Some people are keeping their London-based gigs (for now) and some people are not. Read more »
Archive for May 2012
It’s sort of easy these days to worry about banks. Banks do worrying things, etc. Bankers are only human and sometimes they get things wrong. Arguably those errors are systematically biased in favor of risk, what with the bankers being incentivized by asymmetric incentives and so forth.
One thing that could help you sleep at night is that other people are keeping a close eye on banks. Other people like their regulators. And like Moody’s and S&P and Fitch. Also other people like, I don’t know, David Tepper or something, but a thing to like about regulators and rating agencies specifically is that they have inside information. If you believe, as many do, that big banks are far too opaque for you to have any hope of evaluating them based on public disclosures, then the confidence of other public-market debt and equity investors – however smart and motivated by, y’know, the prospect of making money they might be – should only give you so much comfort: they’re relying on the same opaque financials as you are. Regulators, on the other hand, can see literally whatever they want about a bank’s book, and rating agencies can and do (sometimes) get lots of nonpublic information from the banks in formulating their ratings judgments. If the Fed and the OCC think a bank is sound, and Moody’s and S&P think it is investment grade, who are you to worry about its creditworthiness? Don’t answer that.
Anyway this is weird: Read more »
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Ira Sohn
David Einhorn Puts Martin Marietta Materials On Notice, Gives GJF.NO His Blessing
By Bess Levin
Einhorn says he has a lot of stocks to talk about, starts with Martin Marietta Materials, which he says has “lots of problems.” Einhorn calls MLM CEO a “degree in megalomania”…Einhorn just pulled out a magic wand and I’m pretty sure made a Harry Potter reference. And he’s onto talking global economies. He’s talking up a stock in Norway known as GJF. [Deal Journal]
[via NJD]
This is sort of a strange footnote to the London Whale: one of the hedge funds that made money feasting off his carcass was run by JPMorgan*:
Even as a trader for JPMorgan in London was selling piles of insurance on corporate debt, figuring that the economy was on the upswing, a mutual fund elsewhere at the bank was taking the other side of the bet. …
But perhaps one of the most surprising takers of the JPMorgan trade was a mutual fund run out of a completely different part of the bank. The bank’s Strategic Income Opportunities Fund, which holds about $13 billion in client money, owns about $380 million worth of insurance identical to the kind the “London whale” was selling, according to regulatory filings and people with knowledge of the trade. It is unclear how much the fund made.
This is … not surprising. Some people want to sell CDS, some people want to buy it. That’s how there’s a market. And when you’re as big and interconnected as JPMorgan, it’s not surprising that the market often crosses between bits of yourself. That is, it’s sort of silly to think of JPMorgan as a market participant; it is rather a nexus of many many market participants. Some of those participants are “JPMorgan,” in that they’re interested in the performance of JPMorgan as an entity; others of them are “clients” in the sense that they are buying securities from JPMorgan or having their assets managed by JPMorgan in some separate or mutual-fundy way; but to think of them all as JPMorgan is silly.
But the conclusions from this unremarkable fact are sort of interesting: Read more »
If it feels like it’s been forever since we last heard from Eliot Spitzer’s former gal-pal Ashley Dupré it’s because it has. What’s she been up to since July 2010, when she told reporters she was focusing on getting her real estate license and writing a dating column which sadly did not continue past its debut? Becoming a small business owner and shedding her old skin, which she’d appreciate if you didn’t bring up in conversation. That (hooking for $2,000/hr) was then, this (being a New Jersey-based entrepreneur) is now. And while the new venture “represents a continuation of her evolution,” rest assured “special underthings” and swimsuits will always have a place in her life. Read more »
Greece Teeters As Talks Fail (WSJ)
In a potent sign of Greeks’ rising anxiety, depositors withdrew €700 million ($898 million) from local banks on Monday alone, according to the country’s national bank—a significant escalation in capital flight from the country. Greek President Karolos Papoulias told party leaders that the situation facing Greece’s lenders was very difficult and that “the strength of banks is very weak right now,” according to a transcript released Tuesday.
