August 2012

  • Write-Offs

    Write-Offs: 08.31.12

    $$$ “Bernanke Signals Readiness to Do More” [WSJ]

    $$$ “Judgment Days Arrive for Euro Crisis” [WSJ]

    $$$ Spain To Recapitalize Bankia After 4.45 Billion-Euro Loss [Bloomberg]

    $$$ Nomura’s Failed Global Ambitions [DealBook]

    $$$ Quebec Whodunit: 1/4 of Province’s Syrup Reserves Go Missing [WSJ]

    $$$ That’s it for us today. We’re off Monday for the holiday, enjoy the long weekend and see you on Tuesday!

    $$$ A global investment bank is looking for an experienced metals options trader in New York [DBCC]

    $$$ Facebook hits new low after price target cuts [Reuters]

    $$$ Here is some hedge fund Weltschmerz [FT]

    $$$ Here is a really depressing story about student loans [NYT]

    $$$ Some people still don’t like PowerPoint [BBW]

    $$$ “In general, rabbits preferred the higher resolution of the MacBook, whereas squirrels favored the larger screen of the Toshiba. Chipmunks were too hyperactive to linger around either device, even though I sprinkled the keyboards liberally with birdseed, which chipmunks seem to enjoy far more than birds do. I do not recommend this practice …” [NYT]

    / Aug 31, 2012 at 3:40 PM
  • News

    Morgan Stanley ‘Rainmakers’ Might Quit Because Their Computers Don’t Work

    They’re not there yet, however; first, they’re going to send James Gorman a strongly worded letter and make a decision based on his response. They do sound pretty miffed though, so God help the guy if his answer is anything but “I’ve got my tool kit and I’m on the way over.”

    Several dozen Morgan Stanley Smith Barney advisers who manage tens of billions of dollars of client money are considering leaving the firm, saying that widespread technology problems have made it very difficult for them to do their jobs, according to people familiar with the matter. The group has hired a lawyer to argue that they should be able to keep lucrative retention payments even if they quit, and they have also drafted a letter to Morgan Stanley CEO James Gorman outlining their concerns, though the letter has not yet been sent, the sources said.

    Rebecca Rothstein, one of the firm’s top advisers based in Beverly Hills, spoke to him on the group’s behalf, two sources familiar with the conversation said. Rothstein, who is close to Gorman and not part of the group, told him about the difficulties advisers and their clients are having – from trading delays and problems with foreign currency transactions to inaccurate account statements and bounced checks – and warned the group was planning to quit, one of the sources said…Morgan Stanley spokesman James Wiggins said the firm was aware that brokers have been voicing complaints about the new technology, but did not know anything about this specific group of advisers. “No such letter has been sent to management and no mass exodus has been threatened,” he said. “Management’s door is always open to discuss with any concerns they may have.”

    Morgan Stanley Smith Barney Rainmakers Consider Exit [Reuters]

    / Aug 31, 2012 at 3:33 PM
  • News

    Hire This Guy’s Wife And/Or Steal The Idea For Your Own Job Search

    As the results of a recent survey given to Harvard Business School’s Class of 1986 show, holding an MBA does not ensure one a job for life, particularly in these tough economic times (nearly half of all of respondents said they had been laid off or fired at least once). This summer has not been […]

    / Aug 31, 2012 at 3:11 PM
  • The color use is not especially aesthetically pleasing but it *works*, no? Red is bad, easy.

    News

    Ben Bernanke Got To Hear About Adorable, Though Hypothetical, Dogs At Jackson Hole

    Ben Bernanke gave another Augustinian give-us-QEn-but-not-yet* speech at Jackson Hole today and you could go read it but honestly why would you, you know what it says, which is “everything is bad, but not as bad as it could be, and we want to make it a bit better, but only once it’s gotten a […]

    / Aug 31, 2012 at 1:48 PM
  • News

    Dominique Strauss-Kahn Is Single And Ready To Mingle

    Not that the bonds of matrimony ever stopped him before but now that he and his wife, Anne Sinclair, have officially separated, the randiest former IMF chief since Johannes Witteveen is really ready to party. Bellhops, concierges, towel boys, people who hand out AM New York by the subway, ladies who lunch, perfume spritzers at […]

    / Aug 31, 2012 at 12:17 PM
  • Opening Bell

    Opening Bell: 08.31.12

    JPMorgan Rankled By Risk (WSJ)
    JPMorgan is seeking to reduce its risks in a business that provides crucial plumbing for Wall Street’s money flows. The nation’s largest bank by assets, a major player in providing clearing and settlement services to other financial firms, is reviewing its dealings with dozens of brokerages that use the bank to settle trades, according to people familiar with the bank. Clearing and settlement involves standing between buyers and sellers of securities to help manage financial commitments backing hundreds of billions of dollars in transactions daily. J.P. Morgan’s review, which started more than six months ago amid increased regulations, effectively seeks to assess the profits clients generate for the bank versus risks they pose, the people say.

