoying Life [Der Spiegel]
$$$ This happened:
New York nun asks Blankfein if he’ll hire her, Blankfein says “I don’t think I could outbid your current employer” #godswork
— Tracy Alloway (@tracyalloway) May 24, 2012
$$$ Man who formerly claimed to be a “certified member of the quiet society of pimps” and asked to be certified as an expert witness in pimpology now says “I was a failure as a pimp. I was a much better car salesman, I was a much better telemarketer, I was much better when I was selling mortgages by phone. I really wasn’t very good at it. A lot of it was exaggerated.” [NYP, earlier]
$$$ A leading electronic trading platform is looking for a CDS / fixed income sales associate [DBCC]
$$$ Big European funds dump euro assets [FT]
$$$ This is some enjoyable Eliot Spitzer schadenfreude [Concurring Opinions]
$$$ “The festival features 10 different types of bacon, plus all things bacon — bacon sausage, bacon meatballs, bacon doughnuts, bacon butterscotch cupcakes — even a walking slab of bacon! There’s a bacon-eating contest, bacon lectures and a bacon song contest — and yes, there’s a crowning of the Bacon Queen! Contestants are asked questions like their favorite memory of bacon, their favorite kind of bacon and their favorite way to cook bacon (the most common answer is “naked,” incidentally).” [CNBC]
$$$ Unabomber lists self as ‘prisoner’ in Harvard directory [Boston Globe]
One tale many love to tell about Richard S. Fuld, besides the one involving him destroying an 158 year-old institution, is that of the time he got into a fistfight at his son’s hockey game, with a parent from the opposing team. Though there have been many stories over the years of adults who lack impulse control throwing down at their children’s sporting events, perhaps people were fascinated by the fact that the the CEO of a public company was unable to reason that punching someone in the face at a Peewee hockey game = bad, keeping your hands to yourself = good. On that note, one sports fan reports that Fuld has since matured, and realizing his own limitations, now travels with protection (for himself/spectators in his section).
“Was at the Rangers/Devils game last night sitting a few rows behind Dick Fuld and his wife. He was with two goons who were clearly his body guards, one sitting next to him in a tan jacket and the other one standing behind him in black. Fuld was wearing a suit…I guess to try and look like he actually has a job he was coming from befoe the game.”
U.S. Securities and Exchange Commission investigators have concluded their probe of possible financial fraud at Lehman Brothers Holdings Inc. and determined that they will probably not recommend any enforcement action against the firm or its former executives, according to an excerpt of an internal agency memo. Under a heading reading “Activity in the Last Four Weeks,” […]
Are the Yankees for sale? “Baseball and financial sources” say yes. People with the last name Steinbrenner say no. Perhaps the latter, though, just needs to meet the right buyer? A buyer who’s got money to spend? A buyer who wants a Major League Baseball team so badly he can taste it? Who has so far bid on not one, not two, but three organizations in the last year? A buyer who can do this the easy way or the hard way? He’s going to get his hands on a team one way or another and the sooner people realize that the better. So everyone is preparped, when the Big Guy is running the show, the first order of business will be:
a) Shitcan A-Rod
b) Reassign A-Rod to clean SAC’s offices
c) Rehire Ping Jiang to discipline underperforming players
d) Gather all Yankee employees and unleash four hour-long string of obscenities about garbage performance
e) all of the above
Rochdale analyst Dick Bové loves fairy tales as much as the next guy. He loves the romance, he loves the drama, he loves the idea of magical footwear. Does he start every morning asking the question, “Mirror, Mirror on the wall, who’s the fairest analyst of them all?”? Yes. Does he consider Mike Mayo and Meredith Whitney his evil step-sisters? Yes. Does he dream about being awoken from his slumber by a handsome prince? But even Dick knows that five minutes after the prince wakes you up you’re going to be bitching to your girlfriends about being stuck with this asshole who lets the dishes pile up like you’re the god damn maid service.
