Matt Levine

  • Tendentious anthropomorphization of Libor in victory pose

    Banks, News

    Lawsuit Claiming Banks Worked Together To Fix Libor Dismissed Because Banks Were Supposed To Work Together To Fix Libor

    I’ve occasionally pointed out that one problem with the antitrust Libor lawsuits is that the allegations are mostly “the banks lied about Libor in order to trick each other about their creditworthiness and/or screw each other on some swaps trade,” so it’s hard to claim that they were all working together in a big antitrust […]

    / Apr 1, 2013 at 5:59 PM
  • Not sure how they chose which to be solid & which to be dotted other than, like, the ones that look bad got dotted lines.


    Dell’s Board Was So Fed Up With Its Managers That It Sold Them The Company

    I learned a new word, or word-like sequence of letters, reading the Dell merger proxy this weekend. The word is “must-believe,” and it’s a noun meaning a thing you must believe in order to embark on a certain course of action. You don’t have to believe a must-believe, but if you don’t believe it you […]

    / Apr 1, 2013 at 1:56 PM
  • Not to scale. In particular this may not fully reflect the statute of limitations.

    Hedge Funds, News

    SAC Can’t Even Put Ten Days Of Insider Trading Behind It

    Once upon a time there was a settlement between the SEC and Citigroup over some bad stuff that Citi did, or maybe did, since the settlement did not require Citi to admit any guilt. But then the judge overseeing the case, Jed Rakoff of the Southern District of New York, bravely stood up and said: […]

    / Apr 1, 2013 at 10:48 AM
  • I want to think that Iksil has a sense of humor about the whole thing and has this poster hanging in his living room. Though I guess it'll be funnier once any legal liability is behind him.


    No One Wanted To Tell The London Whale He Was Looking A Little Bloated

    Here’s a good Sonic Charmer post about how JPMorgan could have prevented the London Whale loss by imposing a liquidity provision on the Whale’s desk: Liquidity provision means: ‘the more illiquid the stuff you’re trading, the more rainy-day buffer we’re going to withhold from your P&L’. And since one way a thing becomes illiquid is […]

    / Mar 28, 2013 at 5:58 PM
  • I dunno. Michael Dell. He's a guy.


    Short-Term Shareholders Aren’t Looking Out For The Long Term, And Vice Versa

    Yesterday we talked a little about Dell and its vague desire to escape the short-term obsessions of the public equity market yesterday. Today I came upon this new paper by Harvard Law professor Jesse Fried, about how long-term shareholders are really just as bad as the short-term ones. The argument is: companies like to talk […]

    / Mar 28, 2013 at 1:07 PM
  • This is the judge, btw, Denise Cote.


    Banks Want A Chance To Prove Fannie And Freddie Knew They Were Being Lied To

    Ninety percent of what happens in the typical lawsuit is (1) a lawyer for one side sends a letter to the other side asking for some information to prepare for a trial that will never happen, (2) the lawyer for the other side sends back a passive-aggressive letter refusing to provide that information, and (3) […]

    / Mar 27, 2013 at 6:05 PM
  • What can I say, I like Dell


    Michael Dell Wanted To Escape Public Markets’ Short-Term-ism For About 45 Days

    Two ideas at the heart of modern financial economics are the efficient markets hypothesis, which says that investing doesn’t work, and the Modigliani-Miller theorem, which says that corporate finance doesn’t work.1 Also there is a financial industry which is pretty much organized around ignoring those ideas. Hahaha how stupid of David Einhorn to think that […]

    / Mar 27, 2013 at 3:57 PM
  • This is CalPERS's headquarters. Obviously we're not big fans of impersonal pictures here, so I apologize. To humanize it a bit, I'll point out that this picture is from the website of Alliance Roofing, Northern California's leading commercial roofing and waterproofing contractors, who I suppose (I hope?) put the roof on CalPERS's headquarters. (It'd be funny if they didn't though. "Here's a nice roof, let's use that one.") Contact them - their website is - for all your roofing needs.


    Don’t Do It, CalPERS!