    Spain Unveils Financial Reforms (WSJ)
    This reform fulfills the commitments made by Spain as part of a €100 billion European Union bailout for Spanish banks agreed in July. As anticipated in the bailout deal, Spain is creating an asset management company, or “bad bank,” that will buy property assets from banks starting later this year at prices below book value.

    Euro Faces Judgment Days (WSJ)
    The euro zone has seen many pivotal moments since its debt crisis emerged in Greece in early 2010. But there are reasons to think this fall’s events are especially vital. With Spain and Greece on the ropes, European officials face stark choices.

    Nomura Plans $1 Billion In Cost Cuts (WSJ)
    The cost cuts were unveiled Friday by Nomura’s new chief executive, Koji Nagai, when he presented the blueprint for a revamped business strategy at a meeting of 450 senior branch managers, according to Nomura executives who briefed reporters on what was said. They follow another $1 billion in wholesale cost reductions the broker just finished implementing earlier this year.

    Shia LaBeouf ‘Sent Director Sex Tapes To Get New Film Role’ (Entertainment)
    When Shia LaBeouf took a role in Lars von Trier’s latest movie ‘Nymphomaniac’ eyebrows were raised due to the director’s previous experimentation with putting real sex on film. Until now it seemed that LaBeouf took an occupational risk in joining the movie, but if the actor’s to be believed then he actively looked out for a sexed up role, and involved girlfriend Karolyn Pho…The ‘Lawless’ actor told Handler: “I sent him [von Trier] videotapes of me and my girlfriend having sex and that’s how I got the job.”

    French Minister: No Contradiction in 75% Tax Rate and Attracting Business (CNBC)
    Responding to claims that the introduction of higher tax rate could be an obstacle to business and investment in France, Moscovici echoed the French President and Prime Minister who have said that the tax was part of a “shared effort” to lead France back to positive growth.

    ECB Said To Use Greek Myth For Security On New Euro Banknotes (Bloomberg)
    The European Central Bank is using an image from Greek mythology to improve security on new euro banknotes, four people familiar with the design said, even as Greece’s near bankruptcy fuels a debt crisis that’s threatening the future of the common currency. Europa, the Phoenician princess abducted by Zeus who gave the continent its name, will replace architectural images as the watermark on the new notes, which the ECB wants to start rolling out next year, said the people, who spoke on condition of anonymity because the plans aren’t public yet.

    Barclays Marathon Man CEO Everything Bob Diamond Was Not (Bloomberg)
    “In Jenkins you’ve got the archetypal English CEO who is seen as rather safe, compared with the typically aggressive U.S. investment banker that was Bob Diamond,” said Alan Beaney, who helps manage 200 million pounds ($315 million), including Barclays shares, at RC Brown Investment Management Plc in Bristol, England. “His appointment signals that the bank is not going to be as brazen as it has been in the past.”

    Garlic knot beating in Vero Beach sends man with ‘Fat Boy’ tattoo to slammer, report shows (TCP)
    A man on Aug. 19 told Indian River County Sheriff’s deputies he was a pizza delivery person and was taking pizza to an address in the 400 block of 9th Street Southwest in Vero Beach. The pizza deliverer said when he got there, Robert Wheeler, 48, was waiting for him outside. The pizza deliverer said that when he lowered his window, Wheeler asked him who he spoke with on the phone before punching him in the face. The pizza deliverer said Wheeler punched him “because he forgot the garlic knots.” Wheeler then instructed him to “give that to the person working on the phone back at the restaurant.” Wheeler, who has the word “fat” tattooed on his left arm and “boy” on his right, told investigators he hit the pizza delivery person in the face. But, he said the issue was money he said the restaurant owed him — not forgotten garlic knots.

    / Aug 31, 2012 at 9:30 AM
  • Write-Offs

    Write-Offs: 08.30.12

    $$$ Something something something “[Bernanke] must once again address whether there is more the Fed can do to get the economy going and whether it is worth taking chances on controversial new programs” [WSJ]

    $$$ Brussels pushes for wide ECB powers [FT]

    $$$ Google, Apple CEOs in secret patent talks [Reuters]

    $$$ Goldman is struggling to sell an ABS deal backed by Bob Dylan royalties, inspiring many FT jokes [FT]

    $$$ Chipotle caught STEALING pennies from hapless customers nationwide in deceptive receipt rounding scandal [Daily Mail]

    $$$ Kelly & Dylan finally get together [NYP]

    $$$ A bulge bracket bank in New York is looking for a senior internal audit manager [DBCC]

    $$$ Guy voting Republican [CNBC]

    $$$ Sharp Elbows Among Street Lawmen [WSJ]

    $$$ Citi is looking for a little more space [WSJ]

    $$$A 97-year-old message in a bottle found by Scottish fishermen in their catch has set the world record for spending the longest time at sea.” [Bloomberg]

    $$$ Over 100 students in Harvard’s “Intro to Congress” class are being investigated for cheating [Crimson]

    / Aug 30, 2012 at 6:54 PM
  • News

    BloombergTV Floored By The Revelation Ben Bernanke Owns Jeans


    And wears them! In public! Where people can see him! The previously held assumption that he eats, sleeps, and showers exclusively in suits from Jos A. Bank hath been shattered! (This is almost as disorienting as the time Alan Greenspan was spotted in a tank top and cutoffs while running errands, though not nearly as bad as when the neighborhood kids got an eyeful the time came out to yell at them wearing only slipper-socks and his wife’s dressing gown!)

