May 2012

  • News

    Yahoo! RésuméGate: Day 6

    Patti S. Hart, the Yahoo director who headed the board search committee that picked Scott Thompson as the company’s chief executive, will not stand for re-election, a person briefed on the matter told DealBook on Tuesday. Ms. Hart’s departure, which could be announced as soon as Tuesday afternoon, is the first significant response by Yahoo amid the growing controversy over Mr. Thompson’s academic record. The company is also expected to formally announce later on Tuesday the formation of a three-member board committee to investigate Mr. Thompson’s hiring and how erroneous academic information appeared in official company documents. [Dealbook, earlier]

    / May 8, 2012 at 12:50 PM
  • News

    Layoffs Watch ’12: Bank Of America

    The aforementioned layoffs are said to begin this week.

    “FYI: BofA cuts are expected to start Thursday, thought to be 20% across the board in IB. All levels affected but with 2nd and 3rd year VPs who are not going to make director, of which there is a glut, hit especially hard. If you’re a first year VP (without acct coverage responsibilities), you’re probably going into the superpods.”

    / May 8, 2012 at 11:56 AM
  • News

    Opening Bell: 05.08.12

    When Facebook Met Wall Street (WSJ)
    On Monday, investors piled into the hotel to hear what Mr. Zuckerberg and his lieutenants had to say about the offering. At one point, the line, leading to a second-floor ballroom where the meeting was scheduled to be held at 11:45 a.m., stretched down to the first floor and spilled out of the hotel for nearly half a city block. At least one investor waiting in line said he didn’t expect anything to be revealed that wasn’t already in Facebook’s securities filings. Rather, he was there to take in the show, and lunch (which was Cobb salad and grilled chicken). A 30-minute video about Facebook, which had been widely distributed before Monday, led the lunch, according to attendees. The next part of the presentation was briefly delayed by Mr. Zuckerberg’s absence. The CEO was in the bathroom, explained Chief Financial Officer David Ebersman to attendees. (Mr. Ebersman wore a navy suit.)

    Yahoo CEO Apologizes in Memo, Board Meets (Reuters, earlier)
    Yahoo Inc’s board convened on Monday afternoon to discuss the mounting upset surrounding Chief Executive Scott Thompson, who has apologized to employees after being accused last week by activist investor Daniel Loeb of padding his resume, a source with knowledge of the matter said…”I want you to know how deeply I regret how this issue has affected the company and all of you,” Thompson wrote in his first extended memo to employees since the disclosures emerged on May 3. “We have all been working very hard to move the company forward and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you.”

    Billion-Dollar Traders Quit Wall Street For Hedge Funds (Bloomberg)
    Wall Street’s biggest banks have lost almost two dozen of their most-profitable credit traders in the past 13 months as regulators limit the kind of risk-taking that amplified the housing crisis four years ago. As banks slash or defer pay and reduce the amount they’re willing to wager, the traders are seeing better opportunities at hedge funds and investment firms that seek to profit in markets lenders are retreating from.

    Wall Street Banks Depressed In Secular Shift (Bloomberg)
    To Kevin Conn, who has been analyzing bank stocks for 15 years, the investment climate for Wall Street’s biggest firms has entered the realm of science fiction. “It’s like that Ray Bradbury short story where it rains for months in a row,” said Conn, who works for Massachusetts Financial Services Co., referring to “The Long Rain,” published in 1950. “It’s one of these terrifically depressing short stories where the weather just never changes.”

    Spain To Spend Billions On Bank Rescue (FT)
    Spain is planning a state bail-out of Bankia, the country’s third biggest bank by assets, in a move likely to involve the injection of billions of euros of public money into the troubled lender. In an abrupt reversal of policy, the Spanish government, which had previously insisted that no additional state money would be needed to clean up the country’s banking sector, confirmed that an intervention was being prepared.

    OWS Mom Snubs Plea (NYP)
    Occupy Wall Street protester Stacey Hessler, 39, arrested in November for resisting arrest and disorderly conduct, yesterday refused an offer to have her charges dismissed and will instead face a trial…Hessler had originally planned to accept the judge’s offer of an adjournment contemplating dismissal, which erases the charge if the defendant stays out of trouble for six months, but later changed her mind, her attorney said.

    SEC Orders Probe Of Watchdog Office (WSJ)
    The Securities and Exchange Commission has ordered an independent inquiry into allegations of sexual misconduct by current and former staff working for its office of the inspector general, according to a person familiar with the matter. The complaint includes allegations that the misconduct compromised certain investigations of the SEC, according to the person familiar with the situation.