Everyone knows that when the handsome prince kissed the beautiful Snow White she awakened and everyone lived happily ever after. “It’s in the book” said comic John Standley when discussing another one solution character Little Bo Peep. This “one solution fits all,” or what I like to call the Snow White Syndrome, is a core belief of most who look at the financial crisis. There are three examples of this in today’s press: Just about everyone is unhappy that the EU leaders could not solve all of the European debt problems with one single solution – i.e., creating Euro Bonds that absorbed all individual country debt. In today’s Financial Times Senator Sherrod Brown (OH, Dem.) and Dallas Fed President Richard Fisher have a single solution to the nation’s banking problem – i.e., break up the big banks. The Wall Street Journal has a different single solution to the problems in banking – i.e., eliminate hedging in bank portfolios.
Then there are the other big-time single solutions: The central banks in the North Atlantic Communities believe that by printing money economic woes will go away. Conservatives argue that by cutting taxes, this nation’s economic woes will disappear. The President and Congress believe that by passing laws the economic cycle will be eliminated (“kinda” like the dot-comers who had already eliminated the economic cycle in the 1990s). The Snow White Syndrome is everywhere. We only need to find that prince with the potent lips. The problem, of course, is that no single solution quickly arrived at is likely to achieve the results promised.
Snow White Syndrome [Rochdale Research]
Market microstructure is a thing that I don’t really understand and that seems daunting to me so I’ll pass this along as tentatively as possible, but: I thought this piece was really good.* Again, not my area, so if you disagree just get furious at me in the comments, but I thought it might be […]
Europe Plans Girds Greece Exit (WSJ)
Emerging from Wednesday night’s informal European Union summit, Italian Prime Minister Mario Monti said most leaders had backed issuing common debt, or euro-zone bonds, to help support troubled members. But Germany and others opposed them and demanded Greece do more. “We want Greece to remain in the euro zone,” German Chancellor Angela Merkel told reporters after nearly eight hours of talks. “But the precondition is that Greece upholds the commitments it has made.”
Citi: Greek To Exit Euro, New Currency To Fall 60% (CNBC)
Greece will leave the euro zone next year and the country’s new currency will “immediately fall by 60 percent,” according to Citi chief economist Willem Buiter. “The elections (on June 17th) will not produce a viable government that can follow the troika plan, leading to a stalemate between the Greek government and official creditors, and to the suspension of EFSF-IMF funding,” Buiter wrote in Citi’s latest Global Economic Outlook.
Slim Family Sees European Crisis As Good Time To Invest (Bloomberg)
Carlos Slim sees Europe’s debt crisis as a “good moment” to apply his strategy of investing in times of turmoil, said the billionaire’s son, America Movil SAB Co-Chairman Carlos Slim Domit. America Movil, controlled by the elder Slim, announced a $3.4 billion bid to increase its stake in former Dutch phone monopoly Royal KPN NV earlier this month. While the acquisition would be Slim’s first major European foray, it follows a longstanding pattern, his son said. America Movil tries to stay as efficient and financially sound as possible so that it can quickly capitalize on fresh opportunities, he said. “When hard times come, you can look at opportunities in a very agile way,” Slim Domit, 45, said in an interview this week in Mexico City. “Europe is in a good moment.”
After Facebook Fiasco, NYSE-Nasdaq Rivalry Heats Up (WSJ)
“In the short term, if I’m deciding which platform to go with, I’d think twice at this point” before choosing Nasdaq, said Sang Lee, managing partner with Aite Group, a consultancy that researches exchanges.
Investors Leery Of Paulson’s Big Gold Bet (NYP)
Investors are upset over Paulson’s huge gold positions — specifically, his outsize holding of AngloGold Ashanti, down 20 percent this year. That has dragged down two of Paulson’s funds. “I would be happier if he cut the gold position in half,” says one investor who put in a notice to take his money out of the fund in June. “He would have been up 4 percent in the first quarter if it weren’t for the goddamned gold.”
