June 2012

  • News

    Mike Bloomberg’s Given Some Thought To How He’d Dress If He Were A Young Woman

    He’d keep it conservative at the office but come ladies’ night you’d better believe he’d be working what his momma gave him.

    / Jun 15, 2012 at 4:59 PM
  • News

    Rajat Gupta Wishes His “Friend” Raj Had Been A Little Less Profitable

    Well that was fast – and a bit strange. What do you make of the counts on which Gupta was and wasn’t convicted? He was found not guilty on counts 2 and 6 of the indictment: So he’s off the hook for his work at P&G, with the lesson perhaps being that people will believe […]

    / Jun 15, 2012 at 2:19 PM
  • News

    Caption Contest Friday: John Thain, Excited On The Inside, Accepts Father Of The Year Award

    [Mark_Shriver via BI] Earlier: John Thain Awarded The One Bonus That Can *Never* Be Clawed Back

    / Jun 15, 2012 at 2:11 PM
  • News

    Dartmouth Grads Still Into Wall Street, Despite One Man’s Campaign Against “A Field That Sanitizes The Intellect And Offers Almost Nothing To Human Society”

    Back in August, a Dartmouth student named Andrew Lohse made a simple request of his peers: to stop being whores for Wall Street. “Should landing jobs prestigious 16-hour-a-day jobs at some faceless hedge fund, where they’ll learn about manipulating capital instead of imagining a freer and more just world be the goal of the valedictorians of Ivy League institutions,” Lohse asked and then answered, “No matter how hard I try, I cannot think of more pathetic ambitions.” Lohse charged the undergraduates to “do better” and by better he meant  resist being “pulled into what is essentially a vulgar and extortionate system of lending and predatory capitalism which is increasingly underwritten by what remains of the public’s coffers.” Was Lohse’s argument a persuasive one? Did the image of him “vomiting in my mouth” at the idea of his peers becoming financial services employees cause anyone to reconsider?

    Apparently, not so much.

    Wall Street’s allure may have dimmed for some of America’s sharpest young minds in recent years, but a quick look at the top of Dartmouth College’s class of 2012 shows that the appeal seems to remain strong. At its commencement on Sunday, Dartmouth recognized four valedictorians who graduated with perfect 4.0 grade-point averages. Three are headed to work on Wall Street at major investment banks, and one will go to the giant business consulting firm that advises them. “Certain people have the view where finance is perceived in a more negative light,” said David Rogg, one of the valedictorians, noting that there was an active chapter of the Occupy movement on Dartmouth’s campus. “But a lot of people still find it to be a very positive industry.”

    He has a job lined up at Goldman Sachs, as does another of the valedictorians, Jie Zhong; a third, Wills Begor, will go to Morgan Stanley. The other valedictorian, Glynnis Kearney, will work at McKinsey & Company. Mr. Begor said some of his peers’ interest in Wall Street had diminished, “but for me, it’s an extension of the academic challenges at Dartmouth, to learn about finance, which is something we don’t get exposed to at a liberal arts college.”

    Begor did add that his gig is “just for two years” and “has been accepted to Harvard Business School, starting in 2014,” so perhaps Andy got under his skin a little.

    Finance Jobs Still Appeal To Graduates At Darmouth [NYT]
    Related: Bridgewater Accuser/Dartmouth Fraternity Brother-Cum-Reformer Surprised Find Himself Not Covered By Whistleblowing Protection Laws

    / Jun 15, 2012 at 1:42 PM
  • News

    The Universe Has Good News And Less Good News For Rajat Gupta

    The less good news is that a jury found the former McKinsey executive guilty on three counts of securities fraud and one count of conspiracy for passing material non-public information to his friend*, convicted insider trader Raj Rajaratnam. The good news:

    1. Rajat could go to jail for twenty years but probably won’t (“Gupta faces up to 20 years in prison on each of the fraud charges and up to five years for the conspiracy charge. But his sentence is likely to be significantly lower under federal guidelines.”)
    2. Sentencing is scheduled for October 18 so he’s got the whole summer and then some into a Zen place about going to prison. Also! Plenty of time to do all those things he was too busy for when he was working. This is gonna be his time. Time to taste the fruits and let the juices drip down his chin. The summer of Rajat!

