Not just because he’s not Jewish, but also because, according to Dealbook, he’s already got a bitter taste in his mouth. (Which, somewhat surprisingly, has nothing to do with his 5 year ban from the securities industry or Charlie Eregn.) Read more »
Advanced Accounting Philosophy: Americans, Europeans Differ on the Existential Question of Bank LossesBy Jon Shazar
When is a loss a loss? That is the question. Read more »
Actually, Commerzbank is having a bad few months. It turns out that a whole mess of deferred tax-accruals and the hangover from having gone into business in the Ukraine add up to a roughly $1 billion loss for the fourth quarter. Read more »
The past couple of weeks, some might argue, have been the worst of Jamie Dimon’s professional career. Although being fired by Sandy Weill in 1998 was obviously a distressing time in Dimon’s life, a JPMorgan trader’s multi-billion dollar (and counting) loss appears to be even more painful for the CEO, who now has a reputation (and a title: “America’s Least Hated Banker”) to defend. While it’s unlikely that the blunder will cost him his job, every article written questioning Dimon’s judgment, suggesting that he is in fact fallible, and wondering aloud if he is simply a pretty face (that is about to get the regulation it has vociferously argued against rammed down its throat) clearly hurts. So far, Dimon has chosen to frame the situation, at least publicly, as a group fuck-up, one for which the responsibility is shared among himself, The Whale, The Whale’s bosses, and The Whale’s bosses’ bosses. Over the weekend, though, a heretofore unmentioned character, whose actions set in motion the events that served to tarnish JD’s halo, was added to story. And now, Dimon has a place to channel his anger: on a bloodsucking vermin whose days are numbered. Read more »
Citi Clients Not As Understanding As Firm Would’ve Thought About Funds That Lost Them Their Entire Investment, Currently Being Investigated By The SECBy Bess Levin
From 2002 to 2007, Citi raised $2.8 billion from clients to invest in a couple of fund series called MAT Finance LLC, which invested in municipal bonds and was eventually leveraged 8:1 and Falcon, which invested in mortgage debt. Despite the former being marketed as “an attractive alternative to a bond index” and the latter receiving an S&P rating “equivalent to safe, medium-term government bonds,” anyone who bet on the funds lost what might be characterized as “a metric ass-ton of their money.”
For exampe, the funds a team of brokers from Smith Barney put their clients in fell an impressive 80% to 97% from May 2007 to March 2008. Though Citi claims no foul play and offered to cover approximately one-eighth of clients’ losses, the SEC still felt the need to launch an investigation into whether or not the bank’s employees adequately disclosed the funds’ risks and/or mismanaged them. And apparently investors are still pretty miffed about the whole thing, which one broker, Michael Johnston, intuited by the response he got from one when suggesting a sweet buyback deal that would’ve translated to the client only losing 72% and promising not to sue Citi. Read more »
Don’t worry, investors, returns are still a’ poppin’. But I cannot in good conscience not let you know that while your money is safe, for now, it’s very likely that your next letter from Chicago is going to be a tear stained one. He’s putting on a brave face, but Ken Griffin is hurting. We’ve just received word that after paying $11.38 million for two lots at the Four Seasons’ Hualalai resort, for the express purpose of being neighbors with Cher, the singer has up and decided to auction off her property next door.
The Royal Bank of Scotland reported losses of 761 million pounds today, due to a 5.9 billion pound writedown on risky assets. Chief executive officer Fred Goodwin described the bad news as “a chastening experience” that every bank should go through at least once. Soon to be laid off employees? Shareholders? What’s your take on the sitch?
RBS suffers first-ever loss after $11 bln writedown [Reuters]