The chief risk officer who was brought in to install risk management systems at MF Global after a rogue trading incident in February 2008 is expected to tell Congress Thursday he outlined his concerns about European sovereign debt trades in the fall of 2010…At the hearing, Michael Roseman is expected to say he “expressed my growing concerns with regard to the potential capital risk associated with the growing positions and began to express caution on the growing liquidity risk,” according to a copy of the testimony reviewed by The Wall Street Journal. In mid-September, Roseman told MF Global’s chief executive, Jon Corzine, that he would consult the firm’s board of directors on requests to increase limits on the European trades. According to his written testimony, Roseman is expected to say that by late October of 2010, the positions were approaching $3.5 billion to $4 billion. After discussing his concerns with Corzine and others, the risk scenarios he presented “were challenged as being implausible.” Roseman’s testimony doesn’t specify who aside from Corzine and the board he told of his concerns. [FINS]
hearings
MF Global Chief Risk Officer To Recount The Time Corzine Brusquely Told Him His Risk Models Didn’t Work In “The Real World”
By Bess Levin
As you may have heard, a man attempted to hit Rupert Murdoch in the face with a pie during his hearing before Parliament this morning. It’s unclear what sort of cream the pastry contained (custard, whipped, shaving, man, cow), but apparently some of it “spattered Murdoch,” and the proceedings were adjourned for 10 minutes. The pie-thrower was immediately taken into custody, which probably came as relief as it meant that Rupert’s wife Wendi couldn’t finish him off. Continue reading »
And also that he thinks he’s too good to read his prepared testimony? And finally, am I the only one getting a serious, “love child of Jon Lovitz and Jimmy Cayne” vibe? (Previously I though it was just “spawn of JoLo…but there’s definitely seeds of JC in there.)
Live-Blogging Cruel And Unusual Punishment: Cayne Dragged Before Meaningless Hearing On Second Favorite Day Of The Year
By Bess Levin
12:10 Sure, it would’ve been worse to do it on 4/20 but Cinco de Mayo? Still pretty mean.
12:12 This thing is set to get underway in a few minutes. While we wait, I have a ton of items on the “wish-list” but beyond the obvious, I really, really want him to act like a stoned 17 year old who just got busted. “I know my rights, man.” “I’ve read the constitution.”
12:20 LET’S DO THIS. Reading of the prepared statements. Incredibly, CNBC thinks interviewing the CEO of Nike is more important than Big Jim, so you can follow along here.
12:30: Alan Schwartz maintains that Bear was awash– nay, drowning– in liquidity days before it went down for the dirt nap.
12:32: Jim concedes, “in retrospect, in hindsight, leverage was a bit too high.”
12:41: Angelides: Could you have done anything to prevent that weekend in March?
Cayne: Nothing. There was nothing that could have been done. We were taken down by hedge funds. Bear Stearns [and these words seriously just exited JC's mouth] “was a big fat goose walking down the lane that’s about to be eaten up by competitors.”
Angelides: You were in Detroit that weekend, right? At a bridge tournament?
Cayne: That’s correct. Continue reading »
This is the one we’ve been waiting for.
James Cayne and Alan Schwartz, who served as chief executive officers at Bear Stearns before the firm collapsed in 2008, will testify on May 5 along with former Securities and Exchange Commission Chairman Christopher Cox, the commission said today in an e-mail statement.
Since recent events have demonstrated the government’s inability to ask the right questions, and we want to actually get something out of this thing, let’s come up with a few now to send their way. I’ll start: Mr. Cayne. When confronted about the fact that your office smelled like pot, you attributed the scent of marijuana to “a new leather couch in my office,” and later demanded a fellow executive come take a whiff, asking him, and I quote, “does the couch smell like pot or not?” Did you realize at the time just how genius that was or, in a rare moment of self-awareness combined with a seriously paranoid trip,* did you sweat bullets figuring no one would buy it?
Geithner, Bear Stearns Executives to Testify for Crisis Panel [Bloomberg via DI]
*That’s the last time you buy from a degenerate first year in the alley behind 383 Madison.
* 9:45: Fifteen minutes to go. Disappointingly, His Fantabulousness and Lloyd Blankfein are on separate panels, meaning no opportunity for potential backhands to the face. No matter. There’s gonna be a showdown. So while we wait:
[I have it on good authority that Lloyd and Lucas have rehearsed the above moves and will be performing them at intermission.]
* 9:57: The “Pink Ladies” have traded in their standard uniforms for prison garb. Good one, ladies.
* 10:03: Carl Levin (NO RELATION) is telling us why we’re here. Goldman Sachs took advantage of its clients, yada, yada, yada.
* 10:04: That’s right, cameraman, focus on The Fab (who’s grown his hair a little longer and is looking kind of hot).
* 10:09: Carl: “Goldman Sachs treats clients like objects (of profit).” Jackie Treehorn, a former prop trader, was the first to pioneer this model at the firm.
* 10:16: Goldman made money off its shorts. Dun Dun Dun.
* 10:26: Apparently Goldman didn’t just hurt its clients, it hurt everyone in the world. Take a moment right now to show us on the doll where Goldman touched you.
* 10:28: Going to interrupt Carl for a moment to announce that Melissa Francis gave birth last night to her second son (with husband Wray). The kid’s name is Greyson Alexander Thorn. May he grow up to be a Goldman banker.
* 10:32: Senator Susan Collins: I’m very discreet…but I will haunt your dreams.
* 10:38: According to Suzy, we’re not here to celebrate the fact that Goldman Sachs made some money during the crisis. Which means I’ve made a terrible mistake. Reader poll: cancel the stripper cake, even though she’s already inside? Or just say fuck it? Why should this lady get to say what’s what?
* 10:40: Senator Claire McCaskill is just going to throw words out there, arrange them in any way you like: bets, odds, bookies, tranches, waterfalls, golden showers, clown-facing, pit bosses, Las Vegas, street gamblers, KGB.
* 10:44: SENATOR MARK PRYOR: “I MAY NOT UNDERSTAND EVERYTHING ABOUT EVERYTHING ON WALL STREET.” Continue reading »
Fabrice Tourre: “I deny — categorically — the SEC’s allegation. And I will defend myself in court against this false claim.”
By Bess Levin
Here’s what Mr. Fantabulous is going to say in about an hour. Imagine this read with what one hopes is (fingers-crossed) a thick accent and an general attitude of “Let’s make zees quick, I have a match to be at by noon. Idiots.” Continue reading »
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