    Gupta Found Guilty Of Insider Trading [WSJ]

    *Friend Rajat’s ass.

    / Jun 15, 2012 at 12:22 PM
  • News

    Analyst: If Greece Beats Russia On Saturday, It Will Mean…Something In The Context Of Sticking With The Euro Or Not

    An unusually large numbers of voters are still wavering, pollsters say. With the traditional Greek left-right political divide sidelined by the debt crisis, other factors could sway voters. “Nothing is certain, many voters are still undecided and factors such as the soccer match may be a major factor,” said a candidate for New Democracy. Greece […]

    / Jun 15, 2012 at 11:53 AM
  • Opening Bell

    Opening Bell: 06.15.12

    Forthcoming Facebook Motion Said to Discuss Nasdaq’s Role in I.P.O. (NYT)
    Facebook is preparing for battle. One month after its botched initial public offering, the social network is set to file a motion to consolidate all the shareholder lawsuits against the company, according to a person with knowledge of the matter. The lead underwriters, Morgan Stanley, Goldman Sachs, and JPMorgan Chase, are expected to join the motion, which could be filed in the Federal District Court for the Southern District of New York as early as Friday. The motion will represent the first time Facebook has publicly addressed the lawsuits and the performance of its highly anticipated, but ultimately lackluster, IPO on May 18.

    Facebook Is Not The Worst IPO (Deal Journal)
    Thursday marked the 4-week anniversary of the pricing of the IPO at $38 and today marks the anniversary of the innocuous opening and subsequent turmoil. Through Thursday’s close the stock was down about 26%, losing some $27 billion in market capitalization. That is ugly, but not as bad as the Halloween 2007 debut of Giant Interactive Group. The Chinese online-gaming company raised just over $1 billion in an IPO that started out well, rising about 18% on day one, but then promptly tumbled 30% through its first month, according to Dealogic.

    Draghi Hints ECB Is Ready To Act (WSJ)
    Providing liquidity “is what we have done throughout the crisis, faithful to our mandate of maintaining price stability over the medium term, and this is what we will continue to do,” Mr. Draghi said. The Eurosystem, the ECB and the 17 national central banks that use the single currency “will continue to supply liquidity to solvent banks where needed,” he added.

    Greeks Return To Ballot Box As Crisis Nears Decisive Moment (Bloomberg)
    The June 17 vote will turn on whether Greeks, in a fifth year of recession, accept open-ended austerity to stay in the euro or reject the conditions of a bailout and risk the turmoil of becoming the first to exit the 17-member currency. World leaders have said they’d prefer a pro-euro result, underscoring concern over global repercussions.

    Moody’s Downgrades Dutch Banks (WSJ)
    In a statement, Moody’s said it had cut the ratings by two notches each of ABN Amro Bank NV and ING Bank NV to A2, LeasePlan Corp. NV to Baa2 and Rabobank Nederland to Aa2. It also cut the rating of SNS Bank NV by one notch to Baa2.

    Giselle Is World’s Highest Paid Model (Forbes)
    Just like last year, the Brazilian bombshell Bündchen leads the pack with a stunning $45 million in earnings (all estimates from May 1st, 2011 to May 1st, 2012). Even in her early thirties, Bündchen remains an unparalleled force within the fashion world. As the world’s most powerful supermodel, she racks up modeling gigs, spokesperson deals, and independent licensing ventures at every turn…Bündchen’s success combining business with modeling is influencing young, ascendant models. “The ones that are coming up, their model for excellence is Gisele. They’re looking at her and saying ‘that’s what I want to shoot for,’” Razek said.

    Fed Loans Backing AIG, Bear Repaid (WSJ)
    On Thursday, the regional Federal Reserve bank said it has been repaid, with interest, on $53.1 billion in loans it made to two crisis-era vehicles that held complex subprime mortgage bonds, home loans, commercial-property loans and other unwanted assets from Bear and AIG. The New York Fed earlier recouped a separate $19.5 billion loan that financed the purchase of mortgage-backed securities from AIG.