    What is CalPERS’s job? There’s actually an answer: it’s to “Provide responsible and efficient stewardship of the System to deliver promised retirement and health benefits, while promoting wellness and retirement security for members and beneficiaries.” I suppose “the System” is defined somewhere, and blah blah blah health benefits and wellness and beneficiaries, but I prefer […]

    / Mar 26, 2013 at 3:07 PM
  • I'd be happier with the $5 billion


    Turns Out Warren Buffett Doesn’t Want That Much Goldman Stock

    Derivatives are confusing, even pretty simple ones, which is why Goldman Sachs can describe Warren Buffett’s sale of $5 billion of GS stock like this: The Goldman Sachs Group, Inc. today announced that it has amended its warrant agreement with Berkshire Hathaway Inc., and certain of its subsidiaries (collectively, Berkshire Hathaway) from cash settlement1 to […]

    / Mar 26, 2013 at 11:35 AM
  • Jeroen Dijsselbloem


    Cyprus Was The Template For All Future European Bank Bailouts For A Whole Afternoon

    There is a widespread perception that some banks are so systemically important that they are “too big to fail,” and that this status gives them a funding advantage because if they do run into trouble the government will bail them out and protect the investments of those who fund them,1 and that this is an […]

    / Mar 25, 2013 at 5:04 PM
  • Not welcome in Canada

    Hedge Funds

    Now Canada Wants Activist Investors To Share With The Rest Of The Class

    If you’re an activist investor your job is to (1) think of an idea for how to make a company’s stock go up, (2) buy stock in the company, (3) convince them to do your idea, and (4) sell high. Step 3 tends to involve lots of attention-seeking – it’s easier to wear a company […]

    / Mar 22, 2013 at 5:20 PM
  • Find the synthetic CDOs.


    Everybody Wins With Bespoke Synthetic CDOs

    Bloomberg this week had an article about how bespoke synthetic CDOs are coming back in vogue, and various people have fretted about that, because synthetic CDOs are scary, financial crisis, etc. And, sure, it’s certainly possible that the next financial crisis will be exactly like the last, only with more Cyprus.1 But today let’s talk […]

    / Mar 22, 2013 at 1:20 PM
  • Just, like ... I mean, do the interview indoors, y'know?


    Your 2 And 20 Fees Don’t Even Get You A Toaster

    If you believe in market efficiency you might think that the fees that an investment vehicle charges should relate to the value that the vehicle provides. But be careful: that theory is not falsifiable by saying “oh, well, this fund charges 3 and 50 and is down 10% this year.” Maybe that fund had a […]

    / Mar 21, 2013 at 6:53 PM
  • Really, appreciate the interest, but we're horrible.


    Dell Strategically Reminding Everyone How Horrible It Is

    There’s been a lot of fun stuff in the news about Dell recently, in the run-up to tomorrow’s end of the go-shop period on its LBO by Silver Lake and CEO Michael Dell. The Journal today kind of explained why: People working on potential challenges to the Dell offer say the revelation of information on […]

    / Mar 21, 2013 at 1:29 PM
  • Oh hey cow.


    Fitch And Kroll Are Happy To Make Mortgage Securitization Fun Again

    Bloomberg has a delightful story today about a new JPMorgan RMBS transaction, its first non-agency deal since the crisis. Specifically about this: The bonds are made riskier by the New York-based bank and other originators of the mortgages offering weaker promises to repurchase misrepresented loans than those on similar deals, Fitch Ratings said today in […]

    / Mar 20, 2013 at 7:24 PM
  • Oh Bob.


    Freddie Mac Adorably Thought Banks Had Promised Not To Lie To It

    I guess we should talk about Freddie Mac suing all the banks for manipulating Libor. I know, one more Libor lawsuit, whatever. Barely even that: Freddie Mac was already suing all the banks for manipulating Libor, as part of various pending class action lawsuits; now it’s just also suing them on its own. So, why? […]

    / Mar 20, 2013 at 11:51 AM
  • Corbat! Use an ATM or something, come on.


    Citi Compensates Bondholders For Pain And Suffering Of Worrying That Citi Might Default

    Back in the pre-Lehman days Citigroup owned a lot of things that, in hindsight, turned out to be awful. Everyone knows that now but various people didn’t know it then, including (1) the people who bought some of those awful things from Citi, (2) the people who bought stock in Citi while it hung on […]

    / Mar 19, 2013 at 5:28 PM
  • One obvious interpretation of my Basel pictures is: I need a vacation.


    Banks Getting Less Risky And/Or More Tricksy

    It’s a good day to be wholly cynical about banks so let’s be mean to the Basel III monitoring exercise. This is a thing where periodically the BIS looks into how far away banks are from meeting their Basel III capital requirements, with about a nine-month lag. The answer is always “pretty far away,” which […]

    / Mar 19, 2013 at 1:46 PM
  • Federico Buenrostro

    Private Equity

    Former CalPERS CEO Accused Of Fraud, Definitely Innocent Of Stealing Office Supplies

    I’m just some guy, but two entities of which I have become aware in my travels are (1) Apollo Global Management and (2) CalPERS. I don’t want to endorse 100% of what either of them does – CalPERS tend to be governance-scoldy, and I’ve seen with my own eyes the withered husks of formerly personable […]

    / Mar 18, 2013 at 6:09 PM
  • No line!


