Geithner Looks To Announce New Plan Today (Bloomberg)
The new hybrid public/private plan is set to be announced today - the target is somewhere between $500B and $1T of assets. At this point I think it would be completely unreasonable for the government to ask any of the shops to trust them; if the plan is to work I think the best they could offer would be incentives to purchase (instead of direct/backed capital).
That said, there's always an idiot in the crowd. I'm worried about the long term affects of bad managers stepping up to the plate on this one, though - if their interaction with the government goes bad (and or they draw public ire) this could lead to further regulation of the hedge fund industry "in the name of the public good."
My Plan for Bad Bank Assets, By Timothy Geithner (WSJ)
"We cannot solve this crisis without making it possible for investors to take risks. While this crisis was caused by banks taking too much risk, the danger now is that they will take too little. In working with Congress to put in place strong conditions to prevent misuse of taxpayer assistance, we need to be very careful not to discourage those investments the economy needs to recover from recession. The rule of law gives responsible entrepreneurs and investors the confidence to invest and create jobs in our nation. Our nation's commitment to pursue economic policies that promote confidence and stability dates back to the very first secretary of the Treasury, Alexander Hamilton, who first made it clear that when our government gives its word we mean it."
US Attorney mistakes 419 letter for a submission from a Madoff victim (Boing Boing)
AIG Faces Long Term Credibility Issues (Bloomberg)
You can't so thoroughly stomp the shit out of a company and expect it to spin off and sell its subsidiaries (or a product of any sort) - the actions of the past couple of weeks have all but guaranteed AIG will never be able to pay back the enormous sum of money it owes.
"Mouat said he is seeking to convince commercial clients that the unit providing property and liability coverage that he oversees in Southeast Asia is separate from the problems at AIG. The firm's business in the region is "still exceptionally profitable" after revenue of $1.3 billion in 2008, he said."
Also, they're taking the AIG name off the building:
Hedge Fund Investors Hire Private Eyes (Bloomberg)
"Firms like Shain's say they are seeing an increase in requests for background checks on fund managers in the wake of high-profile fraud cases against Bernard Madoff in New York, Florida's Arthur Nadel and R. Allen Stanford and his Antigua- based bank. In all, the men are accused of cheating clients out of as much as $73 billion.
"Investors are being more careful in checking out where they put their money," said Pete Turecek, a senior managing director overseeing hedge funds at Kroll Inc., a risk-consulting company in New York "As the economy continues to weaken, some people including money managers may be drawn to taking shortcuts.""
Unemployed? Start a Fund (Reuters)
"The number of Asian hedge funds could increase by 10 percent this year as more unemployed bankers and traders launch new funds and the cost of doing business slumps, an industry expert said on Monday.
"It's much better to be a small hedge fund manager than an unemployed investment banker," Peter Douglas, founder of hedge fund consultancy GFIA told the Reuters Private Equity and Hedge Funds Summit in Singapore."
Abu Dhabi Firm Buys 9.1% Of Daimler (WSJ)
"Daimler AG, the owner of Mercedes-Benz, will cede a 9.1% stake to an Abu Dhabi investment firm in a move that shores up its balance sheet and tamps down fear that activist shareholders could push for a strategic shift.
The deal, worth $2.65 billion to Daimler, will set Aabar Investments PJSC as the largest single stakeholder in the Stuttgart-based auto maker, raising the amount of Middle Eastern ownership of the company significantly. When the deal was announced Sunday, Kuwait was the company's largest shareholder, with a stake of about 7.6%."
Bond Offerings This Week (NYT)
"State of California, $4 billion of various purpose general obligation bonds. Merrill Lynch."
CNBC Still Trusts Cramer, All Is Well (NYT)
At some point you kind of have to feel sorry for Cramer - he didn't start this.
"Jim Cramer's personal brand -- not to mention that of CNBC's, his employer -- has taken a beating in the last month. But CNBC still trusts him."