Auction Of Ronald Reagan’s Blood Stirs Debate (WSJ)
Since his death in 2004 at age 93, President Ronald Reagan’s popularity has only increased. Republican candidates invoke his name and policies. About 400,000 visitors a year flock to his hilltop museum outside Los Angeles, where a gift shop sells biographies, photos and his favorite jelly beans. Many people, it seems, want a piece of Mr. Reagan. But now, the sale of a very personal effect of the late president is stirring a controversy. Bidding for a vial purported to hold Mr. Reagan’s blood topped $14,000 Wednesday in an online auction scheduled to end Thursday—if the Ronald Reagan Presidential Foundation doesn’t try to block the sale first. PFC Auctions, based in the British Channel Islands, is offering the vial, said to have been obtained from a Maryland laboratory after the failed assassination attempt on Mr. Reagan in 1981. The sample was sent to the lab to test Mr. Reagan’s blood for lead. A lab employee kept the vial as a memento and later passed it on to her adult child, according to the auction site. The head of the Reagan Foundation, a nonprofit group, called the sale “a craven act” and is fighting to stop it. It is uncertain what claims, if any, the foundation may have on the vial, which appears to contain dried blood residue, as depicted in a picture on the auction site…The seller, an admirer of Mr. Reagan’s free-market policies, said in comments on the auction page, “I was a real fan of Reaganomics and felt that Pres. Reagan himself would rather see me sell it rather than donating it.”
Morgan Stanley, Others Make Profit of $100 Million Stabilizing Facebook (WSJ)
These gains are expected to be offset somewhat by losses associated with reimbursing clients who lost money because of technology snafus at the Nasdaq Stock Market in Facebook’s first day of trading, one of these people added.
The Next Treasury Secretary (NYT)
On the Democratic side, possibilities include Laurence D. Fink of BlackRock, the asset manager; Erskine Bowles, who served on President Obama’s National Commission on Fiscal Responsibility and Reform; Daniel K. Tarullo, a member of the Federal Reserve Board; and Roger C. Altman, the investment banker. For the Republicans, the front-runners include Robert B. Zoellick, the head of the World Bank; John B. Taylor, the Stanford economist; Glenn Hubbard, the head of Columbia Business School and a Mitt Romney adviser; and Kevin Warsh, a former member of the Federal Reserve Board.
Spain To Recapitalize Bankia (WSJ)
The Spanish government will provide about €9 billion ($11.4 billion) to cover Bankia SA’s provisioning needs, Finance Minister Luis de Guindos said Wednesday, in the latest sign that Spain’s economic deterioration is forcing authorities to inject more public funds to bail out ailing banks. Since Bankia won’t be able to meet provisioning and capital needs, Spain’s Fund for Orderly Bank Restructuring will be ready to inject capital into Bankia’s unlisted parent company, Banco Financiero & de Ahorros SA, which holds the company’s most toxic real-estate assets, Mr. de Guindos told legislators in Parliament.
Indian State OKs Shooting Tiger Poachers On Sight (AP)
A state in western India has declared war on animal poaching by allowing forest guards to shoot hunters on sight in an effort to curb rampant attacks on tigers and other wildlife. The government in Maharashtra says injuring or killing suspected poachers will no longer be considered a crime. Forest guards should not be “booked for human rights violations when they have taken action against poachers,” Maharashtra Forest Minister Patangrao Kadam said Tuesday. The state also will send more rangers and jeeps into the forest, and will offer secret payments to informers who give tips about poachers and animal smugglers, he said.
$$$ Facebook Banks Said To Make $100 Million On Stabilizing Stock [Bloomberg, earlier]
$$$ The Modest Worth of Big Banks [NYT]
$$$ “While we’re on the subject, we’d be remiss not to note that Mr. Muniyappa wore jeans and an untucked plaid button down, prompting New York Times legal eagle Peter Lattman to poll observers on the last time they’d seen a witness take the stand without a necktie. ‘Maybe not at the trials The Times covers,’ a wiseacre snapped.” [NYO]
$$$ Stress! An Energy Source Of The Future? [The Awl]
$$$ “Representing the sovereign in these affairs is just more fun. It is a mixture of politics, finance and law, and theater,” [sovereign restructuring lawyer Lee Buchheit] said. Buchheit recalled an Asian finance minister – referring to her only as “The Iron Lady” – resting a hand on his arm as tension mounted at 3 a.m. in a marathon meeting and saying: “I know you’ll get us through this.” [Reuters]
$$$ In defense of private equity: Japan [Noahpinion]
Is that how it is?
