Steven Mandis knows what we’re talking about. Read more »
Luckily, Steve Cohen could count on Goldman to loan him some scratch. Read more »
Back in 2009, hedge fund manager Phil Falcone came up with an idea considered genius only if you take an elastic view of securities laws, which Falcone certainly did (does?). Upon being notified by his personal accountants that he owed the government more than $100 million in state and federal taxes, and turning down the suggestion to borrow against various assets including his Manhattan townhouses, artwork, interest in the Minnesota Wild, and an estate on St. Bart’s, Falcone decided to just borrow the money from a gated investor fund, despite being told in no uncertain terms it was a bad idea by Harbinger’s “longstanding” outside counsel. Investors in that fund turned out not to like the idea very much, with the SEC feeling similarly. But while the regulator felt 5 years (plus an $18 million fine) was enough time for Falcone to really think about what he’d done– a punishment Falcone described as a blessing in disguise–, the New York Department of Financial Services felt otherwise. Read more »
The International Monetary Fund said Thursday that it would continue to finance Greece as long as it is able to complete a review of the cash-strapped country’s finances by the end of July as expected. The statement by the Washington-based multilateral lender came in response to reports that several European central banks were refusing to roll-over loans to Greece, something that could create a shortfall in Greece’s financing. A media report said the IMF had warned European countries that it would cease lending to Greece as early as July if the funding gap wasn’t filled. [WSJ]
The Financial Industry Regulatory Authority accused Washington-based Success Trade Securities and its 45-year-old founder, Fuad Ahmed, of lying to 58 investors — most of them current and former NFL and NBA players — about how he planned to use their money. Ahmed sold $18 million in promissory notes to investors without telling them how he was spending it, including a $1,300-a-month lease for his Range Rover and an $82,000 interest-free loan for his brother, according to a complaint. Finra slapped the securities firm with a temporary cease-and-desist order while it investigates. [NYP]
Remember, back in 2009, when Phil Falcone realized he’d forgotten to set aside enough cash to cover his taxes and came up with the idea to loan himself the money from a gated investor fund? And investors got all bent out of shape about it and the SEC did too? If the former was looking for some sort of an apology and the latter was looking for some show of groveling (in an attempt to avoid paying a fine/having a judge rule he can’t come within 200 feet of a public company), sorry, ’cause Phil’s not sorry. Read more »
One lazy but fun thing to do as a financial blogger is to find two publications saying the opposite thing on the same day, and then be all “haha, dopes.” Business Loans Flood the Market, the Journal informed us this morning, while Bloomberg tells us that by another measure loans are at a five-year low, though being Bloomberg the way they put it is JPMorgan Leads U.S. Banks Lending Least of Deposits in 5 Years. So is there a flood of loans, or a least of loans? Which is it, guys?
Well, both, obviously; “haha, dopes” would not be fair here. Loans are up, relative to the last couple of years, but loans as a percentage of deposits are at a low – 84% for the top 8 commercial banks, per Bloomberg, as opposed to 101% in 2007. Bloomberg acknowledges this tension:
Falling ratios don’t mean banks have shut the lending spigots. Measured in dollars, total loans rose in the fourth quarter for the biggest eight lenders to $3.9 trillion.
As does the Journal, which notes that “The push comes at a time when many banks have been flooded with deposits as slow economic growth and low interest rates crimp investment.”
The way I think about banks is that they do two somewhat separate things, which are:
- satisfy some people’s demand for money claims (short-term, safe, exchangeable-for-fixed-amount-of-cash bank liabilities),1 and
- satisfy other people’s demand for loans.
It’s not entirely obvious why those things would move in lockstep: Read more »