    Apollo’s Profit More Than Doubles (WSJ)
    For the first quarter, Apollo reported a profit of $98 million, or 66 cents a share, up from a year-earlier profit of $38.2 million, or 33 cents a share. Economic net income rose to $1.10 from 99 cents a year earlier. Analysts surveyed by Thomson Reuters expected 78 cents a share…Total revenue rose 12% to $776.7 million, far better than the $547 million expected by analysts.

    Bank of America Offers Principal Reductions to 200,000 Homeowners (CNBC)
    “If people get these things and toss them, they won’t be eligible,” says Ron Sturzenegger, the Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance. But the offer is real, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages. It is all part of the $25 billion settlement reached this year between federal and state agencies and the nation’s five largest mortgage servicers over fraudulent foreclosure document processing (so-called “robo-signing”).

    No Repeating Slowdown Seen by U.S. With Banks to Housing (Bloomberg)
    Rising auto sales, improving bank credit and stabilization of housing are among the signs the economy is more resilient now than it was around the same time in 2010 and 2011, according to Marisa Di Natale, an economist at Moody’s Analytics in West Chester, Pennsylvania. “From where we sit right now, we think the economy looks fundamentally stronger,” Di Natale said. “Surveys of business and consumer confidence are better, the labor market data looks a lot better than it did last year, even some of the housing data looks better.”

    Ex-Tyco CFO: Gimme the $ I didn’t steal! (Reuters)
    Former Tyco International Chief Financial Officer Mark Swartz, who is serving a prison sentence for looting the company, has sued for $60 million in retirement and other money he says he is owed. The lawsuit, which was made public yesterday, accuses Tyco of breach of contract and unjust enrichment for not paying him some $48 million from an executive retirement agreement, $9 million in reimbursement for New York taxes, and other money.

    Winner Of Mexican Presidential Debate? Julia Orayen (AP)
    Who won Mexico’s presidential debate? According to the media and Twitter frenzy, at least, the victor wasn’t any candidate but a curvaceous model in a tight gown who puzzled millions by appearing on stage for less than 30 seconds during the showdown. Julia Orayen has posed nude for Playboy and appeared barely dressed in other media, but she made her mark on Mexican minds Sunday night by carrying an urn filled with bits of paper determining the order that candidates would speak. She wore a tight, white dress with a wide, tear-drop cutout that revealed her ample decolletage. The image was splashed across newspaper front pages and websites by Monday. “The best was the girl in white with the cleavage at the beginning,” tweeted former Mexican Foreign Minister Jorge Castaneda, who is also a New York University professor…Alfredo Figueroa, director of the Federal Electoral Institute responsible for organizing the debate, blamed the incident on a production associate hired by the institute to help with the debate. The institute later issued an apology to Mexican citizens and the candidates for the woman’s dress.

    / May 8, 2012 at 9:30 AM
  • M&A, News

    Martin Marietta’s Big Mouth Prevents It From Buying Vulcan

    There was a time in my life when I negotiated, I’m going to say, 100 confidentiality agreements in three months. I got what I thought was good at it, by which I mean I knew about a lot of issues and tricks and things and could often get the – often pretty junior – lawyer […]

    / May 7, 2012 at 7:32 PM
  • Banks, News

    Markets Are Telling Us That Too Big To Fail Is All Better

    Oh am I a sucker for this sort of thing: This paper proposes a theoretically sound and easy-to-implement way to measure the systemic risk of financial institutions using publicly available accounting and stock market data. The measure models credit risk of banks as a put option on bank assets, a tradition that originated with Merton […]

    / May 7, 2012 at 5:47 PM
  • News

    Facebook’s Lead Bookrunner Still Making Zuckerberg Work For It

    “FYI: Facebook still blocked at MS. Awkward. (Also, no banners or giant thumbs).” [Earlier, Related: Things that would never happen at JPMorgan]

    / May 7, 2012 at 5:42 PM
  • News

    This Is Warren Buffett Telling A CNBC Anchor How Difficult It’s Been To Bang The Guy’s Wife

    As some of you may have noticed over the years, Warren Buffett has carved out a pretty unique niche for himself in using analogies about whorehouses, porn shops, one-night stands, taking Viagra, fondling inanimate objects (or simply laying the ground work to do so) when discussing business. Regardless of the topic, no matter the setting, he’s prepared to go out of his way marry aberrant sex fetish with folksy business wisdom. So naturally, when asked by Andrew Ross Sorkin on Squawk Box this morning if a $22 billion acquisition by Berkshire Hathway that didn’t pan out earlier this year might happen at some point in the future, Buffett told the gang “It’s always possible. When a girl hangs up on me, I try again,” rather than “Sure,” or “Yeah, anything can happen,” or “Never say never, Andy.” At this point, the anchors could have moved on but Joe Kernen saw an opening for a little repartee and went for it, not realizing that he was dealing with a professional.


