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Investment Bank Group Head: Do You Want To Be A Wolf That Starves In The Winter Or Wolf That Eats His Competitors' Fee Pies For Lunch?

Your call. From: [redacted] Sent: March 28, 2012 9:12 AM Subject: Spring Ahead For those with direct/indirect coverage responsibilities, pls take out your lists today to remind yourselves who we have money out to and that your name is on the ComCom coverage team that got that money approved. Anecdotal observation I conclude is that where we pay attention in some reasonable, non-trivial ways (meeting, meal, call, insightful email), we get paid back in flow DCM capital markets participation It's just how this game works, the money doesn't flat out speak for us, we need to speak for it, and we don't have to stomp/yell, just be around, consistently the more frequency, the more client comfort, the more they feel reminded of their commercial obligations to us, the easier it is for them to remember to take care of us -- lubricate to prevent rust, just like a motor engine or morning exercise We've been printing something almost every week this spring, keep the momentum while it's here, and make it grow so it lasts into trough times If you think this message is meant for someone else, it's probably for you too, it is for us all, so don't look sideways for some sort of peer-level comfort, look to your career, which is your clients Junior bankers pushing cogent observations up are as important as senior bankers pushing that stimulus out to clients -- make your time matter most, you own it the world is still an uncertain place, which means our individual and collective ability to create opportunity and make a personal impact is here and now Various of us have teamed up very well on multiple and diverse endeavors within this 2012 Budget year to close out Tier 1, and then re-populate it, so it matters for our Fiscal 2012 In doing so, we have become a Burden to our competitors and a Benefit to our clients, as it should be Those recently Burdened by our direct sharp edge into their fee pie and who would otherwise prefer that we be unmotivated, disorganized, lazy-minded, subservient and acquiescent include: [list of every large bank] With no due respect to their no longer deserved incumbency, I like being where we are, doing what we're doing, and how we're doing it, working and Winning, without the Charlie Sheen meltdowns along the way Welcome to Top 10 there's more food on those complacent plates, they're distracted by entitlement, not watching the table, it's time for the hungry to eat We Hunt and We Gather, sometimes alone, sometimes together both strategies work, and have since mankind became sentient Wherever your personal preferences and natural tendencies may lead you, rise above that and evolve to a more meaningful Hunter/Gatherer contributor to this increasingly productive tribe -- the bigger payout kills require larger organized squads -- wolves hunt in packs for a reason, and every pack needs it's field leader to be best organized -- it's the time-tested proven best use of a wolf pack's collective energy -- if they waste it, they starve in winter -- we're graduating to wolf pack status, it's got our competitors looking, watching, wondering -- for those who've never operated within a wolf pack, come aboard and enjoy the living/learning-by-doing experience!
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Think about it.

From: [redacted]
Sent: March 28, 2012 9:12 AM
To: Team
Subject: Spring Ahead

For those with direct/indirect coverage responsibilities, pls take out your lists today to remind yourselves who we have money out to and that your name is on the ComCom coverage team that got that money approved. Anecdotal observation I conclude is that where we pay attention in some reasonable, non-trivial ways (meeting, meal, call, insightful email), we get paid back in flow DCM capital markets participation

It's just how this game works, the money doesn't flat out speak for us, we need to speak for it, and we don't have to stomp/yell, just be around, consistently the more frequency, the more client comfort, the more they feel reminded of their commercial obligations to us, the easier it is for them to remember to take care of us -- lubricate to prevent rust, just like a motor engine or morning exercise

We've been printing something almost every week this spring, keep the momentum while it's here, and make it grow so it lasts into trough times

If you think this message is meant for someone else, it's probably for you too, it is for us all, so don't look sideways for some sort of peer-level comfort, look to your career, which is your clients

Junior bankers pushing cogent observations up are as important as senior bankers pushing that stimulus out to clients -- make your time matter most, you own it the world is still an uncertain place, which means our individual and collective ability to create opportunity and make a personal impact is here and now