Merkel: I Want Greece To Stay In The Euro (CNBC)
In an interview with CNBC’s “Worldwide Exchange,” Merkel said: “I want, just like Jean-Claude Juncker, that Greece stays in the euro. I think that would be good for Greece and for all of us. If Greece believes that we can find more stimulus in Europe in addition to the Memorandum (the deal stuck with the Troika), then we have to talk about that,” she said, but she underlined that Greece and its euro zone partners had to be able to trust each other.
What Happens When Greece’s Money Runs Out (Reuters)
“I’m really not sure Greece could survive for very long if external money was cut off,” said Darren Williams, economist at fund manager AllianceBernstein. “But what an experience of IOUs may do rather quickly is bring home to the average Greek citizen just how much more difficult a place it is outside the bailout program and outside the euro.”
Moore Leads Hedge Funds Betting on JPMorgan Before Losses (Bloomberg)
Hedge funds Moore Capital Management LLC and Blue Ridge Capital LLC boosted their stakes in JPMorgan Chase, while Kingdon Capital Management LLC divested, before the shares plunged because of a $2 billion trading loss. Moore, the $15 billion New York-based firm run by Louis Moore Bacon, bought 6 million shares of JPMorgan and its $297.3 million stake was its largest U.S. stock holding as of March 31, according to a filing yesterday with the Securities and Exchange Commission. John Griffin’s New York-based Blue Ridge purchased 1.85 million shares, raising its stake in the bank to 6.14 million. Read more »
$$$ Greece fails to form unity government [FT]
$$$ Greek Depositors Withdrew $898 Million From Banks Monday [WSJ]
$$$ “The plane carrying newly sworn-in French President François Hollande was hit by lightning Tuesday afternoon, forcing him to delay a trip to Berlin, where he is due to meet German Chancellor Angela Merkel.” [WSJ]
$$$ Happy 13F day, Warren Buffett, Phil Falcone, Whitney Tilson [WSJ, WSJ, ZH]
$$$ Bank boards should focus on businesses that are doing suspiciously well [HBR / Sallie Krawcheck]
$$$ Mario Batali is living on food stamps for a week [AP]
$$$ A Bronx principal who fantasized to female subordinates about getting intimate with office furniture is being demoted to assistant principal amid new allegations, The Post has learned. The Department of Education is investigating claims by a 15-year-old girl at Bronxdale HS that first-year principal John Chase Jr. made comments that made her uncomfortable, according to a source. Staffers at the brand new school have been calling for Chase’s ouster since a DOE probe confirmed in December that he had made at least three remarks about oral sex to female staffers – including that a new copy machine was so fancy it could give “b–w j–s.” [NYP]
Read more »
The Swiss bank is not done with its firings. Read more »
A wonderful thing about the Facebook IPO is that there is a proliferation of imaginary markets in which to … well, not trade it exactly, but say what you would be doing if you could trade it, which is almost as good. Here is the Wall Street Journal’s imaginary market, with a “Current Price Prediction” of $52.43, off a touch from the $150.13 as of … yesterday. Admire their specificity! Elsewhere you get only binaries, or I guess ternaries, like CNBC’s “Do You Think Buying Facebook Shares Would Be a Good Investment?” [yes / no / don't know], or Felix Salmon’s “Are you seriously thinking of buying Facebook shares?” [yes / no / umm, I'm buying them for a friend].
In the imaginary market that counts (I guess?), Facebook is up “an average of 14 percent” (!) as the underwriters raised the IPO range from $28-$35 to $34-$38 in a refiled S-1 this morning. This is good news if you bought in the imaginary market at $28-$35, as I suppose the underwriters imaginarily did, and also good news if you avoided the real market when it last cleared north of $44, as this guy who’s pissing away his child’s college money on Facebook did. If you like numbers, you could look at these numbers*: Read more »
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NH BLG_DEALBREAKER <GO>
to access Dealbreaker