    Jackson Hole Preview: Bernanke Goes Super-Casual [BloombergTV]

    / Aug 30, 2012 at 6:05 PM
  • Unrelatedly, I'm not sure I'd invest with DEF no matter what their fees.

    News

    SEC Finds Retail Investors Too Stupid To Invest Without SEC Assistance

    This is boring but short so focus for a minute, there will be an easy quiz: So assuming that the value of the assets in your account managed by DEF totaled $450,000, what advisory fee will you be charged? Is it: I know, I know, you cheated: the right answer is the one highlighted in […]

    / Aug 30, 2012 at 5:35 PM
  • News

    Bonus Watch ’13: LightSquared

    LightSquared is a wireless venture that seeks to create “convenient connectivity for all.” Unfortunately, as the Wilbur Falcone fans among us know, it’s looking like it’ll be a dark day in hell before that happens, on account of bunch of forces working together to shut this thing down at every turn, including but not limited to the yachting community that claims GSP interference caused by LS will result in boats getting lost at sea; the National Oceanic Atmospheric Administration, which has said LightSquared “may degrade precision services that track hurricanes, guide farmers and help build flood defenses”; and the FAA, which recently put out a study estimating LS could “cost 794 lives in aviation accidents over 10 years with disruptions to satellite-aided navigation.” Also not helping is that LightSquared filed for bankruptcy in May, the company is blowing through cash faster than Wilbur’s Studio 54 days, and senior executives won’t stop quitting. While some people might take stock of the situation and decide, at this point, to throw in the towel, Wilbur Falcone’s benefactor is not some people. He’s making this thing work if it’s the last thing he does. So, what to do? Obviously a couple of miracle workers are going to be needed and the thing about miracle workers is that they don’t come cheap. Gotta spend money to make money.

    Troubled wireless-satellite company LightSquared wants permission to dole out up to nearly $6 million in cash bonuses to four of its top employees, including its interim chief executive. Recent months have seen LightSquared burn through money–it has spent $134.3 million since filing for bankruptcy in May, according to its most recent monthly operating report, and executives alike. In court papers filed Wednesday, LightSquared said four senior executives have left the company in the past six months, including its former chairman of the board and CEO. The company wants to make sure four “irreplaceable employees” stick with the company as it attempts to claw its way out of bankruptcy protection and help to make the reorganization as fast and cheap as possible. LightSquared’s bonus proposal paves the way for a “total possible cash payout of approximately $5.985 million” over two years, according to a filing with the U.S. Bankruptcy Court in Manhattan. Four employees–interim CEO, president and chairman of the board Douglas Smith; Chief Financial Officer Marc R. Montagner; general counsel Curtis Lu; and its executive vice president, regulatory affairs & public policy Jeffrey Carlisle–would be eligible for incentives consisting of cash and restricted stock units paid in shares of the company’s current common stock.

    If the executives satisfy cash preservation goals, make progress in LightSquared’s efforts to resolve certain regulatory issues and emerge from bankruptcy by the end of 2013, they’ll receive vesting of all issued stock and “aggregate incentive payments of cash up to 285% of each such key employee’s annual salary,” LightSquared said. Hitting less aggressive goals, like exiting bankruptcy by the end of June 2014, would come with smaller payouts, like a cash bonus equal to 100% of the executives’ annual salary, in the case of the mid-2014 bankruptcy exit. Mr. Smith currently makes $700,000 annually; Mr. Montagner and Mr. Lu $500,000 each; and Mr. Carlisle $400,000. LightSquared said each of the employees “provides critical services, drives performance, and impacts LightSquared’s ability to enhance value in the Chapter 11 cases.” The group has also had to take on extra work recently, as more and more employees have left LightSquared both voluntarily and involuntarily. The company said its total employee headcount has dropped by 60% in the last six months. The bonus plan aims to motivate the company’s leaders to manage its businesses and working capital effectively and maximize the value of the estate for the benefit of all stakeholders, LightSquared said.

    LightSquared Seeks to Pay Key Executives up to $6M in Bonuses [DowJones]

    / Aug 30, 2012 at 4:12 PM
  • News

    Julian Robertson Made Mitt Romney An Offer He Could Refuse

    And did! (Next time think about throwing in a tutorial on not letting The Man make you his bitch and some tales from the crypt to sweeten the deal.)