NYSE Euronext and Facebook have exchanged phone calls and e-mails about the possibility of the company switching its listing from Nasdaq OMX Group, according to a person familiar with the matter. Facebook, which listed on the Nasdaq Stock Market on May 18 after completing the world’s biggest initial public offering by a technology company, is listening to the New York Stock Exchange, said the person, who asked not to be named because the discussions are private.
It did not take long for plaintiffs’ lawyers to realize that there was good money to be made by complaining about the Facebook IPO – there are at least two class actions against the company and underwriters so far, not to mention other class-action lawsuits against NASDAQ for screwing up trades. The securities-fraud lawsuits are […]
After Raj Rajaratnam got what prosecutors say was an illegal tip about Goldman Sachs Group Inc. (GS), a partner at Galleon Group LLC who was excluded from the trade turned red-faced and angry, a witness at the Rajat Gupta trial testified. Prosecutors claim that Gupta, who was a Goldman Sachs director, tipped Rajaratnam on Sept. […]
What if Mark Zuckerberg wore cutoff jean shorts and a mesh Hawaii 69 football jersey to the Facebook roadshow?
What if Mark Zuckerberg wore a Mr. Peanut costume to the Facebook roadshow?
What if Mark Zuckerberg wore a tuxedo tee-shirt to the Facebook roadshow?
What if Mark Zuckerberg dressed as Robocop for the IPO roadshow?
What if Mark Zuckerberg wore Crocs to the Facebook roadshow?
What if Mark Zuckerberg entered the roadshow as a member of the Lollipop Guild?
What if Mark Zuckerberg wore Capri pants to the Facebook roadshow?
What if Mark Zuckerberg wore a wetsuit to the Facebook roadshow?
What if Mark Zuckerberg wore a Lacoste polo with an argyle sweater wrapped around his neck to the Facebook roadshow?
What if Mark Zuckerberg wore the Hannibal Lechter mask from Silence of the Lambs to the Facebook roadshow?
Would things have turned out differently? If Zuckerberg had left the hoodie at home? One guy says yes.
“I felt that had Mr. Zuckerberg worn a jacket instead of a hoodie (showing them that he respected them enough to “dress up”), he would have made a statement to them that he cares about their needs, and will act in their best interest. He chose not to make that statement, and the current share price demonstrates that investors have chosen not to support Facebook shares. All of this is iterative. Had Facebook issued 10 million shares instead of 421 million, the stock would probably be much higher. However, had Mr. Zuckerberg worn a jacket and reassured investors that he is aligned with their expectations, perhaps more people would be stepping in to buy now.”
And my final words of wisdom are: Believe in yourself. A few years ago, I thought I had seen it all, having had this front row seat to so much happening in business globally. But then I received a call that led to one of the most exciting days of my life. It was the […]
Merkel Heads For Debt Showdown With Hollande At EU Summit (Bloomberg)
German Chancellor Angela Merkel said she won’t shy away from disagreeing with French President Francois Hollande at the summit in Brussels over dinner at 7 p.m., the next major appointment of leaders seeking to allay concerns that Greece may quit the euro, putting Spain and Italy at risk as well. Good cooperation “doesn’t exclude differing positions,” Merkel told reporters yesterday in Chicago during a meeting of the North Atlantic Treaty Organization. “These may very well arise in the context of the European discussions.”
