Earlier this month, the Times reported that Mayor Bloomberg and his advisers had been “floating the possibility of mayoral runs to at least five boldface figures,” including Chuck Schumer, Mort Zuckerman, Ed Rendell, Edward Skyler, and Hillary Clinton. Strangely left off the list? A woman who some might say is actually Hizzoner’s most worthy successor and who conveniently announced her intent to run today: Kristin Davis, the woman who once supplied Eliot Spitzer with hot young tail. Read more »
Asked by newsman Noam Laden to respond about Dupre’s pregnancy with asphalt scion Thomas “TJ” Earle during an appearance on Geraldo Rivera’s WABC radio show yesterday, disgraced ex-Gov. Eliot Spitzer answered: “I just don’t respond to that stuff, except to [say to] anybody who is pregnant, congratulations and good luck. Having kids is the best thing in the world. So whomever it may be, that’s always my attitude.” [NYP via Daily Intel, earlier]
Eliot Spitzer Is Willing To Suspend Judgment Before Determining Whether Or Not The New York Fed Let Barclays Molest Young BoysBy Bess Levin
Maria Bartiromo: Tim Geithner apparently flagged the problem 5 years ago. Why didn’t he do more about this? He basically called the Bank of England and said he was worried about the approach in terms of Libor, that they needed to change it. Did he do enough?
Eliot Spitzer: Look I think it would be preemptory to say one way or the other. This is something that needs an awful lot of examination. I think the fact that he knew in ’07, sent a memo in ’08 is only the first layer of inquiry. Did he follow up on it? Libor, as everyone who watches CNBC knows, is the heart and soul, it is the blood stream of the financial system. If anyone is rigging it or playing games with it then you must follow up. Anybody who is in the regulatory position that Tim Geithner was in, in my view the most important bank regulatory position in the world, how do you not follow up and say wait a minute guys what have you done? So it’s unclear, and I hate to use this metaphor perhaps, but was this the sort of memo that was being sent at Penn State where you just kind of brush it aside or was it really an effort to do something?
MB: Oh god.
ES: This bears an awful lot of inquiry. Because it goes to the very real question of whether the NY Fed did not fulfill its fundamental function to ensure the soundest [and] security of the balance sheets of the banks all the way through the period leading up to the crisis. Is this one piece of evidence that runs contrary to that or one piece of evidence that supports it? We don’t know yet.
MB: What a comparison.
ES: Well let me tell you Maria, unfortunately when you see memos at the top being written like that, you never know, you have to ask the question, what preceded it, what came after it, otherwise you don’t understand the texture of what was being done by that senior person. Read more »
We’ve talked a little before about how I don’t understand Wall Street research. Let’s start slow: why publish research? There are I think three, or three-ish, possibilities:
1. To inform your investing clients (asset managers and such) about your best views on how they should manage their money, so that they can manage their money well and thus one day have more of it,
2a. To induce your investing clients to do trades that generate trading revenues for you,
2b. To induce your investing clients to do trades that optimize your book (i.e. slapping a Buy on whatever you need to sell and vice versa), or
3. To induce banking clients (corporate issuers) to pick you as an underwriter.
So, #1, ha ha ha. Choosing between #2 and #3 is harder and if you wanted to be serious about it you might ask questions like how much revenue does trading bring in versus underwriting (more!), how good is that revenue (market making for pennies using your capital: probably not as good as risk-free 7% IPO gross spreads), and how much does research influence trading (meh?) vs. how much does it influence underwriting (meh?).
This weekend, though, we got kind of a strange data point via this FT article about the JOBS Act and the research settlement. In brief, as we’ve discussed, the JOBS Act lets banks basically do whatever they want for research on “emerging growth” companies, including in particular publish research pre-IPO and have bankers and analysts and the company all in the same room pitching business and generally scheming. But there’s a catch, which is that the ghost of Eliot Spitzer, in the form of the global research settlement, still restricts that activity, so all the banks subject to the settlement (the bulge-bracket ones) are disadvantaged vis-à-vis their smaller cousins. But, the FT points out, the big banks have a trick up their sleeves, which is to make all the small banks sign an agreement preventing them from publishing research ahead of the big banks, as a condition of joining the syndicate for any deal: Read more »
My time in the financial industry entirely postdated the global research settlement, which means that I have a different view of sell-side research from some of the olds. As far as I can make out, there are people who think that investment bank research was once a demonic scheme in which research analysts – larger-than-life figures whose recommendations were irresistible to the retail investors who in this vision bought all of every pre-2003 stock offering – swindled those besotted retail investors into buying crap stocks at inflated prices so that the banks could get gigantic investment banking fees. Whereas I always thought that investment bank research was a sort of cute endeavor of unclear commercial purpose, taken skeptically by the institutional investors who buy most of every post-2003 offering, made fun of by bankers, and conducted by people whom we never saw because, among other things, our network was set up to prevent them from emailing us and vice versa.
Perhaps before the settlement giants roamed the halls of research divisions, defrauding investors with abandon, but once their email was cut off from the bankers’ email they retreated into mousy irrelevance? Unclear. In any case THEY’RE BACK BABY, sort of: Read more »
interesting choice of words
“You know what I would like to see?” Spitzer asked the crowd. “I’d like to see a petition with a hundred million signatures, submitted to the White House tomorrow morning, saying, ‘Give us a treasury secretary who understands reform.’ Bring Paul Volcker in. Bring in Joe Stiglitz. Bring in Paul Krugman. Bring in Robert Reich…Spitzer, who was booted from the network after the program failed to offset a ratings slump, told Capital on his way out the door that he has no plans to embark on another media venture anytime soon. “Right now I’m having loads of fun,” he said. [Capital NY]
Although you know that Eliot Spitzer was slightly preoccupied during his time as New York’s Attorney General, maybe you can understand why William Gilman and Edward McNenney might have thought that he was devoted full-time to bullying them. Gilman and McNenney, formerly executives at insurance broker Marsh & McLennan, have not exactly had positive interactions with the Spitz these past seven years. Let’s go down the list: Read more »
If You Know Any Job Openings In The Field Of Prosecuting Financial Villains, Keep Eliot Spitzer In MindBy Matt Levine
Because he really misses it and thinks he could bring a lot to the table. To help make his case, he sat down today for a little chit-chat with the Observer about what he would be doing to the ratings agencies right now had that whole…you know what it is, we don’t need to say it…not happened:
All you need is a common law fraud concept that people—and you go back to the emails, just as we did in the analyst case—and again, I’m not saying “let’s relive the past” This is a more theoretical matter. Go through the emails, and you would’ve seen—“this isn’t a triple-A, but they’re a good client, and we’re gonna…”—that tension between what ratings were put on a product, and one’s belief or recognition that they may not deserve it. There are many theories about what would be there, but you have to get the evidence, to state the obvious. I don’t want to say “gee, they should’ve been prosecuted.” But there should’ve been greater scrutiny over the years, and the structure has always been problematic. It was next on our hit parade, if I had been there for that.
But he wasn’t just going to prosecute the bad apples – he would have cleaned up the whole system. Again, if there’d only been time: Read more »
Burnett’s show was announced in the same memo in which the bad news was broken that Eliot Spitzer’s foray into television, In The Arena, will be put out to pasture, which could make things around the water cooler slightly awkward (apparently Spitzer hasn’t yet left the building, with network execs trying to find him “an alternative role”). Read more »
On top of all the other stuff- he’s gone and pissed off New York madam Kristin Davis, who Eliot Spitzer can confirm you do not want as an enemy. Read more »