    [8:45

    / May 7, 2012 at 3:02 PM
  • News

    What Quality Paper Was Scott Thompson’s Yahoo Résumé Printed On? Inquiring Minds Want To Know

    Do you know what time it is? Nearly 1PM, EDT. The significance? That it is over an hour past the deadline hedge fund manager Dan Loeb put the Yahoo board on to fire CEO Scott Thompson and director Patti Hart for being résumé con artists. (Thompson, Loeb revealed last week, lied in SEC filings about having […]

    / May 7, 2012 at 12:46 PM
  • Opening Bell

    Opening Bell: 05.07.12

    Buffett Defends His Tax Rule (WSJ) The meeting was Berkshire’s first since Mr. Buffett made headlines by saying those earning more than $1 million a year should pay a tax rate of at least 30%. One questioner asked whether a CEO should keep his political views “muted,” prompting Mr. Buffett to respond that he has […]

    / May 7, 2012 at 8:38 AM
  • Write-Offs

    Write-Offs: 05.04.12

    $$$ Brussels signals easing of fiscal rules [FT]

    $$$ Treasury Announces Public Offering of AIG Common Stock [Treasury]

    $$$ AIG is buying structured credit products for yield, what could possibly go wrong? [Bloomberg]

    $$$ Berkshire Profit Doubles on Insurance Results, Derivatives [Bloomberg]

    $$$ Bloomberg News correspondent enjoys popcorn with truffle oil, baths, Polish zloties [The Billfold]

    $$$ How would you like to be a strategy and management associate at a $10bn+ hedge fund? [DBCC]

    $$$ Goldman Takes Steps to Protect Bond Turf [WSJ]

    $$$ BofA never loses money [FTAV]

    $$$ Is lying a little on your resume bad? Experts debate. [DealBook]

    $$$ Is Wall Street Hustling Facebook? [NetNet / John Carney]

    $$$ Yngve Slyngstad is mad about Greece [FT]

    $$$ Pythons Swallow Whole Deer in Florida, $6 Million Tab [Bloomberg]

    $$$ MCA, RIP [RS]

    / May 4, 2012 at 6:55 PM
  • News

    Let’s Worry About Bank of America’s Collateral Triggers

    I occasionally entertain myself thinking about this set of puzzles: (1) It is good for financial regulators and probably, let’s say, the world, if creditors are slow to pull money out of banks that run into trouble. In particular you don’t want everyone to want to move first and get their money out well before […]

    / May 4, 2012 at 6:39 PM
  • News

    Vanilla Ice: The Housing Market “Is Better Than Ever”

    Been getting your faced ripped off lately? Can’t come up with a good idea to save your life? Why not stop what you’re doing an doing and start flipping houses? Vanilla Ice has been doing so for the last fifteen years says it’s not only really fun but super lucrative as well. Now an expert, he stopped by CNBC today to talk shop and share a little business wisdom.

    Herewith, Ice’s tips for success:

    * Yesterday is history, tomorrow is a mystery
    * Take it day by day
    * Know your markets
    * Know your locations (“people like places that come with a lot of Feng shui…backyards are important– that’s why I put Tiki huts out there with a lazy river)

    Vanilla Ice On Fixing Houses [CNBC]

    / May 4, 2012 at 5:43 PM
  • News

    Here’s A Thing Charlie Munger Said

    “I think gold is a great thing to sew in to your garments if you’re a Jewish family in Vienna in 1939 but I think civilized people don’t buy gold.” [CNBC via BI]

    / May 4, 2012 at 3:48 PM
  • News

    Memo To Yahoo: Dan Loeb Will Personally Shake Out ALL The Skeletons In Your Closet If He Has To

    As you may have heard, Third Point Management is currently waging a proxy battle against Yahoo, of which it owns 5.81 percent. Last September, the hedge fund and its founder, Dan Loeb, wrote a letter to the company’s board of directors entitled “The Failures of Yahoo’s Board of Directors Necessitate a Significant Infusion of Fresh Board Talent,” in November it demanded two board seats in order to rest the ship from a bunch of bumbling incompetents, and in February, it said actually, make that four seats. Unfortunately, Yahoo resisted. Which is why yesterday, Loeb and Third Point were forced to enter into the record some damning evidence showing current YHOO CEO Scott Thompson to be a dangerous, dangerous liar, the likes of which the search engine would be wise to sever ties.