    Not long after Mitt Romney dropped out of the presidential race in early 2008, a titan of New York finance, Julian H. Robertson, flew to Utah to deliver an eye-popping offer. He asked Mr. Romney to become chief executive of his hedge fund, Tiger Management, for an annual salary of about $30 million, plus investment profits, according to two people told of the discussions. For Mr. Romney, who had spent the previous decade in public life forgoing any paychecks, the position promised to catapult him back to the pinnacle of American business and into the ranks of the stratospherically rich. Several friends and relatives urged him to accept. “Let’s put it this way,” said Mr. Robertson. “He could have made a lot of money.” But Mr. Romney was uninterested.

    Defeat, Introspection, Reinvention, Nomination [NYT]

    / Aug 30, 2012 at 1:44 PM
  • News

    New Barclays CEO May Or May Not Have The Balls To Take An Ax To Bob Diamond’s Baby, Says Guy

    Antony Jenkins said he will outline his plans for Barclays in the first quarter of next year. “The challenges that confront investment banking as an industry are driven by regulatory change and the economic environment,” the new CEO said by telephone today. “It requires us to think strategically about the direction of investment banking.” The […]

    / Aug 30, 2012 at 12:37 PM
  • markadelsons&p

    Opening Bell

    Opening Bell: 08.30.12

    Credit Rating Gadfly Leaves S&P (WSJ) Mark Adelson, who pushed for tough rating criteria, including those that led to the unprecedented downgrade of U.S. debt last year, left Standard & Poor’s Ratings Services on Monday. The departure of Mr. Adelson, a controversial figure among some market participants and colleagues alike, highlights the rating industry’s difficulties […]

    / Aug 30, 2012 at 7:00 AM
  • Write-Offs

    Write-Offs: 08.29.12

    $$$ Something something something ECB bond-buying [FT]

    $$$ Banker Bonuses At Risk As EU Lawmakers Fight Barnier Plans [Bloomberg]

    $$$ Yelp Surges After Lockup Expires [DealBook]

    $$$ M&A volumes are down but at least there are a lot of small deals [DealBook]

    $$$ People prefer potential success to actual success in hiring [HBR]

    $$$ “At each of its most efficient restaurants, Chipotle averages more than 350 transactions during the lunch hour — about one every 11 seconds.” [WSJ, related?]

    $$$ Prudential is looking for a fixed income senior associate [DBCC]

    $$$ Greg Fleming won’t run E*Trade [Term Sheet]

    $$$ “The interests of PE firms and their investors do not coincide with the companies that have been taken over, not in the way that Romney and his adherents would have you believe.” Matt Taibbi gropes toward a theory of the corporation. [RS]

    $$$ Bond-Trading Firm Gleacher Said To Seek Buyer [Bloomberg]

    $$$ Barack Obama does a Reddit AskMeAnything, doesn’t really answer anything [Reddit]

    $$$ Romney Party Yacht Flies Cayman Islands Flag [ABC]

    / Aug 29, 2012 at 6:55 PM
  • vikrampanditshades

    News

    Citi Pays $590mm To Settle Lawsuit Over Not Selling Crappy Mortgage Bonds

    Citi settled a CDO case for $590 million today, and if you are following along at home you’ll note that that is more than 2x as much as it settled its last CDO case for. There are a number of reasons for that but a big one is: in this case, Citi is in trouble […]

    / Aug 29, 2012 at 6:31 PM
  • News

    Theory: JPMorgan Would Be In A Helluva Lot Better Shape If Jamie Dimon Would Take Four Months Vacation Each Year

    In her fascinating 1999 biography of J.P. Morgan,”Morgan: American Financier,” Jean Strouse writes, “He could, he said, do a year’s work in nine months but not in twelve.” Morgan would keep a workaholic’s schedule while in New York but would break for frequent trips to Europe, flopping around its spas to ward off depression and […]

    / Aug 29, 2012 at 6:01 PM
  • Tell her all about it.

    Hedge Funds

    New SEC Rules Practically Require Hedge Funds To Advertise On Dealbreaker

    The day when you can advertise your hedge fund on Dealbreaker creeps ever closer, so claim your spot now because they are going fast.* The SEC has shown some justifiable skepticism about implementing the JOBS Act, and at least SEC-ster thinks that it’s been dragging its feet on the hedge fund advertising rules, but still, […]

    / Aug 29, 2012 at 3:48 PM
  • News

    Small-Time Crooks No Longer Welcome At Wells Fargo, Bank Of America

    Richard Eggers knows what we’re talking about.