Morgan Stanley Says It Played By Rules In Facebook’s IPO (Bloomberg)
“Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs,” Pen Pendleton, a spokesman for the New York-based investment bank, said yesterday in an e-mailed statement. “These procedures are in compliance with all applicable regulations.”
Inside Facebook’s Fumbled Offering (WSJ)
Interviews with more than a dozen people involved in the IPO reveal that Facebook approached its deal differently than companies typically do. Facebook CFO Ebersman kept a close grip on every important decision on the stock offering, not deferring to his bankers the way many companies do, according to the people familiar with planning…Mr. Ebersman had asked Facebook’s early shareholders to fill out a form indicating how many shares they would like to sell in the IPO and at what price, and to indicate whether they would be willing to sell more if the share count was increased, the person said. When Mr. Ebersman learned from Mr. Grimes that there was outsize investor demand, he went back to those forms and reached out to early shareholders to cash out more stock, the person said.
Gupta On Rajaratnam’s VIP List (NYP)
Jailed hedge fund manager Raj Rajaratnam deemed only a handful of people — including ex-Goldman Sachs director Rajat Gupta — important enough to disturb his trading day, Rajaratnam’s former assistant testified yesterday in Manhattan federal court. Carlyn Eisenberg, the government’s first witness in the trial of Gupta on insider-trading charges, said his name was on a “special list” of those whose calls she was to put through to her then-boss. She said it was one of those calls in September 2008 that triggered a flurry of trading activity at Rajaratnam’s Galleon Group, shortly before Goldman Sachs announced it had landed a $5 billion investment from famed investor Warren Buffett…Eisenberg recalled getting a call several years ago from a man whose voice she recognized as being on the list at the time, although she said she couldn’t identify it now as belonging to Gupta. The call, which phone records later showed came from Gupta’s McKinsey & Co. office, arrived minutes before the close of markets on Sept. 23, 2008, according to Eisenberg. The caller “said it was urgent and he needed to speak to Raj,” she told jurors.
After Rajaratnam took the call, he immediately brought Galleon co-founder Gary Rosenbach into his office. When Rosenbach emerged, he began making calls, saying, “buy Goldman Sachs,” Eisenberg testified.
More Finance Chiefs Willing To Pay Bribes, Global Survey Finds (Bloomberg)
Fifteen percent of chief financial officers around the world are willing to make cash payments to win or retain business, according to a survey of executives interviewed by the accounting firm Ernst & Young LLP. The firm’s annual “global fraud survey” of 400 finance chiefs, interviewed from November to February, found a greater tolerance of bribery compared with the previous year, when 9 percent said they would make cash payments. Five percent of CFOs said they would misstate financial performance, while 3 percent said that the year before, according to the survey.
Troubleshooter In Running To Succeed Dimon (FT)
For relaxation, Matt Zames shoots things. Mostly birds. But the 41-year-old JPMorgan Chase executive does not have much free time for hunting now. He is busy mopping up his bank’s biggest mess since the financial crisis. Last week Mr Zames was appointed to replace Ina Drew as head of the bank’s chief investment office, whose London-based trading unit has wiped $30bn off its parent’s market capitalisation. “When you’re in a difficult spot you find out who you want to be in a foxhole with,” says Jamie Dimon, chief executive of JPMorgan. “Matt puts his hand up.”
Barclays To Sell Entire BlackRock Stake For $5.5 Billion (Bloomberg)
The lender sold about 26.2 million shares to money managers for $160 each, London-based Barclays said in a statement yesterday. Underwriters have the option to purchase an additional 2.6 million. New York-based BlackRock will buy back a further 6.38 million shares at $156.80 per share, about 8.8 percent less than the stock’s $171.91 close on May 18, the last trading day before the deal was announced.