    Specifically, Third Point revealed that contrary to statements made on SEC filings, Thompson? Did not graduate from Stonehill College with degrees in both computer science and accounting but only the latter. The reason Third Point knew this to be true was because it Googled Stonehill College and found that the school did not even start offering computer science degrees until 1983, well after the time Thompson graduated. So, a liar and a liar who can’t even be bothered to cover his tracks to boot. Oh, but the résumé chicanery did not stop there. Yahoo director Patti Hart, Third Point, went on to reveal, also had her own little C.V. “error” to speak of. Whereas Ms. Hart claimed to have graduated from Illinois State University with degrees in marketing and economics, in fact, merely earned a bachelors in business administration and specialized in marketing and econ.

    Yahoo, which yesterday confirmed the résumé duplicity, clearly needed no further substantiation that these two were academic frauds. Third Point and Loeb knew this much to be true. AND YET. As of 2PM today, a whopping twenty-four hours after their lies caught up to them, they remain employed by the company. So now this is happening because apparently some people need to be put on a deadline:

    Dear Board of Directors:

    Yahoo!’s initial response yesterday to Third Point’s identification of material inaccuracies in both CEO Scott Thompson’s and Director Patti Hart’s educational record was insulting to shareholders. We assume that these initial statements were attributable to Mr. Thompson and were not made with the Board’s approval. While we appreciate the Board’s statement late last night that it would conduct an investigation, unfortunately, for this Board and this Company, it is too little and months too late.

    To assert that years of inaccurate SEC filings, website biographies and, most likely, D&O questionnaires and curriculum vitae (including, presumably, the CV provided to Yahoo! when Mr. Thompson reached out for the job) were “inadvertent” is, in our view, the height of arrogance. Mr. Thompson and the Board should make no mistake: this is a big deal. CEO’s have been terminated for less at other companies. The Company’s Preliminary Proxy Statement filed on April 27, 2012 (at page 22) states that the “minimum qualification for service as a director of the Company are that a nominee possess…an impeccable reputation of integrity and competence in his or her personal and professional activities.”

    Furthermore, Yahoo!’s response “confirming” that Ms. Hart “specialized” in Marketing and Economics, rather than having earned her degree in such subjects (as Ms. Hart has asserted in filings for years) is a similar canard. A “specialty” is not a major. It is not a “minor”. We don’t know what it is, but we do know that like Mr. Thompson, Ms. Hart has been misrepresenting her actual degree to the investing public for years. Again, we hope that the Board does not accept this feeble attempt at “spin” as a justification for Ms. Hart’s misrepresentations.

    Irreparable damage to Yahoo!’s culture will continue every day that the Board allows Mr. Thompson and Ms. Hart to remain at the helm of the Company after having clearly demonstrated that they lack even the “minimum qualifications for service as a director of the Company.” Mr. Thompson, in particular, cannot possibly have any credibility remaining with the all-important Yahoo! engineers, many of which earned real – not invented – degrees in computer science. Moreover, permitting Mr. Thompson and Ms. Hart to stay with the Company after apparently violating the Code of Ethics sends a message to all Yahoo! employees that a different set of rules applies at the top.

    Third Point, Yahoo!’s largest outside shareholder with over $1 billion invested, called yesterday for an immediate investigation if our assertions were true. The Board appears to have acceded to this demand. Its response must be swift and decisive. In that regard, Third Point will consider it grounds for further action if the Board does not take the following steps by Noon EDT on Monday, May 7th:

    1) Publicly reveal the process by which it vetted Mr. Thompson as a potential CEO candidate. This disclosure should include the release of all minutes of any meeting at which Mr. Thompson’s candidacy was discussed and any reports or other materials upon which directors relied to evaluate Mr. Thompson’s candidacy.

    2) Disclose whether any Board member, including Maynard Webb, who has long-standing ties to Mr. Thompson, and Ms. Hart, who headed the Search Committee, was aware of Mr. Thompson’s deception prior to receipt of Third Point’s letter yesterday.

    3) Provide shareholders with all information regarding the director nomination process, including the so-called “skills matrix” referred to in the Company’s preliminary proxy statement, which the Board purportedly used to determine the qualifications of various candidates, including Third Point’s nominees.

    4) Terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons.

    Finally, we urge the Board to stop wasting valuable company resources and drop its resistance to placing the Third Point nominees on the Board. We are prepared to join immediately. Once on the Board, our first tasks will be to work with the remaining Board members to find Yahoo! a new leader with the qualifications and integrity to lead the Company and install best practices of corporate governance. The Company can ill afford to continue this misguided fight with its largest outside shareholder while it has so many other fires to put out. There has been enough damage already.

