A thing that happens from time to time, and also yesterday, is that people in or around the financial services industry say furious things about Ben Bernanke:

“Ben Bernanke is running the most inappropriate monetary policy in the history” of the developed world, said Stanley Druckenmiller, the retired head of Duquesne Capital Management.

A thing that happened a lot today and yesterday is that people asked, well, why do they say such horrible things? “Because they’re true” is a possible answer and if it’s yours you might want to stop here, not much good is going to happen from here on out.

If you don’t believe that Bernanke is a war criminal or whatever, you can read some other proposed answers – by Joe Weisenthal, Neil Irwin, and Matt O’Brien – but be warned, they’re tough going if you like 2-and-20 fees and/or gold. Here, though, is a take from Matt Yglesias that I’m particularly fond of: Read more »

A brief follow-up. Read more »

Richard Fisher is no fan of QE3, and he’s worried that his colleagues at the Fed have developed an unquenchable, $85 billion-a-month habit. Much as he finds their addiction abhorrent, he isn’t ready to abandon them to their fate—runaway inflation and the eventual loss of their teeth. So he’s pushing a 12-step program. First, admit you have a problem. Second, stop buying MBS. Read more »

Economics teaches us that companies do not have an unlimited number of employees to lay off. Data backs this up. Read more »

Have you often felt but never divulged, not to friends and certainly not to colleagues, that the one thing that’s missing from your job is a designated time to dance your ass off? There’s just something about trading that makes you want to move, no? You’re sitting there, buying, selling, yelling at your sales guy when all of a sudden, you get that urge, one that can’t be sated by some foot tapping and finger snapping. No, that isn’t enough. This is a itch that can only be scratched by jumping on your desk and shaking it, while disco balls descend from the ceiling, the lights dim, and house music starts blasting, like bham bham bhamb and boom boom boom.

Unfortunately, at this time, few firms1 have set aside the resources to fulfill these biological needs (nor have they even acknowledged the positive effect a daily shimmy would have on P&L). Happily, one needn’t suffer in silence any longer, according to an amazing piece of investigative journalism by the Times.

When lunchtime comes around, Laurie Batista often grabs a salad near the Flatiron ad agency where she works as an executive assistant and eats it at her desk. But shortly after noon on a sunny, 65-degree Friday in April, Ms. Batista, 31, jumped into a cab with three co-workers and headed west to Marquee, a nightclub on 10th Avenue. After waiting in a line that wrapped around onto 26th Street (and attracted the attention of the police, who wanted to know what was going on), she redeemed a drink ticket for a free cocktail of vodka and fruit punch. A half-hour later, she was wearing purple lensless Wayfarer-style glasses, waving a footlong foam glow stick and mouthing the words to Warren G’s “Regulate.”

Around her, hundreds of other revelers did similar things: a guy in Chuck Taylors moonwalked across the dance floor, a man in a hoodie threw up his hands to form the “W” that stands for the rap group Wu-Tang Clan. Strobe lights bounced off a giant disco ball. Sweat glistened on foreheads. “Gin and Juice” thumped. Cheers erupted. It was midday, but inside Marquee, it could have been 2 a.m. Ms. Batista was one of more than 300 people who attended the latest Lunch Break, a free midday party series whose hosts are Flavorpill, the online culture guide, and Absolut vodka. Introduced last summer, it is the most raucous of a group of lunch-hour dance parties starting up in New York City and around the world. The goal: get the screen-addicted masses to move and groove, often with the lubrication of alcohol. But don’t get drunk: this is not the three-martini lunch of yore (or lore), ending with secretaries being chased around a desk. And please, leave the business cards at the office. “Networking is fine, I’m a big networker myself, but it’s work,” said Sascha Lewis, a founder of Flavorpill. “Let’s just call this what it is: a fun, daytime party for people to enjoy themselves for an hour.”

Naturally, the unquenchable demand presents an opportunity for a hedge fund manager–especially one who feels the impulse himself and was not prepared to allow societal norms or retail security forces hold him down. Read more »

They’re not gratuitously cruel after all:

The settlement deal, the people said, is also notable for something that it did not include: a common provision that prohibits defendants from committing future violations with fraudulent intent. The lack of a so-called fraud injunction is an unusual victory for the target of an S.E.C. action.

I imagine that was heavily negotiated? Other than that here’s what’s going on with Phil these days: Read more »

Is Jamie Dimon too powerful at JPMorgan? I have a wonderful, simple test in mind, though it may be impracticable; anyway here it is:

  • if a majority of shareholders vote in favor of the nonbinding proposal to strip him of his role as chairman of the board, and
  • he remains chairman of the board, then
  • he’s probably too powerful!

Let’s find out!

Honestly, who cares who cares who cares who cares if JPMorgan’s board has an independent Chairman or just an independent Presiding Director? The board’s job is to keep an eye on Jamie; if it failed to do that then giving it a fancy new title doesn’t seem likely to improve performance. Is it your impression that Jamie Dimon, who apparently rides roughshod over pissant Presiding Directors,1 will nonetheless be meek and subservient when faced with a Chairman?