    The former farm boy speaks deliberately, can’t remember the last time he got a speeding ticket, and favors suspenders, horn-rimmed glasses and plaid shirts. But the 68-year-old Vietnam veteran is still too risky for Wells Fargo Home Mortgage, which fired him on July 12 from his $29,795-a-year job as a customer service representative. Egger’s crime? Putting a cardboard cutout of a dime in a washing machine in Carlisle on Feb. 2, 1963. “It was a stupid stunt and I’m not real proud of it, but to fire somebody for something like this after seven good years of employment is a dirty trick when you come right down to it,” said Eggers of Des Moines. “And they’re doing this kind of thing all across the country.”

    Big banks have been firing low-level employees like Eggers since the issuance of new federal banking employment guidelines in May 2011 and new mortgage employment guidelines in February. The tougher standards are meant to weed out executives and mid-level bank employees guilty of transactional crimes, like identity fraud or mortgage fraud, but they are being applied across-the-board thanks to $1-million-a day fines for noncompliance…Bank of America has embarked on a similar firing binge to shed any employee convicted of a criminal offense involving dishonesty, breach of trust or money laundering, employment attorneys say.

    Wells Fargo fires Des Moines worker for laundromat incident 49 years ago [DMR]

    / Aug 29, 2012 at 3:40 PM
  • Hedge Funds

    Once Paulson And Co’s Investments Go Up Instead Of Down They’ll Be All Set

    Some of the questions focused on Mr. Paulson’s flagship fund’s performance, which he admitted was disappointing, though the tone of the call wasn’t “agitated or aggressive, even though some people were frustrated,” said a person familiar with the discussion. One person asked Mr. Paulson for a timeline of how long it would take to turn […]

    / Aug 29, 2012 at 2:07 PM
  • News

    D.E. Shaw Geniuses Build Their Greatest Model Yet

    Do you worship at the Temple of Chipotle? Do you refuse to make use of the online order option that allows you to bypass the line, as one half of Team Dealbreaker does, but unlike said burrito lover, prefer not to show up before 12 so as to beat the rush? Would you die before patronizing some inferior establishment for lunch but would also like to know what kind of wait you’re going to be dealing with before making the trip, or, alternatively, not really care how long you have to wait but just get off on predicting stuff to a 3-sigma confidence level? Some enterprising D.E. Shaw employees have got covered.

    FYI- D.E. Shaw employees have built a model that predicts the length of the line at the Chipotle down the street from the 1166 Ave of the Americas office. Not only that, they are really excited about how accurate it is.

    Obviously this needs to be shared and disseminated ASAP, for the greater good, unless it’s being kept proprietary at this time for reasons that involve a little something called the DE Shaw Chipotle Line Length Fund I and investors who would pay 2 and 20, nay, 3 and 50 to get in on this little money-making machine.

    Related: Tools Of The Trade: How To Prove To DE Shaw You’re DE Shaw Material

    / Aug 29, 2012 at 1:47 PM
  • Opening Bell

    Opening Bell: 08.29.12

    Occupy Sets Wall Street Tie-Up As Protesters Face Burnout (Bloomberg)
    Occupy Wall Street, the global movement against inequality that ignited in Manhattan last year, will mark its first anniversary by trying to block traffic in the financial district and encircle the New York Stock Exchange. Planning for the Sept. 17 protest, dubbed S17, follows months of internal debate and flagging interest, according to interviews with organizers. The morning action may include attempts to make citizens’ arrests of bankers, and some activists intend to bring handcuffs, they said. “We are here to bring you to justice,” said Sean McKeown, a 32-year-old chemist and New York University graduate who’s helping organize the demonstration. “We’re offering you the chance to repent for your sins.”

    HSBC Marks Plaza For Eviction Of Hong Kong Occupy Protest (Bloomberg)
    HSBC is marking out the area in its Hong Kong ground floor plaza that has been occupied by protesters for more than 10 months ahead of their eviction by court-authorized officers. Hong Kong’s High Court has issued a writ of possession empowering a bailiff to re-possess the site, according to an internal HSBC memo obtained by Bloomberg News. Gareth Hewett, a HSBC spokesman, confirmed the content of the memo. “The process by which the bank takes back the plaza has reached a new stage and is now in the hands of the bailiff, whose job is to execute the writ,” according to the memo. The Occupy Central protest in Hong Kong, one of the longest-running demonstrations sparked by the Occupy Wall Street movement, numbered about 50 at the peak. They were ordered by the court to evacuate by 9 p.m. on Aug. 27.

    Stamford salts aim salvo at hedgie’s hq (NYP)
    Ray Dalio, founder of $130 billion asset manager Bridgewater Associates, is not making friends in his company’s new hometown of Stamford, Conn. Residents and officials of the coastal city are up in arms after early development of a piece of an 80-acre plot of land — now Bridgewater’s proposed waterfront home — resulted in the surprise demolition of part of a historic 14-acre boat yard. The demolition was specifically prohibited by Stamford officials…“To me, this is the latest outrage by Governor Malloy — giving a water view to a hedge-fund operator and taking away a boat yard that serviced well over 1,000 boats and boaters each year,” said Randy Dinter, a boat owner and member of the group Save Our Boatyard, founded by Maureen Boylan after the boat yard demolition.