    Sincerely,

    Daniel S. Loeb
    Chief Executive Officer
    Third Point LLC

    So, take the weekend to mull it over and while you’re at it, consider gathering documentation of other potentially false claims such as:

    1. His first-place finish in his 3rd grade spelling bee (do you really think a future Stonehill grad would know how to spell ‘abhinaya’?)

    2. That he bought Apple stock at $76/share (RIGHT)

    3. That he can bench 285 (sure)

    4. That he graduated high school (just don’t know)

    5. His circumcision (do you want to get to the bottom of this guy or not? If he lied about comp sci, who knows what else he’d lie about)

    Third Point Demands Yahoo C.E.O. Be Fired by Monday [Dealbook]
    Loeb Asks Yahoo To Fire CEO By Monday [MarketWatch]

    / May 4, 2012 at 3:00 PM
  • News

    Rajat Gupta’s Lawyers May Try The “Everybody Was Doing It” Defense

    There is much to like in this morning’s Journal article about the Rajat Gupta insider trading prosecution, including a nice illustration of how the inside information that Gupta allegedly passed to Raj Rajaratnam actually seems to have been out in the market already. But let’s start with the transcript of the call between Raj Rajaratnam and his trader Ian Horowitz, which the Journal has redacted not for confidentiality but for saltiness:

    Just so you can see Raj Rajaratnam saying “fuck” a lot, the full transcript of that call is here. But, anyway, the Journal story:

    / May 4, 2012 at 1:57 PM
  • News

    Opening Bell: 05.04.12

    BofA Sees $5 Billion Collateral Need in Credit Downgrade (Bloomberg)
    A two-level downgrade of long-term senior debt ratings would have prompted the bank to post about $5.1 billion of collateral tied to derivatives contracts and other trading agreements as of March 31, the Charlotte, North Carolina-based firm said yesterday in a regulatory filing. It would have had to post an additional $1.1 billion of collateral if trading partners opted to tear up contracts in a two-level cut.

    RBS claims ‘pleasing progress’ though loss triples (AP)
    RBS, 82-percent owned by the British government after a massive bailout in the global the financial crisis, posted a 2011 first quarter net loss of £528 million. The lender said losses soared owing to an increase in the value of its outstanding debt to £2.46 billion. “As RBS’s credit spreads tightened during the quarter, a charge of £2,456 million was booked for (our) own credit adjustments,” RBS said in a statement. But the bank’s underlying performance was brighter, with RBS posting a first quarter operating profit of £1.18 billion. RBS also confirmed that it would repay the last of emergency state loans totalling £163 billion but the British government will still own almost all of the bank after a £45.5 billion bailout following the 2008 financial crisis. “The start of 2012 has shown pleasing progress at RBS within the context of a flat economic environment,” chief executive Stephen Hester said in the statement.

    Employers in U.S. Added Fewer Jobs Than Forecast in April (Bloomberg)
    Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 gain in March that was larger than initially estimated, Labor Department figures showed today in Washington. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance. The jobless rate fell to a three-year low of 8.1 percent, and earnings stagnated.

    Facebook Targets $96 Billion Value (WSJ)
    With the pricing, Facebook is anticipated to raise as much as $13.6 billion, above earlier expectations of $10 billion. In a regulatory filing, Facebook said the company would seek to sell 337.4 million shares, with about half of those being sold by founders, employees and investors. The only U.S. issuers that have raised more money in an IPO were Visa Inc. at $19.7 billion in 2008 and General Motors Co. at $18.1 billion in 2010.

    Zuckerberg Facebook IPO to Make Him Richer Than Ballmer (Bloomberg)
    So that’s exciting.

    Warren Buffett Has ‘No Plans To Invest In Facebook IPO’ (CNBC)
    When asked whether the current attention surrounding Internet IPOs reminded him of the tech stock bubble of the late 1990s, the Oracle of Omaha said, “It is not a bubble … this is not what we were seeing in late 1999 all the way into 2001. We aren’t in any bubble phase of anything.”

    Inmates Dance, Deputy Fired (OBJ)
    Some inmates did the worm, others chose the old school robot. Each dance was performed to the beat of hip-hop artist Usher on command from a now-fired Summit County deputy. The inmate prize: use of a jail microwave. The charges are revealed in an internal affairs report released Wednesday. Deputy Dominic Martucci, 35, was fired for violating the department’s policies, including a mandate that inmates be treated humanely. Martucci is accused of ordering five inmates dance to Usher’s Yeah! song and then inviting other deputies to watch during an early evening shift on April 11. The inmates danced their way to regaining use of a microwave that they had lost earlier that day.