Discussion about this proposal is confused because some people think that having an independent chairman is a good thing in all circumstances, or at least say they do; CalPERs’s governance czar, for instance, believes that “There’s a fundamental conflict in combining the roles of chairman and C.E.O.” and so CalPERS will vote to split the roles at JPMorgan just as they did last year. Others think that, y’know, it depends on the people. The people here would presumably remain the same though there’s some rumbling that Dimon would take his toys and go home if he couldn’t be chairman too.

Outside of CalPERS, though, the universal-good-governance theory doesn’t seem to move anyone much. Here, if you’re interested, are JPMorgan’s top 20 shareholders: Read more »

Opening Bell: 05.09.13

Einhorn’s advice to investors: don’t take my advice (Reuters)
Einhorn, this year’s star attraction at the Sohn Investment Conference, an annual confab where the industry’s top investors share their favorite trade ideas, wrapped up his presentation by offering some words of warning about his public comments. “It doesn’t make sense to blindly follow me or anyone else into a stock,” said Einhorn, president and co-founder of the $8.8 billion hedge fund Greenlight Capital. “Do your own work.” He may have been talking to the converted. Einhorn’s limited impact on Apple Inc shares after he implored the technology giant earlier this year to better use its cashpile has been noted by industry analysts.

Hedge Fund Billionaire Paulson Glosses Over His Losses (Reuters)
“Don’t focus on weekly or monthly returns,” Paulson told attendees at the fifth annual Skybridge Alternatives Conference, adding clients should not micro-manage their fund managers but find someone they like and stick with them for the long term, the people who heard the comments said. Paulson was being interviewed by Anthony Scaramucci, who founded SkyBridge Capital and is a large investor with Paulson’s Recovery Fund. … There was little tough questioning for the man who has notched some of the $2.25 trillion hedge fund industry’s heaviest losses in the past two years and is losing more money this year due to his wager on gold.

Hedge Fund Impresario Plays Host in Las Vegas (DealBook)
Just outside the grand ballroom at the Bellagio hotel early Wednesday morning, Anthony Scaramucci, the backslapping host of the country’s largest hedge fund conference, spotted Gregory J. Fleming, president of Morgan Stanley Investment Management and one of Mr. Scaramucci’s most important business relationships. “Is your kid still in town? Does he want to meet Train?” Mr. Scaramucci asked, referring to the adult-contemporary rock band performing at the event.

Big Banks Push Back Against Tighter Rules (WSJ)
FYI

Earnings Not Yet a Viral Sensation (WSJ)
On April 2, the SEC announced that companies “can use social media outlets like Facebook and Twitter to announce key information…so long as investors have been alerted about which social media will be used to disseminate such information.” Since then, only about a dozen firms have said they might break news on Facebook, Twitter and the like. And few of those companies make much noise online. A Facebook spokesman said the company plans to “disseminate information as broadly as possible, and that will include using Facebook.” He wouldn’t say when that would begin or if Facebook will ever use its own site as the primary place to report earnings.

CIA’s New Chief Spy Outed on Twitter (Gawker)
The day after it was announced that the interim head of the CIA’s National Clandestine Service had been passed over for the full time position because of her connections to the agency’s controversial interrogation program, her successor was reportedly outed on Twitter by former Washington Post assistant editor John Dinges and then confirmed by veteran intellegence reporter Jeff Stein.

Berlusconi loses appeal in tax fraud case (FT)
Silvio Berlusconi, former prime minister and billionaire media mogul, has lost his appeal against a four-year jail sentence imposed last October for alleged tax fraud involving his Mediaset company. Although Mr Berlusconi can make a second and final appeal, during which time the case may expire under the statute of limitations, the verdict reached by a Milan court on Wednesday evening could lead to friction within Italy’s new coalition government.
Read more »

  • 08 May 2013 at 6:40 PM

Write-Offs: 05.08.13

$$$ Freddie Posts $4.6 Billion Profit [WSJ]

$$$ Goldman Said to Earn $500 Million Arranging Malaysia Bond [Bloomberg]

$$$ Small Firm Could Turn the Vote on Dimon [NYT]

$$$ Big Funds Undecided On Dimon [WSJ]

$$$ Jet Chef [Cincinnati Magazine]

$$$ Police hunt woman dressed as the Incredible Hulk over alleged attack outside McDonald’s [DM] Read more »

A whole bunch of mini Moynihans are said to have left the building. Read more »

These are frothy, giddy times at Third Point. Read more »

Being called to testify before the U.S. Congress did little to help him lure clients, said Tilden Park Capital Management CIO Josh Birnbaum, whose hedge fund nonetheless managed to top the industry in 2012. Asked whether his testimony regarding his role in then-employer Goldman Sachs’s $3.7 billion windfall in betting against the subprime housing market had hurt his business, Birnbaum said, “Without a doubt.” “You go back to that period in 2010, when we were just getting our firm rolling, and nothing stops the momentum of a hedge fund like appearing in front of Congress, so there’s no question that that slowed us down,” he said on “Fast Money.” [CNBC]