Various of us have teamed up very well on multiple and diverse endeavors within this 2012 Budget year to close out Tier 1, and then re-populate it, so it matters for our Fiscal 2012

In doing so, we have become a Burden to our competitors and a Benefit to our clients, as it should be

Those recently Burdened by our direct sharp edge into their fee pie and who would otherwise prefer that we be unmotivated, disorganized, lazy-minded, subservient and acquiescent include:

[list of every large bank]

With no due respect to their no longer deserved incumbency, I like being where we are, doing what we're doing, and how we're doing it, working and Winning, without the Charlie Sheen meltdowns along the way

Welcome to Top 10 there's more food on those complacent plates, they're distracted by entitlement, not watching the table, it's time for the hungry to eat

We Hunt and We Gather, sometimes alone, sometimes together both strategies work, and have since mankind became sentient

Wherever your personal preferences and natural tendencies may lead you, rise above that and evolve to a more meaningful Hunter/Gatherer contributor to this increasingly productive tribe -- the bigger payout kills require larger organized squads -- wolves hunt in packs for a reason, and every pack needs it's field leader to be best organized -- it's the time-tested proven best use of a wolf pack's collective energy -- if they waste it, they starve in winter -- we're graduating to wolf pack status, it's got our competitors looking, watching, wondering -- for those who've never operated within a wolf pack, come aboard and enjoy the living/learning-by-doing experience!

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President Of Multi-Billion Dollar Investment Firm Will Fire The Next Degenerate Caught Leaving a Dirty Dish In the Sink Before He Will Hire a Janitor

From: [redacted] Sent: Tuesday, March 27, 2012 4:57 PM To: Office-CT Subject: The end of my rope. Ten days ago I entered the kitchen at 6 pm at the end of the day to find a sink full of dirty dishes. I cleaned them and put them in the dishwasher. Today I just went in the kitchen and again there is a sink full of dirty dishes. Let me make this clear. THERE IS A SIGN OVER THE SINK FOR A REASON…..no one in this office is paid to be your personal janitor. If I catch anyone leaving their dirty dishes in the sink, you will be fired. [redacted] President and Chief Operating Officer Obviously this an amazing story we're going to be following closely. At this time we do have a few questions that need answering and they are: 1) What was the first thought that crossed this guy's mind upon entering the kitchen and seeing the mess yesterday? Was it "These filthy fucking animals"? 2) What level of slop are we talking about here? Was it every available fork and stacks and stacks of plates with disgusting crusted-on grease or was it, like, a water glass and he'd just reached that point where one more dirty dish pushes you over the edge? 3) His boss is a billionaire who might very well think he's paying someone to act as a personal janitor-- if he's one of the culprits will the same vigilante justice and dressing down be served? 4) Has he installed surveillance cameras to monitor the area? On the one hand, this email would suggest that yes, he most certainly has. On the other, though, he sort of sounds like he's so pissed about this shit that he's going to shelve all of his other responsibilities in order to devote himself full time to staking out the kitchen and nailing these lowlifes.

News

What To Do (Or Not Do) Upon Waking Up In A Car "Driving Through A House," Part II