    Cyprus Finds Exciting New Way To Make Everyone Miserable

    Things in Cyprus: kinda bad. There are better places than here to read about it; I particularly recommend Joseph Cotterill here and here, pseudo-Paweł Morski here and here, Mohammed El-Erian here, the FT’s coverage here and here, the Journal’s round-up of analyst reaction here, etc. The basic story is that Cyprus’s government and banks are […]

    / Mar 18, 2013 at 9:27 AM
  • What the office looks like now maybe?


    SAC Puts Ten Days Of Insider Trading Behind It

    So Mathew Martoma: pretty bad investment for SAC, no? He “was unable to generate … winning trades or outsized returns in 2009 and 2010, and did not receive a bonus in either of those years. In a 2010 email suggesting that Martoma’s employment be terminated, an [SAC] officer stated that Martoma had been a ‘one […]

    / Mar 15, 2013 at 3:27 PM
  • I will poke you!


    Senate Subcommittee Feasting On Whale Today

    When I got the Senate Permanent Subcommittee on Investigations report on the London Whale last night, I did what any sensible human would do: I ctrl-F’ed for my name and the names of my friends and enemies, gloated briefly, and then set to work rationalizing not reading the rest of it. After all, it’s ridiculous […]

    / Mar 15, 2013 at 11:46 AM
  • Opaque

    News, Private Equity

    Supercharged IPOs: Like Regular IPOs, But Slower

    Lynnley Browning has an interesting article in DealBook about “supercharged IPOs” today. The gist is that some private equity portfolio companies go public, but keep in place agreements requiring them to pay over 85% of certain tax benefits that they receive to their former IPO owners. This, or so the argument goes, is both unfairsies […]

    / Mar 14, 2013 at 4:53 PM
  • I feel like he'd be a decent swap unwind negotiator.


    Detroit And Its Banks Both Would Prefer To Forget All About Those Interest Rate Swaps

    Here’s a Bloomberg article about how banks made money by doing interest rate swaps with Detroit, and now Detroit is sad, because like a lot of municipalities Detroit swapped its floating rate bonds to fixed to hedge the risk of rates going up, and rates went down, and now the PV of Detroit’s swap liabilities […]

    / Mar 14, 2013 at 12:03 PM
  • How long do you think this will be the top Google Images result for Bain Capital?

    Private Equity

    Judge Decides LBO Boom Could Have Used A Few More Bidding Wars

    The antitrust lawsuit against all the big private equity firms, accusing them of colluding with each other to drive down prices on LBOs in the 2003-2007 boom, was always a bit of a puzzler. On the one hand, there were lots of emails between private equity firms that they’d probably like back, to the effect […]

    / Mar 13, 2013 at 6:51 PM
  • Obviously it parses Guy Who's Short Herbalife Says {Guy Who's Long Herbalife Saying [Guy Who's Short Herbalife Saying (Herbalife Is A Fraud) Is A Fraud] Is A Fraud}


    Guy Who’s Short Herbalife Says Guy Who’s Long Herbalife Saying Guy Who’s Short Herbalife Saying Herbalife Is A Fraud Is A Fraud Is A Fraud

    One day Herbalife will either be put out of business by consumer-protection regulators or it won’t. If it is then Bill Ackman will make a lot of money and Carl Icahn will lose a lot of money, and if it isn’t Ackman will lose a lot of money and Icahn will make a lot of […]

    / Mar 13, 2013 at 3:53 PM
  • David Rubenstein is always being photographed villainously but doesn't he actually look pretty jolly?

    News, Private Equity

    Carlyle Will Now Manage Your Spare Change For You, Basically

    “Hedge funds and private equity funds are secretive pools of capital blah blah blah,” people always say, and there’s some truth to that. But it’s partly true partly because a certain discretion is required by law. Banging on publicly about how awesome your hedge fund is could be taken as a “general solicitation” for investors, […]

    / Mar 13, 2013 at 2:06 PM
  • Gotta mix the dog and non-dog pics up a bit.


    Hank Greenberg Somehow Encouraged By AIG’s Decision Not To Sue The Government

    Hank Greenberg: still at it! My lord. Remember when AIG was going to sue the government along with him, and everyone freaked out, and then it didn’t, and everyone was all “whew, glad that’s over”? Hahaha yeah. Not over. Greenberg filed his amended complaint in his lawsuit against the government today, and in addition to […]

    / Mar 12, 2013 at 7:08 PM

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