    Warren Buffett fired Benjamin Moore CEO after Bermuda cruise (NYP)
    “[Abrams] kept asking what he’d done wrong,” according to an insider briefed on the ouster. “[Berkshire officials] told him to clear his stuff out while they stood and watched every move he made.”

    Gupta Hopes Family Guy Image Will Help (NYP)
    The 63-year-old former Goldman Sachs director — facing 25 years in prison on charges of leaking inside information to his hedge fund pal Raj Rajaratnam — has surrounded himself with family and friends throughout the four-week trial. Gupta’s four Ivy League-educated daughters, his wife, Anita, and sister, Kumkum, in-laws and colleagues — roughly a dozen daily attendees — were in the courtroom each day, taking up the first two rows of the gallery. As the jury today starts its second day of deliberations, the fallen Wall Street star hopes the family vibe helps push the panel toward an acquittal.

    In the Facebook Era, Reminders of Loss if Families Fracture (NYT)
    The Times just found out that one of the weird things about Facebook is that you can find out things about people you haven’t spoken to in years: Not long ago, estrangements between family members, for all the anguish they can cause, could mean a fairly clean break. People would cut off contact, never to be heard from again unless they reconciled. But in a social network world, estrangement is being redefined, with new complications. Relatives can get vivid glimpses of one another’s lives through Facebook updates, Twitter feeds and Instagram pictures of a grandchild or a wedding rehearsal dinner. And those glimpses are often painful reminders of what they have lost.

    / Jun 15, 2012 at 9:30 AM
  • Write-Offs

    Write-Offs: 06.14.12

    $$$ Central banks ready to combat Greek market storm [Reuters]

    $$$ Things to know about the London Whale and capital models [DEM]

    $$$ Things to know about TARGET2 balances [Felix Salmon]

    $$$ Things to know about EFSF and ESM leverage and guarantees [TF]

    $$$ Here is a behavioral economics paper with the keywords “anti-social behaviour, nastiness, money-burning” [Universitat Jaume via Robin Hanson]

    $$$ “I have been a judge in the Miss Universe pageant three times, and I assure you it is not fixed. Even though Donald Trump made it very clear to us whom he would vote for, I always voted my conscience. … I voted for the contestant I thought was the most beautiful.” [The Daily]

    $$$ You should really think about becoming a credit analyst for BNP Paribas in New York [DBCC]

    $$$ Quest Software Brings in Competing Bid Using Clever Corporate Engineering [Dealpolitik]

    $$$ Maiden Lane Loans Repaid, but Assets Still Need to Be Sold [DealBook]

    $$$ Ray Dalio Is Building a Baseball Card Collection [NYM]

    $$$ The Nobel Foundation lost some money in the stock market [Fortune]

    $$$ Man Who Saved Mouse from Being Eaten By Cat Catches Black Plague [Gawker]

    / Jun 14, 2012 at 7:32 PM
  • curtains made out of...burlap?

    Sublet Bret Easton Ellis’s No-Bedroom Studio For $5,000 / Month Or He’ll Kill You

    In fairness, we don’t know that the American Psycho writer actually has plans to murder anyone for not renting out the place, but it seems logical he might, given that pictured above is the living room/kitchen/bedroom and interested parties may be tough to come by. [Curbed]

    / Jun 14, 2012 at 7:26 PM
  • News

    Jack Welch’s Advice For Summer Interns: Show Human Emotion

    “Be likable. Just that. Fun, upbeat, friendly, authentic, filled with positive energy, happy, agreeable, chit-chatty about sports and the weather and The Avengers, or frankly, whatever everyone at your company likes to be chit-chatty about. Get in the game and play, even literally, if there’s a softball game to be had. Let people know you. […]

    / Jun 14, 2012 at 6:25 PM
  • News

    Swiss National Bank Is On To This “Swiss Banks Are So Great” Scam

    The Swiss National Bank is not particularly thrilled with the state of the Swiss Not-Quite-National Banks and wants them to do something about it: The SNB is therefore of the view that both big banks should further expand their loss-absorbing capital. For UBS, this implies a continuation of its capital strengthening process; and for Credit […]

    / Jun 14, 2012 at 6:01 PM
  • News

    Nasdaq Officials Would Just Like To Point Out That Anyone Who Lost Money As A Result Of The Exchange’s Incompetence Have Little To No Legal Recourse

    Oh you can try a lawsuit but, historically speaking, it won’t do shit.