    As Europe’s Banks Stall, Companies Look Afar (WSJ)
    The increased search for alternative sources of funding is yet another indication that Europe’s debt crisis is far from over. That could intensify in the fall, when the European Commission, European Central Bank and International Monetary Fund assess whether Greece has done enough to cut its debts. At the same time, some economists expect Spain to seek a rescue package to cut its own debt.

    Argentines Plan to Shoot Gulls to Save the Whales (NYT)
    What began as bizarre bird behavior has turned into something out of a horror film for threatened whales in Argentina, where seagulls have learned that pecking at the whales’ backs can get them a regular seafood dinner. Seagull attacks on southern right whales have become so common now that authorities are planning to shoot the gulls in hopes of reducing their population…Seagulls around the city of Puerto Madryn discovered about a decade ago that by pecking at the whales as they come up for air, they can create open wounds. Then, each time the whales surface, it’s dinner time: Gulls swoop down and dig in, cutting away skin and blubber with their beaks and claws. Marcelo Bertellotti’s answer: Shoot the gulls that display this behavior with air rifles and hunting guns, and recover each downed bird before they are eaten along with the ammunition, causing still more damage to marine life. His “100-day Whale-Gull Action Plan” was approved by the government of Chubut, and provincial officials came out Tuesday in defense of it.

    Ackman: $900M Penney markdown (NYP)
    Activist investor Bill Ackman has been beating the drums for a sale of mall owner General Growth Properties in recent days, but it’s his stake in JCPenney that’s really causing him grief. The hedge-fund manager confessed to investors that his 18 percent stake in Penney had lowered returns by about $900 million this year. In the latest quarterly investor letter of his $10.5 billion Pershing Square firm, he said Penney “has cost us more than nine percentage points of gross return this year.” The hedge fund lost 6.4 percent in the quarter, after the retailer’s shares slid from their high of $43 in February.

    Asia’s Tide Of Cash Hems Policy Makers (WSJ)
    Foreign investors are pumping money into several Asian economies, pushing up currencies, stocks and property prices, but threatening to complicate efforts by the region’s policy makers to soften an economic slowdown. Investment flows to Southeast Asia and South Korea have swelled in recent months, and overseas money has even crept back into India, as global markets calmed and risky assets became popular again. Analysts expect such markets to get a further boost if central banks in the U.S. and Europe step in with additional measures to bolster their economies.

    Burglary Suspect Blamed for Thousands of Chicken Deaths (WBOC)
    Authorities say a Delmar man is facing burglary and related charges following allegations that he got drunk and turned off the power to three poultry houses, which led to the deaths of nearly 70,000 chickens. The Wicomico County Sheriff’s Office reports that shortly after 9 a.m., Saturday, Aug. 25, a deputy responded to a reported incident at a poultry farm on the 32000 block of East Line Road in Delmar, Md. The deputy met with the property owner who stated that the electric power had been turned off to his three chicken houses on his property during the night. According to the property owner, this deprived the flock of food, water and cooling fans. As a result, nearly the entire flock was found deceased. Police said that when the property owner entered the control shed that controlled the power, he located an unknown man passed out on the floor of the shed, clad only in a T-shirt and boxer shorts. The man was also lying in a pool of his own urine and had a strong odor of alcohol coming from him, investigators said.

    / Aug 29, 2012 at 9:30 AM
  • News, Write-Offs

    Write-Offs: 08.28.12

    $$$ Catalonia Asks Spanish Government for Emergency Funds [NYT]

    $$$ Asia’s Tide of Cash Hems in Policy Makers [WSJ]

    $$$ Morgan Stanley Win On Brokerage Would Be Pyrrhic Victory [Bloomberg]

    $$$ Paulson Assures Bank of America in Call [WSJ]

    $$$ “When I asked a PE tax attorney if what Bain is doing is allowed, she told me that ‘allowed’ and ‘not allowed’ isn’t always the right way to think about it.” Tax lawyers! [Term Sheet]

    $$$ The CFA Institute comes out against Great Idea Corp. [Forbes]

    $$$ Shia LaBeouf Got Into Character for Upcoming Film by Dropping Acid On Set [Gawker]

    $$$ William Blair is looking for an experienced associate for its technology investment banking group in San Francisco [DBCC]

    $$$ S.E.C. Charges 8 With Insider Trading in Sanofi Deal [DealBook]

    $$$ ISM sells a low-latency feed of its business data to Reuters [MarketBeat]

    $$$ “There’s an idea that when a lawyer or law firms are going to get a big payment, that there’s something somehow wrong about that, just because it’s a lawyer. I’m sorry, but investment banks have hit it big, a lot bigger the plaintiffs’ lawyer firms have hit it big. They’ve hit it big many times.” This Law Blog story on the Grupo Mexico verdict is kind of amazing. [WSJ Law Blog]

    $$$ Wall Street Rocker Gary Marks Settles With SEC Over Whether Knew What He Was Talking About [NYO]

    $$$ “There were no workers that were forced to attend the event. We had managers that communicated to our work force that the attendance at the Romney event was mandatory, but no one was forced to attend the event.” [Raw Story]

    $$$ Hitler clothing store in India asked to change name [JTA]