    Fitch CEO: US Downgrade Not Likely Before Election (CNBC)
    “We currently have the U.S. on a negative outlook, which actually suggests we think there is the potential for a downgrade,” Taylor said in an interview. “It’s too early to tell whether that will turn into an actual downgrade or not,” he said. “We think we still need to see what’s going to happen through the elections and what actions are put in place subsequent to the elections. I think it’s very clear that the U.S. does need to do something to deal with the debt problems built up since the financial crisis,” he added.

    New Ripples For Gupta Case (WSJ)
    Mr. Gupta’s criminal trial for securities fraud and conspiracy is scheduled to begin May 21 and expected to last about three weeks. Mr. Gupta has pleaded not guilty. His lawyer, Gary Naftalis, declined to comment for this article but previously has called the accusations “totally baseless.” The Manhattan U.S. attorney’s office also declined to comment. Federal prosecutors in Manhattan have taken note of the spike in trading in Goldman, which began as the firm’s board concluded a special meeting to approve the deal that afternoon, according to people familiar with the matter. Galleon traders also noticed the climbing stock, conversations recorded on government wiretaps show. “Someone had this before us, someone, whatever went on, something happened,” Galleon trader Ian Horowitz told Mr. Rajaratnam in a phone call the next morning, caught on tape by the Federal Bureau of Investigation.

    Goldman Readies Low-Cost Bond PLatform (WSJ)
    Goldman is preparing to roll out a bond-trading platform on which it will charge lower fees than on typical bond trades, according to people familiar with the matter, a move that could help retain customers tempted by rival trading venues being set up by BlackRock Inc. and others.

    AIG Invests $7.4 Billion at 5.3% to Boost Returns, Adds RMBS (Bloomberg)
    “We continue to be opportunistic with our investments in structured securities in order to improve yields, increase net investment income and offset the impact of a lower interest rate environment,” Wintrob said.

    BofA Talks Deal On Ex-Broker Pay (WSJ)
    The former Merrill brokers left the firm after the 2009 takeover by Bank of America and claim they are owed deferred compensation as a result of the deal. They were emboldened last month by an arbitration ruling ordering the Charlotte, N.C., company to pay more than $11 million to two former brokers with related complaints.

    / May 4, 2012 at 9:30 AM
  • News

    Facebook Stock Is Underperforming In Imaginary Markets

    You know who definitely has a computer science degree? Mark Zuckerberg. I’m pretty sure about this.* But probably not accounting? So don’t ask him to explain how Facebook lost 25% of its market cap in the last month: Facebook Inc. set the price range for its initial public offering at $28 to $35 a share, […]

    / May 3, 2012 at 6:13 PM
  • News

    BusinessWeek: Most Companies Have A Pretty Lax Policy Re: Destruction Of Private Property, Actually

    On Monday night, New York Knicks power forward and fashion-world darling Amar’e Stoudemire made a mess of the visiting team’s locker room in Miami. Following the Knicks’ defeat, Stoudemire punched through the glass encasement of a fire extinguisher. His hand suffered lacerations and he left the arena with his arm in a sling. He issued […]

    / May 3, 2012 at 4:38 PM
  • News

    May 3: Soros Wakes Up To Find Horse’s Head In His Bed?

    2005-2010: George Soros has a relationship of debatable seriousness depending on who you ask with a woman named Adriana Ferreyr. (According to Ferreyr, it was a “serious and meaningful relationship,” while according to Soros, things were “on-again, off-again and non-exclusive.”) Ferrreyr is promised her “dream apartment” on East 85th Street.

    Summer 2010: Several days after the contract on the apartment is signed, Soros “heartlessly dumps” Ferreyr, which means no dream apartment for her.

    Approximately a week later: The duo “briefly reconcile for a romantic night together.”

    A few hours later: Soros “whispers in Ferreyr’s ear” that another woman, Tamikoa Bolton, is living in her apartment. Ferreyr expresses strong displeasure at this fact. Soros supposedly slaps Ferreyr across the face and attempts “to strike her with a glass lamp, narrowly missing.”

    August 2011: Ferreyr demands $50 million for broken promises re: dream apartments, makes allegations re: lamps.

    Later in August 2011: Soros strongly denies accusations, refuses to pony up squat.

    February 2012: Ferryr refuses to settle for $250,000, court date is set for early May

    April 30, 2012: OH NO, HE DI’INT:

    Billionaire George Soros made a rare public appearance with his younger girlfriend, Tamiko Bolton, hours before a court date with his ex, Adriana Ferreyr. Soros, 81, and Bolton, 39, were photographed together at a Paley Center screening of “The Intouchables” Monday night, marking the first time they’ve stepped out in public as a couple. Bolton resides in the $1.9 million apartment which Ferreyr says Soros promised her, and which she’s suing over. Soros and Bolton’s sudden public appearance, meantime, seemed like a statement (or a show of unity) the night before a hearing in Manhattan Supreme Court.