    Nasdaq is sending a message to firms weighing lawsuits related to trading losses in Facebook’s initial public offering: winning won’t be easy. The exchange operator believes it is protected by its contracts with members and by its unusual legal status, which is rooted in its dual role as a regulatory body as well as a business that makes money running markets. Exchange officials in recent weeks have pointed out to analysts that Nasdaq has never been successfully sued over a trading error. “When you look at member agreements that people sign, it’s quite explicit that they’re bound by that accommodation policy,” Robert Greifeld, Nasdaq’s chief executive, said last week at a Sandler O’Neill + Partners conference, referring to legal agreements capping the exchange’s payouts linked to system problems…Banks and brokers have estimated they lost hundreds of millions of dollars due to technical problems during Facebook’s May 18 debut.

    The glitches forced Nasdaq to delay Facebook’s opening, and left trades involving millions of shares unconfirmed for hours. Amid the chaos, traders were forced to guess their positions and place additional orders based on those estimates. When Nasdaq delivered the results of the trading Friday afternoon, many firms were caught off guard and scrambled to reposition.

    According to Greifeld, the last guy who tried to get his money back “trades on the pink sheets now” but take your best shot.

    Nasdaq Claims Strong Defense [WSJ]
    Related: UBS Not Sweating The Small Stuff

    / Jun 14, 2012 at 4:03 PM
  • agree to disagree

    Allen Stanford Has No Idea What You’re Talking About

    “I didn’t run a Ponzi scheme, I didn’t defraud anybody, and there was never any intent to defraud anybody,” Mr. Stanford, wearing a green prison jumpsuit, told U.S. District Court Judge David Hittner before he was sentenced [to 110 years in prison]. [WSJ]

    / Jun 14, 2012 at 2:46 PM
  • News

    Bernie Madoff Is Still The King

    Though it looked like Sir Allen Stanford might dethrone him with a recommended sentence of 230 years…

    / Jun 14, 2012 at 1:28 PM
  • News

    If a Whale Flaps His Flippers in London, It Causes a Tiny Increase in McDonald’s CDS Spreads

    Reuters had a neat article today about how JPMorgan’s CIO embarrassment increased credit spreads for a bunch of investment grade companies. The 121 companies included in the CDX.IG.NA.9 index, in which JPMorgan apparently had a $100bn long position, saw their CDS spreads spike in the days after JPMorgan revealed its losses – and its intent […]

    / Jun 14, 2012 at 1:20 PM
  • How do you like us now?

    Getting Into Bed With One Spanish Bank Now A Risk-Free Proposition

    Spain, as you may have heard, does not have a lot going for it at the moment. Its bond yields have crossed 7 percent, unemployment is at something like 70 percent, and on Monday, it announced a rather poorly received bailout of the country’s banks. Investors don’t want to touch their financial institutions with a 100 foot pole. One bank that knew this rejection all too well? Banco Santander, probably on account of the open sores. Today, though, that’s all about to change.

    / Jun 14, 2012 at 12:17 PM
  • Opening Bell

    Opening Bell: 06.14.12

    Geithner Seeks More Euro-Zone Measures (WSJ)
    Treasury Secretary Timothy Geithner called the bailout of Spain’s banking system “a good, concrete signal” of the euro-zone commitment to financial integration, but said the currency union must act quickly with more measures to quell its crisis. “This is a very challenging crisis for them still,” he said Wednesday in a discussion at the Council on Foreign Relations. “They recognize they’re going to have to do a bunch more to…restore a bit of calm and to convince people they’re going to do what’s necessary to make this work.”