    / Aug 28, 2012 at 7:00 PM
  • Carl Icahn

    News

    Carl Icahn’s CVR Energy Tactics Are Already Paying Off

    When a company does something that corporate-governance activists really don’t like, like adopting a poison pill, typically they announce that “the board decided unanimously to punch you in the face for your own good.” There’s some perception that, if they’re all in it together, the directors can’t be up to anything too unsavory. Forest Labs […]

    / Aug 28, 2012 at 4:30 PM
  • News

    Hedge Fund Manager Paul Singer Thinks Paul Ryan Chris Christie Mitt Romney, His First Second Last Choice For The Ticket, Would Make A Great President

    Anyone but you know who.

    Paul Singer, a prominent hedge-fund manager, has employed many tactics in seeking to ensure a Republican victory in November…he approached Rep. Paul Ryan and offered to back him in a presidential bid. When Mr. Ryan demurred, Mr. Singer’s support helped him emerge as the vice-presidential nominee, people close to the matter said…Mr. Singer has warmed up to Mr. Romney though he didn’t support his run for president in 2008 and last year pushed…New Jersey Gov. Chris Christie to run. “As I have gotten to know Mitt I have become increasingly of the view that he will make a very fine president,” Mr. Singer said in a rare interview.

    Wall Street’s Paul Singer Makes His Influence Felt [WSJ]
    Related: Meet The Draft Christie For President Committee

    / Aug 28, 2012 at 4:12 PM
  • YOU DON'T WANT TO KNOW WHAT HAPPENS WHEN THE MUTE COMES OFF

    David Einhorn’s Brother Will Rip Out The Hearts Of Underperforming Companies And Shove Them Down Their Throats, But In A Polite, Midwestern Way

    A world away from Wall Street and the tech money culture of Silicon Valley, the Einhorn family started a venture capital firm here [in Milwaukee], which raised a $40 million fund last year. David Einhorn is the largest investor in the fund, run by his brother, Daniel, and their father, Stephen. The firm, Capital Midwest […]

    / Aug 28, 2012 at 1:47 PM
  • Does this look like the face of a man who would etc. etc.

    News

    Man Who Deceived Dying AIDS Patients Still Looks Like Kind Of A Hero Compared To Insurance Companies He Ripped Off

    When the earnest scoldy public-interest journalists at ProPublica take it upon themselves to defend a financial scam artist who tricked terminally ill people into signing documents that they didn’t understand,* you have to figure there’s a pretty good story behind it. Oh God is there. I challenge you to find a better story about mispriced […]

    / Aug 28, 2012 at 12:00 PM
  • News

    Deferring ‘Significant’ Amounts Of Compensation, Placing Caps On Bonuses Not Working Out So Well For Barclays

    Only in that senior people the bank worked hard to recruit are quitting en masse. Otherwise, it’s great.

    Barclays spent a decade assembling a team of the most successful gas and power traders in Europe. It took less than 16 months to lose most of them. Mercuria Energy Trading SA, based in Geneva, hired five members from the group of about a dozen from March 2011 to June this year, including Phil Sutterby as head of U.K. and European gas and Roger Jones, the former global chief of commodities, according to people with knowledge of the moves. Another six left for companies including UBS, Noble Group Ltd. and Freepoint Commodities LLC. The departures from the U.K.’s second-biggest bank reflect bonus caps, limits on the amount of money traders can risk and shrinking revenue from the division that includes commodities. While hiring from hedge funds and rival lenders helped Barclays catch up with Goldman Sachs and Morgan Stanley in commodity derivatives, according to Greenwich Associates, a focus on deferred pay left the bank vulnerable to headhunters.

    “The significant amount of deferred compensation and the aggressive cap on cash payouts at Barclays has unsettled a number of individuals,” said Peter Henry, New York-based head of front-office research at Commodity Search Partners. “Add to that the fact they have been systematically targeted by privately held trading houses, specifically Mercuria, and it’s fairly understandable why senior traders are leaving.”

    Bonus Limits Spark Exodus At Barclays Trading Unit [Bloomberg]

    / Aug 28, 2012 at 11:33 AM
  • Opening Bell

    Opening Bell: 08.28.12

    Greece Plans ‘Special Economic Zones’ to Boost Growth (Reuters)
    Greece plans to set up “special economic zones” to attract private investment and help lift its debt-laden economy out of depression, the government said on Tuesday. The zones would offer investors tax and administrative advantages. Athens is already in talks with the European Commission to get approval for the move, Development Minister Costis Hatzidakis told a news conference. “We believe these zones will boost the real economy by creating a special regime to attract investment and generate exports,” Hatzidakis said.