Back in May, we had a frank discussion about drinking with colleagues and/or clients after work. Specifically, how many drinks one should put away in order to have a good time but not cross any unfortunate lines. At the time, we used a young lady named Sophia Anderson as our guide and said that, assuming you have the tolerance of a 21 year-old female and considered being arrested post-Happy Hour for driving your through a stranger's house one of those lines, no more than a dozen beverages should be consumed, with fourteen being the absolute max. Today we have just a quick update, to those for whom it bears mentioning, that if you're going to ignore said guidelines and have that fifteenth cocktail shortly before accepting a ride home from an equally sloshed coworker who confuses someone's front lawn/foyer/kitchen/backyard patio with the road, you should probably not agree to lie to the police and say you were the one driving. Not even if you're secretly in love with him or her; not even if he or she promises to take take you on vacation after all of this blows over; not even if you were passed out the whole ride and a bit disoriented after "[waking] up as the incident occurred and the car drove through the house." The sneaky punk who conned his drunk and coked-up girlfriend into taking the DWI rap for crashing through, and trashing, a Long Island home in his mom’s Mercedes convertible, was finally charged today with the May 28 crash and ordered held without bail. Suffolk DA Tom Spota said Dan Sajewski, 23, tricked Sophia Anderson, 21, into telling cops that she was behind the wheel when he crashed through the Huntington home of a 96-year-old woman – taking a 30-foot tree with him from the front to the back yard. Spota said the incredible demolition derby was the end result of a night of boozing and cocaine snorting at the $1.7 million mansion of Sajewski’s parents in exclusive Lloyd Harbor – when Sajewski and Anderson took a high speed joyride for more beer. ``We know what really happened that day,’’ said Spota at a press conference after the court session. He said the couple, along with three pals, were doing shots of Jack Daniels and snorting coke at Sajewski’s doctor dad’s home until 4 a.m. The crash occurred during a trip for more Heineken beer, while Sajewski was driving, said Spota. He said Anderson was passed out in the passenger seat and ``told us she wakes up as the incident is occurring and they were driving through the house.’’ Spota said Anderson ``was in love with him’’ and agreed to take the rap, after he promised to pay her bail and legal bills – and take her on a vacation. He broke his word and she revealed it was all a lie. The DA said that when an x-ray technician at the hospital told her she could not have been the driver because of her injuries, Anderson told him ``it’s a little too late for that.’’ LI punk held without bail for May 28 crash that destroyed elderly woman's home [NYP via DI] Earlier: Area Drunk Offers Handy How To Guide Re: Not Being Labeled “That Guy (Who Uses The Front Door Of A House As A Garage Door)” At The Office

News

Hardcore Harvard Investment Group Soliciting Student Partners Who Aren't Afraid To Take Some Risks With Their Parents' Money

You're a Harvard undergrad and you want to beef up your resume so that in a couple years, top hedge funds will be begging you to take meetings with them. You figure joining some sort of on-campus investor group might do the trick, but there are so many to choose from it's difficult to figure out which one is going to be your ticket to the big leagues. Except it's not actually that difficult at all. In fact, the answer is quite simple. There are student investment clubs and there is Black Diamond Capital Investors. The former, piddling little after-school programs for, when it comes down to it, amateurs. The latter, an opportunity to put your balls on the table and make some real money. If that sounds like something you'd be interested, please have a check or money order for at least $1,000 ready,* which is the minimum investment members/partners must make, so that management can ensure everyone's got skin in the game. “Black Diamond is all about taking investments to the next level,” said Patrick M. Colangelo ’14, who founded the club last semester. He said that the mandatory minimum investment exists to ensure member engagement in the group, which is limited to 25 participants. "We select experienced finance students who are willing to put up the minimum capital contribution because we seek partners who will be vested in the operations and performance of the fund," Colangelo said. "It really gets the most out of our partners.” Member Arash Alidoust ’13 said he believes the buy-in is critical to the success of Black Diamond, which claims to be Harvard’s largest private growth fund. “It makes you much more concerned and much more innovative,” Alidoust said. “Black Diamond becomes part of your life.” And while the initial outlay be difficult for some college kids to swing, rest assured you're going to make it back many times over. Members said that Black Diamond’s investment strategy differs significantly from that of other financial groups on campus. Like the hedge funds it emulates, Black Diamond is a riskier investment than some of its peer groups, a risk which members hope will be rewarded. Colangelo said that the organization is aiming for a 30 percent return on its investment...“What Black Diamond has been created for is for investors who have a little bit of experience, joining a group of other experienced individuals who really want to do something different,” Colangelo said. Alidoust said that the strength and diversity of Black Diamond’s team of investors allows the club to break out of the typical “framework” of investing. “We encourage innovation and new ideas about investing, rather than just sticking with the old ideas,” he said. Exclusive Investment Club Asks Student Members for $1,000 [Crimson] *Though feel free to invest up to $20,000.