    Spanish Crisis Deepens (WSJ)
    The financial crisis threatening the Spanish government deepened Thursday as Spain’s borrowing costs surpassed their euro-zone record, touching levels that previously forced other euro-zone countries to seek sovereign debt bailouts. The move followed yet another sovereign credit downgrade and coincided with fresh evidence Thursday of economic and financial stress as the decline of Spanish housing prices accelerated to a 12.6% annual rate in the first quarter and Spanish banks increased their reliance on European Central Bank funding.

    Spain Credit Rating Slashed by Moody’s, Egan-Jones (Reuters)
    Moody’s Investors Service cut its rating on Spanish government debt by three notches on Wednesday From A-3 to to Baa-3, saying the newly approved euro zone plan to help the country’s banks will increase the country’s debt burden. Moody’s, which said it could lower Spain’s rating further, also cited the Spanish government’s “very limited” access to international debt markets and the weakness of the country’s economy.

    Greek Banks Under Pressure (WSJ)
    In a sign of heightened nervousness within the country, depositors have been steadily increasing their withdrawals from Greek banks. The withdrawals, according to senior bankers in Athens, approach the level of deposit flight seen when government coalition talks collapsed after inconclusive elections on May 6, forcing the new vote.

    “Why I’m Betting Big On Europe” (Fortune)
    David Herro seems awfully relaxed for a man who has more than $1 billion invested in European banks. It’s a sunny morning in late May, and I’m sitting across from the boyish 51-year-old fund manager in his downtown Chicago office. He’s giving me his full attention, but I can’t stop glancing at the headlines blinking on the Bloomberg terminal behind him. The euro is about to hit a two-year low. Greece is on the brink of disaster. Spain’s real estate market is in shambles, and Italian sovereign debt is as fragile as stained glass. The global economy is roiling, and Herro is positively beatific. “Eventually they’re going to get these problems solved,” he says. “If you look at the economic history of the world, problems come and problems go. There are problems, and they do have to be dealt with. And our view is that all these problems are manageable.”

    Large Institutions Discuss New Marketplace for Bonds (WSJ)
    In recent weeks, senior traders at investment managers and big Wall Street banks have been discussing how the financial industry can set up a centralized electronic market that would let all participants trade bonds freely with one another, according to people involved in the talks.

    BofA Beating JPMorgan As BNP Leads French Lenders Retreat (Bloomberg)
    Bank of America overtook JPMorgan Chase as the biggest lender to the commodities industry in the first five months as French lenders led by BNP Paribas retreated amid the debt crisis. Commodity loans arranged by Charlotte, North Carolina-based Bank of America totaled $14.71 billion, and New York-based JPMorgan’s $14.41 billion ranked it second, according to syndicated-loan data compiled by Bloomberg. Citigroup was the third biggest with $13.68 billion of financing, rising from fourth last year. BNP Paribas slipped to 17th from second.

    Lazard elects former Citigroup chairman Richard Parsons to board (NYP)
    Financial advisory and asset management firm Lazard Ltd. said Wednesday that it elected former Citigroup chairman Richard Parsons to its board, effective immediately. Parsons served as chairman of Citigroup Inc. from February 2009 until his retirement in April 2012. He had served as a director on its board since 1996. Before that, he was chairman and chief executive of the media and entertainment company Time Warner Inc.

    Montreal teacher suspended with pay for showing students ‘Canadian Cannibal’ Luke Magnotta murder video (NYDN)
    A Canadian teacher was fighting for his job after he was suspended for showing students a gory video allegedly showing Maple Leaf man-eater Luke Magnotta killing his Chinese lover. The Cavelier-De LaSalle High School 10th grade teacher appeared before a labor board on Wednesday to explain himself, and Montreal police were mulling whether to slap him with criminal charges, The Canadian Press reported. School officials said the teacher, who is in his 20s, polled students about whether they wanted to watch the grisly snuff video during class on June 4. The yays outweighed the nays, according to the Press. In the 11-minute video, Magnotta, a porn actor and sometime escort, allegedly tortured Jun Lin, 33 — beheading and dismembering his body, eating his flesh with a knife and fork and performing sex acts on the corpse.

    / Jun 14, 2012 at 9:30 AM

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