    May 1, 2012: [Guessing] Bolton shows up to the courthouse with Soros sipping coffee out of china from the apartment and wiping her hands on the monogrammed towels (“AF & GS”) that mistakenly delivered the week after she moved in.

    May 3, 2012: ???

    Soros And Gal Pal Step Out [NYP]

    / May 3, 2012 at 4:18 PM
  • News

    Evil Incarnate Thinks LightSquared Is Great

    As those of you who keep up with the trials and travails of hedge fund manager Phil Falcone, a wireless start-up called LightSquared is his baby and the thing that stands to make or break him. To that end, Falcone’s invested a significant amount of time, energy, and, most importantly, investor money in seeing his baby succeed. Unfortunately, in the last year or so, LightSquared has been met with some significant setbacks, namely with regard to GPS interference it is said to cause. The yachting community worries that said interference will cause boats to get lost at sea. The National Oceanic and Atmospheric Administration says LightSquared“may degrade precision services that track hurricanes, guide farmers and help build flood defenses.” The FAA put out a study that estimates LS “may cost 794 lives in aviation accidents over 10 years with disruptions to satellite-aided navigation.” To all of that and more, one man asks, “Yeah, AND???”

    More Job Killer Than Creator

    By Karl Rove

    …after nearly a decade of regulatory “green lights,” the Obama administration reversed itself and started proceedings to kill LightSquared’s ambitious plan to upgrade the U.S. cellular infrastructure. Why? Because at the eleventh hour, concerns were raised about potential interference with GPS devices — interference that occurs because these devices are listening into the part of the spectrum licensed to LightSquared….This will have consequences. Consumers will lose the chance to get better, cheaper wireless service. Owners of tablets, smartphones and other new devices won’t get faster downloads and greater bandwidth. The country would miss out on a valuable infrastructure improvement based on cutting-edge technology. Thousands of workers in construction, steel, transportation and other industries won’t get work, along with the good paychecks that a privately funded $14 billion project like this generates.

    Why? Because the Obama administration, which first endorsed and encouraged LightSquared, has now reversed course and gutted it. Given that this is the slowest, most anemic recovery from any recession since World War II, you might expect the administration to be eager to encourage companies to invest in creating jobs, making the economy more productive and increasing economic growth…But based on what it’s done to Keystone XL and now LightSquared, you’d be wrong.

    All because of some eleventh hour concerns about planes crashing.

    More job-killer than job-creator [Politico]

    / May 3, 2012 at 2:40 PM
  • News

    David Einhorn Will Just Put It Out There That A Salad Every Once In A While Won’t Kill You

    Directed at no one in particular but if a certain jelly donut-addicted Fed Chair has found even his extra-forgiving sweatpants getting too snug, he might want to take note.

    / May 3, 2012 at 11:46 AM
  • Opening Bell

    Opening Bell: 05.03.12

    Banks Get Silent Treatment At Fed Meeting (WSJ)
    A meeting Wednesday between a top Federal Reserve official and six bank bosses was notable largely for long silences from the central bank’s side of the table. Fed governor Daniel Tarullo met with the executives to discuss the recent “stress tests” and to hear out the banks’ concerns over proposed new regulations. Mr. Tarullo and the bankers exchanged thoughts about the tests, but the Fed official didn’t respond when the chief executives laid out their new-rule concerns, starting with a Fed proposal to limit the biggest banks’ exposure to other firms and governments, said people familiar with the meeting.

    Carlyle Prices IPO At Lower Range (WSJ)
    The downshift came after some mutual-fund investors pushed for a better deal, said people familiar with the matter. Also, they said, Carlyle hoped a lower price would help ensure good first-day and longer-term performance. People close to Carlyle said the firm could have stuck with a price in the original range, but it wished to attract some larger investors who wanted a lower price.

    Carlyle Founders’ Stakes Valued at $1 Billion Each Post-IPO (Bloomberg)
    “This is their legacy,” Reena Aggarwal, a finance professor at Georgetown University’s McDonough School of Business in Washington, said in a telephone interview. “They started the firm from nothing, so their human capital and their financial wealth are tied up in the company. They need to have this liquidity event.”