News

BarCap Analyst Identifies Senior Bankers' Failure To Show Up To Good-Bye Party As Being Representative Of "Fundamental Flaw In Group's Culture," Suggests They Shape Up ASAP

From: [redacted] To: BarCap TMT Group Sent: Wednesday, June 27, 2012 12:21 PM All, At last night's event, we were disappointed by the poor representation of senior bankers. We truly appreciate Pat, David and Ranjot for showing up and expressing support and gratitude. However, the fact that only three of 21 senior bankers decided to show up speaks to a fundamental flaw in the culture of our group.

News

John W. Henry & Company To Evict Investors At The End Of The Year

Clients were informed of the turn of events today in a rather terse email that may or may not have concluded, "So that's all, don't let the door hit you on the way out." John W. Henry & Co., a trading firm controlled by the principal owner of baseball's Boston Red Sox, told clients it will stop managing their money amid dwindling assets and slumping returns. "This is to notify you that JWH has determined to cease managing client assets effective December 31, 2012," Amy B. Hanson, a marketing manager of the firm, wrote in an email to clients on Friday. "We will not be providing performance information going forward." John W. Henry said it will continue to do some trading for its own account. The firm, which managed more than $2.5 billion in 2006, today oversees less than $100 million, Mr. Henry said in an email. John W. Henry to Stop Managing Client Money [WSJ]

News

FYI, Whitney Tilson's Investment Thesis On Goldman Sachs Has Not Changed In Light Of Times Op-Ed (Update)

Having said that, T2 Partners will be "monitoring" the situation. The op ed in today’s New York Times by retiring Goldman Sachs Executive Director Greg Smith is the talk of Wall Street. We think we know Goldman well, as the company has been our prime broker for the past seven years and Goldman (both stock and call options) is one of our largest positions, so we wanted to add our comments. Our direct experience as a client of Goldman has been universally positive. The many people we have dealt with there have all been exceptionally talented and high-grade, and never once have we had a negative experience in which we felt that they took advantage of us or didn’t do what they said they would do. That said, we are not naïve. In all of our dealings with Wall Street firms, we assume that they are looking out for their own bottom lines, not ours. And we are certainly aware that the old, gentlemanly culture in which integrity and a customer-first attitude generally prevailed is long gone – not just at Goldman, but across all of Wall Street – and, in fact, across the entire financial industry (the reasons for this and what should be done about it are the subject for another day). When we think about investing in any company – especially a financial one, which is heavily regulated, leveraged, and particularly difficult for an outsider to analyze – we factor into our investment equation our assessment of the company’s culture and values, and, if we have any concerns, what the potential associated risks are, such as unexpected losses and regulatory action. In light of our view of the moral decay across the U.S. financial sector, we aggressively haircut our estimates of intrinsic value in the sector – some companies more so than others. But at some price, of course, any stock is a buy, and last August and September we felt that the negativity surrounding the financial sector was way overdone and hence made a big – and, so far, very profitable – bet on Goldman and a number of other U.S. financial firms. With the run-up in Goldman’s stock – after falling below $90 as recently as December, it’s now over $120, just above tangible book value of $119.72 as of 12/31/11 – we’ve been debating whether to trim or exit our position, so today’s op ed is timely. But is it relevant to our investment thesis? We think probably not, for two reasons: 1) The argument that Goldman has become increasingly profit driven, sometimes at the expense of clients’ best interests, and that some employees use vulgar and disrespectful language is hardly news. What’s the next “shocking” headline: “Prostitution in Vegas!”? 2) We highly doubt that Goldman is as truly corrupt as Smith makes it out to be. Goldman has more than 30,000 employees (including nearly 12,000 vice presidents, of which Mr. Smith is one) and has gone through wrenching changes in the past year, including savage cuts to bonuses and extensive layoffs, so it doesn’t surprise us that there are many disgruntled employees, especially those who are leaving. Is Smith one of them? It’s hard to tell, but here’s an email sent to me this morning by a former partner at Goldman (who generally agrees that the firm’s culture is not what it once was): There are a couple of things out of place. 1) This guy has been at firm for 12 years and is only a VP…a piss ant of sorts. He should have been an MD-light by now, so clearly he has been running in place for some time. 2) He was in U.S. equity derivatives in London…sort of like equities in Dallas…more confirmation he is a lightweight. Somewhere along the line he has had sand kicked in his face…and is not as good as he thinks he is. That happens to a lot of high achievers there. In summary, we think it’s likely that Goldman does the right thing for its clients the vast majority of the time – but not as certainly as it used to in the old days. Times have changed and the trend is unfortunate, but it is not unique to Goldman. In fact, we believe that Goldman still has a better culture and is more ethical than most of its competitors – though this is a very low bar to be sure. Our investment thesis on Goldman is simple: when all the dust settles, it will remain the premier investment banking franchise in the world – and, if so, will be worth a substantial premium to tangible book value. Smith’s column is a warning flag that we’ll be monitoring closely, but we believe our investment thesis remains intact and the stock is still cheap, so we’re not selling.