    Spain’s Catalonia to Ask for Aid From Madrid (WSJ)
    Catalonia, Spain’s most indebted region, said Tuesday it will ask for €5.02 billion ($6.27 billion) in financial assistance from the Spanish government’s liquidity program, as it struggles to pay for basic services such as hospitals, schools and care homes. Catalan government spokesman Francesc Homs said at a news conference that the government will ask for the funding to “face debts maturing in the coming months.”

    ECB’s Draghi Stuck At The Office, To Skip Jackson Hole Symposium (WSJ)
    “ECB President Mario Draghi had hoped to attend the annual economic symposium in Jackson Hole organized by the Federal Reserve Bank of Kansas City, but has decided not to go to Jackson Hole, due to the heavy workload foreseen in the next few days,” an ECB spokesperson wrote in an email.

    Leonardo DiCaprio To Bare All In ‘Wolf Of Wall Street’ (NYDN)
    “There will be some pretty illicit sex scenes coming up,” said a set insider. “It involves four guys and two girls.” And there’ll even be a little guy-on-guy action in one of the orgies — but DiCaprio won’t be in those. Not that there would be anything wrong with that. Scorsese’s film follows the rise and eventual imprisonment of drugged-out real-life former stockbroker Jordan Belfort, who is now a motivational speaker and says he has been sober since his life imploded in the go-go late ’90s and he went to prison. The movie started shooting in the Financial District over the weekend and there’ll be more filming in midtown this week. Later this month, the action will move to a Hamptons estate. DiCaprio was spotted rehearsing at Bank of America with co-star Jonah Hill. Matthew McConaughey also stars, as Belfort’s mentor. “They were incognito and Leo didn’t take his sunglasses off the entire time,” said a Merrill Lynch source. There are some scenes you can bet will be shot strictly behind closed doors. “We have a scene in an office with a troupe of hookers during a coffee break,” the set insider told us. “They are in the process of casting a ton of beautiful models, who are willing to bare it all, to portray escorts and strippers,” our source said. “The girls have to be incredibly hot.”

    Connecticut Homes Biggest Losers As Wall Street Cuts (Bloomberg)
    Connecticut, for 25 years the state with the highest per capita income in the U.S., is now leading the nation in home-price declines as Wall Street trims jobs and bonuses that had driven multimillion-dollar property sales. Prices in the Fairfield County area, home of the banker bedroom communities of Greenwich and New Canaan, tumbled 12.9 percent in the second quarter from a year earlier, the biggest decline of the 147 U.S. metropolitan areas measured by the National Association of Realtors.

    Hero Reagan’s Compromise Would Collide With Tea Party Certitude (Bloomberg)
    Ronald Reagan remains the modern Republican Party’s most durable hero. His memory will be hailed as The Great Uncompromiser by those who insist the GOP must never flag in its support for smaller government, lower taxes and conservative social values. His record tells a different story. During Reagan’s eight years in the White House, the federal payroll grew by more than 300,000 workers. Although he was a net tax cutter who slashed individual income-tax rates, Reagan raised taxes about a dozen times. His rhetoric matched that of many of today’s most ardent Christian conservatives, yet he proved to be a reluctant warrior on abortion and other social issues. Perhaps most tellingly, he was willing to cut deals, working closely with Democratic leaders such as House Speaker Tip O’Neill of Massachusetts to overhaul Social Security and House Ways and Means Committee Chairman Dan Rostenkowski of Illinois to revamp the tax code.

    Ann Romney Takes Biggest Stage Yet To Humanize Husband (Bloomberg)
    Mitt Romney’s likability gap was evident in a Washington Post/ABC News poll released yesterday. The poll, taken Aug. 22-25, showed 27 percent of registered voters find Romney to be more friendly or likable among the two candidates, compared with 61 percent for the incumbent.

    Kidney for Ohio patient’s transplant put in trash (AP)
    A nurse accidentally disposed of a kidney from a living donor this month at an Ohio hospital, and doctors tried unsuccessfully for at least two hours to resuscitate the organ in what medical experts describe as a rare accident, health officials said. “Human error rendered the kidney unusable,” University of Toledo Medical Center spokesman Toby Klinger said Saturday, but he declined to give more details, citing the hospital’s investigation into what happened and its respect for the privacy of the patients involved. But one of the doctors involved told Dr. David Grossman, a Toledo-Lucas County health commissioner, that a nurse disposed of the kidney improperly. Two nurses have been placed on paid administrative leave while the hospital reviews what happened, Klinger said.

    / Aug 28, 2012 at 9:30 AM

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