Clusterfucks

  • 01 Oct 2008 at 2:31 PM

As Predicted: UK Lehman Employees Totally Screwed

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You have to wonder if the 750 Lehman employees just canned would have gotten anything at all but for the UK law that mandates Lehman to pay them GBP 800. As for the rest?

“They’ve been told they will get their pay for the last month and they take their place with all other unsecured creditors,” said Ronnie Fox, London-based partner with Fox Lawyers, whose firm has received several calls from former Lehman professionals.

To us that sounds like a lot of words to say “fat chance.”
That sneaky last minute wire transfer right before the holding company’s bankruptcy filing is looking meaner and meaner.
Lehman’s Fired Staff Get 800 Pounds, Bonus Doubtful [Bloomberg]

  • 01 Oct 2008 at 10:24 AM

Who Is Running The Show?

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rockbrock.jpgWe are all for simple explanations to complex financial problems. Given this, what prerequisite for a major regulatory position in finance could be more gratifying than the ability to explain complex monetary policy issues to children? And given this, who could be more qualified than Sheila C. Bair, Chairman of the Federal Depository Insurance Corporation, and, more importantly, author of Five Star Amazon Review award winner “Rock, Brock and the Savings Shock?” (For ages: 8-12. Hurry! Supplies are limited and Amazon only has 2 left in stock!)
Try as I might, I couldn’t possibly do the work more justice than this Amazon review:

Rock is a spender and Brock is a saver. Their grandfather hires them to do chores and then encourages them to save by matching the total amount of money that they have accumulated from their pay each week. Brock manages to amass $512 in 10 weeks, while Rock spends his money as soon as he earns it, purchasing a fanciful array of toys, gum, and yard-sale items, all of which are comically depicted in the bright cartoon illustrations. Ultimately, Brock uses his proceeds to buy a fancy telescope and some gifts for family members, generously putting his remaining $50 dollars into a joint savings account that he shares with his brother. Evidently Rock learned his lesson as the tale ends with the twins in their old age as millionaires. A section entitled Do the Math contains charts showing the cash accumulation and what would have happened if Brock had spent some money during the 10 weeks. An explanation of compound interest and advice about saving are included. While the rhyming text has some awkward passages, this picture book is a good way to examine the issue of saving vs. spending.

We would be remiss if we failed to mention that this masterpiece ranks #6 in the Amazon “Twins” category behind #2: “How to teach filthy rich girls” (I own three copies) and #3 “The Ironwood Tree.”
I am looking forward to the chapter on dealing with an abrupt 2150% increase in claim liabilities by depository insurance companies.

  • 30 Sep 2008 at 4:12 PM

Kicking It With The FASB

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A review of “fair value” accounting promises to be a long, painful procedure that not only carries with it the possibility of severe and potentially deadly infection, but entails a long recovery time and is likely to reveal any number of other tumors and growths that threaten to be a bigger deal than the original concern.
Accounting pathologists that we are, our attention has been rapt.
Take a seat in the visitors observation lounge. We’re going in.

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  • 30 Sep 2008 at 2:30 PM

Short Race To The Bottom

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Yeah, it figures. Taiwan has banned short selling in equities. Period.
The brilliant and original move is aimed at “preventing short-sellers from depressing the market and [at] boosting investor confidence….”
Taiwan, I believe I may have detected the flaw in your plan.
Taiwan bans short-selling on shares of any company [Reuters]

  • 30 Sep 2008 at 7:15 AM

Buttcrack of Dawn: The DealBreaker Unattributed Photo Hour

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Presented without comment. (After the jump).

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  • 29 Sep 2008 at 11:19 AM

When Is “Price Discovery” Not Price Discovery?

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Hidden in the middle of a Wall Street Journal article on vulture investors is a small observation that suggests, perhaps unwittingly, that the Treasury might be on the eve of complicity in one of the largest cases of accounting fraud in recent memory.

Other opportunistic investors, though, say they likely will stick to the sidelines for now. They are skeptical that the government’s purchase of distressed assets will accurately establish what they are worth. So far, there have been few transactions, despite the desperation of banks to sell, because of disagreements over pricing. (Emphasis ours).

If the Treasury buys assets at inflated prices and that permits banks to mark-to-the-Treasury-model, well… you get the idea.

Vulture Funds Plan to Buy Assets Ahead of Bailout

  • 26 Sep 2008 at 4:19 PM

Washitty?

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Wachovia Begins Early Deal Talks With Citi [Dealbook]