News

Bernie Madoff Was Just Trying To "Change The Way Money Was Managed," Not That Anyone Cares

For about a year now, Bernie Madoff has been holding court with various members of the press about something that's been plaguing him: the fact that few people if any are willing to give credit where credit is due. Yes, he may have pleaded guilty to a $50 billion crime that ruined countless people's lives, including those of his wife and children, one of whom committed suicide as a result, but he did a lot of other stuff too, like run a "successful business" for which he won lots of "industry awards" during his "legitimate years." And, yet, everyone seems to forget all that when his name comes up, much like they conveniently forgot about how Mussolini made the trains run or time, or how Hitler built those wonderful autobahns, or how Ted Bundy made women feel special. And since he's serving a 150 year sentence, Berns has had lots of time to ponder why his years of legitimate achievements go unmentioned and the one thing he keeps coming back to? Irving Picard, who's pulled a fast one on you all, by suggesting that Bernie's crime started wayyyyy before it did, when, in fact, Madoff Securities was only running a Ponzi scheme for barely even 20 years. Examine the evidence Madoff shared with Forbes contributor Diana B. Henriques via email: Jan. 17, 2011 11:05 A.M. … Also remember that the U.S. Attorney admitted that they had no evidence that the crime started in the 80’s and could establish that Montauk and the N.Y. homes in Ruth’s name were not purchased with tainted funds … Mar. 10, 2011 7:35 A.M. … I would love to know what evidence [Picard] has to date my crime back to 1983 … THE FACT IS THAT THERE IS NONE. 8:05 A.M. … I say once again the fraud started in the 90’s … Mar. 18, 2011 9:26 A.M. … I guess I’m obsessed with this START OF CRIME ISSUE. Don't you see, idiots of the media?! That's the real issue here. Not the crime itself but the start of the crime. Do the math. Oct. 11, 2011 7:20 A.M. ... You can do a back of the envelope calculation as follows. From 1963 I made substantial arbitrage profits for the Picower, Shapiro and Chais families joined by the Levy family in 1970. [M]ost of these profits were re­invested and the amounts compounded. In 1970 Saul Alpern formed his partnerships later [run] by Avellino and Bienes. In 1980 I started trading for [French banker] Albert Igoin and his French and Swiss banking associates. All of these accounts averaged about 20% annually and were involved in various forms of convertible arb using bonds, pfds [preferreds], Rts. [rights] and units. [A]nd ALL WERE LEGITIMATE TRADING. THIS CONTINUED THRU THE EARLY 90’S. Nov. 24, 2011 6:51 P.M. … When you look at my RIDDLE [in the Nov. 23 letter], consider the fact that there was in fact no crime until I did not have enough capital in the firm to cover the losses. There is your real STORY The interesting thing here is not that there was an 11-figure fraud, okay? The interesting thing is how long the 11-figure fraud went on. And it stinks to high hell that that slippery fuck Picard and Co. are claiming it dates back to 1983 and that you're all buying it, hook, line and sinker. Come on, people. They're lawyers. Who are you gonna trust, them or a Ponzi schemer? But don't feel sorry for Bernie. Feel sorry for yourselves, for what could have been and what never was. Near the end of that e-mail the clouds of self-deception close in again, and Madoff turns himself into a pitiful martyr: “I made the tragic mistake of trying to change the way money was managed and was successful at the start, but lost my way after a while and refused to admit that I failed at one point.” HE WAS TRYING TO THE WAY MONEY WAS MANAGED! A legitimate way to make Ponzi scheme payments, before it was tragically snuffed out. Oct. 11, 2011 7:36 A.M. … I will never get over the distortions being presented by everyone as to the poor and now homeless when in fact they all signed documents when opening their accounts that they were sophisticated and had enough wealth to withstand the possible losses of short term trading. I wish I had saved the hundreds of letters I received thanking me for how I was responsible for their happiness over the years and their pleading with me to keep their accounts open when I tried to close them … when I worried about the wreckage I might cause if I couldn’t recover. Is the REAL STORY that the investor agreements specifically authorized BLMIS to make Ponzi scheme payments (a totally legitimate type of securities transaction, a short term trade if you will)? Unless someone pulls their head out of their ass, the world will never know. Exclusive: The Secret Madoff Prison Letters [Forbes]