    U.S. documents allege HSBC money-laundering lapses (Reuters)
    …documents allege that from 2005, the bank violated the Bank Secrecy Act and other anti-money laundering laws on a massive scale. HSBC did so, they say, by not adequately reviewing hundreds of billions of dollars in transactions for any that might have links to drug trafficking, terrorist financing and other criminal activity. In some of the documents, prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a “systemically flawed sham paper-product designed solely to make it appear that the Bank has complied” with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials.

    Buffett Trails S&P 500 for Third Straight Year (Bloomberg)
    FYI.

    Fancy A Drink With Richard Branson? (Virgin via Daily Intel)
    Richard Branson is now on board all Virgin Atlantic flights ‘in spirit’ – thanks to new Little Richard ice cubes. Virgin Atlantic is giving Upper Class passengers the chance to cool their in-flight drinks with bespoke Richard Branson ice cubes. They will be served on board one of the first flights of the airline’s new Upper Class Cabin this May…
    The ice cubes have been created using the exact measurements of Sir Richard’s head and feature an impressive level of detail. The mould for the ice cubes took a team of four skilled designers a painstaking six weeks to create using detailed photographic techniques and laser scanning technology to create the perfect likeness of Sir Richard.

    Jobless claims tumble, calms job market fears (Reuters)
    The number of Americans filing new claims for jobless aid fell more than expected last week, easing fears the labor market recovery was stalling. Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 365,000, the Labor Department said on Thursday. The biggest weekly drop in claims since early May last year helped to lift some of the dark cloud cast over the labor market by a report on Wednesday from payrolls processor ADP showing private employers in April created the fewest jobs in seven months.

    John Arnold Retiring At 38 (NYP)
    Arnold, who has an estimated net worth of $3.5 billion, said in a letter to investors that he was closing the Centaurus Energy Master Fund in order to “pursue other interests.” In the letter, he said the fund had performed “better than I could have hoped for or imagined” with returns on investments consistently high, “often in triple digits.” Arnold was a major force behind the rapid rise of energy trader Enron in the 1990s.

    SocGen Profit Hit by Restructuring Plan (WSJ)
    Société Générale said Thursday that first-quarter earnings at its investment bank rebounded from the tough previous quarter but fell from the year-earlier period, pressured by a restructuring plan aimed at sheltering the French bank from Europe’s still-smouldering debt crisis. Société Générale, France’s second-largest lender by market value and the first to report quarterly earnings, said net profit dropped 20% to €732 million ($963.2 million) from €916 million a year earlier, hit mainly by losses on loan portfolios it sold.

    Independent Counsel For MF Global Is Sought (WSJ)
    Criminal and civil investigators have been looking into the case, but so far have said little about the progress of their investigation. That has led some Republicans and customers of MF Global to question whether the investigation is being slowed by a desire to show deference to the firm’s former chief executive, Jon Corzine. Mr. Corzine, a former U.S. senator and governor of New Jersey, has been a prominent Democratic fund raiser and supporter of the Obama administration. The letter circulated by Rep. Grimm’s office acknowledges that while “we have no direct evidence” that the Department of Justice “is providing special treatment…perception matters a great deal.” Still, the letter concludes that “an independent investigation is urgently needed.”

    Kona teen nears perfect school attendance record for 13 years (WHT)
    Cetraro thinks improving and encouraging attendance requires a more comprehensive approach, one that goes beyond sanctions. When Cetraro was in elementary school, she appreciated privileges like running in the sprinklers, being first in line for lunch or dismissal, having the chance to act as the teacher’s assistant and getting shave ice. She said these incentives served as powerful motivators.

    / May 3, 2012 at 9:30 AM
  • News, Write-Offs

    Write-Offs: 05.02.12

    $$$ Dimon Cites ‘Give and Take’ After Bank Chiefs Meet at Fed [Bloomberg] $$$ Carlyle Prices IPO at Lower Range $$$ Legendary Energy Trader John Arnold to Retire [CNBC] $$$ Why Alexis Goldstein left Wall Street for Occupy Wall Street [n+1] $$$ “This lower probability of missile strike means it’s a good time to go […]

    / May 2, 2012 at 6:31 PM
  • News

    Aubrey! Come On!

    Reuters had ANOTHER* story today about bad shit that Aubrey McClendon is up to. Here’s what’s going to happen. I will be all “meh, that is a whole lot of people saying a whole lot of maybes,” and will sort-of defend Aubrey, and then tomorrow Reuters will have a “Special Report: Aubrey McClendon Killed Babies […]

    / May 2, 2012 at 6:21 PM

Our Sites

  • Above the Law
  • How Appealing
  • ATL Redline
  • Breaking Defense
  • Breaking Energy
  • Breaking Gov
  • Dealbreaker
  • Fashonista
  •