Tall Tales About Private Equity, By Steve Rattner (NYT)
To be sure, some of Bain’s large leveraged buyouts — notably, Domino’s Pizza — added jobs. But Mr. Romney left Bain Capital two months after the Domino’s investment (7,900 new jobs claimed) was finalized. Aware of private equity’s reputation, Mr. Romney still trots around the country erroneously calling himself a “venture capitalist.” And in a further effort to deflect attention from the Bain Capital debate, Mr. Romney last week argued that President Obama was responsible for the loss of 100,000 jobs in the auto industry over the past three years. That’s both ridiculously false (auto industry and dealership jobs have increased by about 50,000 since January 2009) and a remarkable comment from a man who said that the companies should have been allowed to go bankrupt and that the industry would have been better off without President Obama’s involvement. Adding jobs was never Mitt Romney’s private sector agenda, and it’s appropriate to question his ability to do so.
Stryker CEO Sought Nod For Romance (WSJ)
Mr. MacMillan, 48 years old, was forced out partly because certain board members became bothered by his handling of a relationship with a former flight attendant for the company’s corporate jets while his wife pursued a divorce, according to people familiar with the matter. What distinguishes his story from others in this well-worn genre is that, according to a person familiar with Mr. MacMillan’s version of events, the CEO approached Mr. Parfet and Louise Francesconi, head of the board’s governance and nominating committee, in late September seeking their approval to date the employee, Jennifer Koch.
Facebook Analysts Who Shunned Herd Now Look Like Heroes (Bloomberg)
The social networking site lost 19 percent through yesterday to $34.03 after opening at $42 on May 18. That’s consistent with warnings from Richard Greenfield of BTIG LLC and Brian Wieser of Pivotal Research Group LLC, who says the stock will slip as low as $30. It left five firms with bullish calls predicting an average rally of 36 percent and one, Tom Forte of Telsey Advisory Group, saying shares may rise 47 percent to $50.
$$$ EXCLUSIVE: Here’s The Inside Story Of What Happened On The Facebook IPO [BI / Henry Blodget]
$$$ “A senior Nasdaq Stock Market official told customers Tuesday afternoon that it would have pulled the plug on Facebook Inc.’s initial public offering had it known the full extent of the technical problems that plagued its systems.” [WSJ]
$$$ Occupy Wall Street Alternative Banking Group Files Amicus Brief on Side of Judge Rakoff in SEC v. Citigroup; the brief is very clever [NC]
$$$ A former high frequency trader proposes eliminating the subpenny rule [Chris Stucchio]
$$$ At Hearing, Regulators Discuss JPMorgan Investigation [DealBook]
$$$ Disclosure by Short-Sellers Would Improve Market Clarity [DealBook / Steven Davidoff]
$$$ “A Silicon Valley tech executive faces charges after authorities say he put fake bar codes on hundreds of Lego sets at various Target stores so he could buy the toys at steeply discounted prices, then sell them online for thousands of dollars in profits.” [AP]
Robert C. Jones is also a devoted practitioner of transcendental meditation. Now that he has his own firm, System Two Advisors L.P, he’ll promote “TM” among his employees, and fellow quants. “‘This would be good for you,’ he told me. He knows I’m kind of tightly wound,” says Mr. Asness, who’s known for tantrums involving […]
Pop-quiz: you’re a first year analyst at Goldman Sachs, with a little more than twelve months left until your two year commitment is over and you are free to take a job elsewhere. Do you A) take part in private equity and hedge fund recruiting now, and, if someone was particularly impressed with your junior mistmaking skills, accept an offer for a gig beginning in June 2013 or B) tell the buyside you are sorry but are prohibited from engaging in such activities at this time, as they would pose a conflict of interest for Goldman Sachs? At this time, GS JM’s believe the correct answer is A, while higher-ups, who believe there is a firm policy in place that says no analyst shall take part in recruiting until six months from the time they’ve finished the two year program, are going with B. So now this is happening:
Goldman has been firing IBD first year analysts with buyside offers. Senior people are calling up funds to ask if any analysts have received offers from them. A bunch have been cut so far.
A bunch, we’re told, is in the ballpark of four, which seems like enough to put the fear of god into people.