News

Food Eating Challenge Of The Day: "It's Not Clear What's Going On In His Mind And Body"

As you all are well aware, from time to time we cover food eating challenges around these parts. We don't chronicle all the feats of gastrointestinal fortitude that come our way, though, because while we love you all, not all of your FECs constitute what we'd consider an actual challenge worth covering. As previously discussed, our high bar has everything to do with the first contest we ever wrote about (as a postmortem), which involved a man named Oyster Boy, who consumed 244 oysters in 1 hour at Ulysses, throwing down the gauntlet down for one of you to pick up, vis-à-vis goring yourself for sport. Do we really expect anyone to match OB in magnitude or strength of stomach lining? No, we do not. Having said that, "challenges" such as eating 8 vending machine items in 12 hours (or in an unlimited amount of time!) are not going to cut it. It's not an exact science but we look for FECs that are imaginative, topical, and/or represent a high degree of difficulty. (And while we wouldn't actually advise it, live streaming the whole thing would make our day.) Which brings us to today's challenge. It occurred at an investment bank in midtown and although it loses points for not letting us know ahead of time so that we could chronicle the thing in real time, there are a number of things we like about it. Intern vs. VP. [Redacted] intern's last day (ever?). A dozen donuts each from our friends at DD. 1 hour limit to finish...Intern: larger build, 6'1" and extremely ambitious. VP: fit and 5'8" with a vicious appetite. Identical donut selection includes: - 2 chocolate - 2 glazed - 1 sugar - 2 strawberry frosted - 2 chocolate frosted - 1 blueberry - 1 Oreo crumble - 1 Boston creme VP downed the whole thing in 13:31. Intern disappointingly tapped out shortly after at 9 donuts and a bite. Intern is feeling "terrible," is alternating between a sugar rush and mild depression, and wants to sleep under his desk. It's not clear what's going on in his mind and body. Besides looking very uncomfortable, he's having a hard time responding to questions with any answer besides "I don't know." He's buying drinks for everyone tonight. Obviously there's zero sense of urgency here as a result of getting a recap rather than doing it live. But! Twelve adult-sized donuts (as opposed to a bunch of munchkins)? Good. Thirteen minutes for the whole spread? Good. Pitting a superior against an underling (rather than making a couple of interns race each other)? GOOD. Take these ideas, particularly the last one and run with them. Feel free to come up with your own but at least just consider making founder vs. peasant/30 minutes/2 chocolate fountains each/70-100 items to dip/race to the finish happen.