In a few years the rate of money flow and inflation will start to catch up to each other, eventually sparking a recession, a new analysis from Dick Bove said.» Read More
Any Cornell grads who go work for Goldman Sachs are "a**holes" according to an editor at the Ivy League school's student newspaper, The Cornell Daily Sun . He wants to see Goldman Sachs banned from recruiting on campus.
Tony Manfred, the associate editor at the student newspaper, is obviously borrowing a bit from Matt Taibbi, who famously called Goldman a Vampire Squid.
It must have been a little like when you find a wadded up $20 Bill in the pocket of last year's winter coat: Judge James Peck ordered the sum of $500 million to be returnedto the now bankrupt Lehman Brothers. Which party, exactly, was ordered to return a half billion dollars to Lehman? Bank of America.
The money had been provided by Lehman Brothers to Bank of America as collateral for Lehman checks in August of 2008.
Judge Peck said of the matter: "It is difficult to understand how BofA could have thought that taking the money was the right thing to do without first seeking permission from the court," which is not exactly a very sympathetic reading of Bank of America's failure to return the funds.
Goldman Sachs named 110 new partners, according to an internal memo obtained by Financial News .
Goldman partners, who are officially called Partnership Managing Directors or PMDs, get an increased base salary, the opportunity to invest in Goldman deals, a discount on Goldman stock purchases and a share in the partner compensation pool, among other perks. These latest PMDs join the firm’s existing 375 partners. Goldman names new partners every two years.
Goldman partners typically take around 20 percent of the firm's total compensation pool. That money is divided up between partners according to a secretive "points" system. Basically, each of the partners is assigned a certain number of points by the head of his department. The more points you get, the more you get paid.
My colleague John Carney wrote a piece yesterday about the politics of American monetary policy.
Carney's basic assertion is this: A major sea change—if not an outright reversal—has occurred in the political alignment between left and right on basic issues of inflation, unemployment, and monetary intervention.
He's looking at the issue over a 40+ year time horizon:
"The critics [of tight money] have traditionally been Democrats—such as banking committee chairs Wright Patman in the late 1960s or Henry Gonzalez in the early 1990s."
Carney's piece takes what I believe to be a fascinating tack—and got me thinking about the issues involved in an even more expansive sense.
The vast windows of the room had a terrific view of Central Park at night. It hardly seemed like the time or place to discuss the mortgage repurchase exposure of Citigroup, Bank of America and JP MorganChase.
But somehow the conversation had wandered in that direction.
“Here’s a good number to ponder—$500 million,” the young hedge fund manager said.
“What about $500 million?” I said.
“That’s the amount that Goldman Sachs spent litigating the Abacus deal with the SEC. A single deal gone bad. $500 million to wrangle with the SEC, and another $500 million in fines to settle the case.”
One thing that has long escaped me has been the point of battles over accounting standards. In particular, I don’t understand why regulators get into arguments with the accounting standards boards over mark-to-market accounting.
This morning Sheila Bair, speaking at a SIFMA conference, outlined the objections regulators have to proposals to adopt mark to market—otherwise known as “fair value”—accounting standards for financial instruments. Here’s what Bair said:
A prominent investment banker in New Zealand, recently diagnosed with lung cancer, has started a blog to share his story.
It begins with an opening paragraph that can make you look at life a little differently:
"I have been through an intense health evaluation over the past 3 weeks \(arising from an orthapedic specialist spotting an abnormality in the bone at the base of my thumb which had been giving me a bit of discomfort\). This resulted in my receiving a diagnosis on Friday 29 October that I have lung cancer that has metastasised to other parts of my body \(Stage 4—and there is no Stage5\). That is the bad news."
The lame duck session of Congress that began on Monday will be the last Capitol Hill performance of one long-time deficit hawk, said Senator Judd Gregg of New Hampshire.
There will be plenty for Gregg to tackle in his last few weeks in the Senate: the battle over extending or ending the Bush tax cuts, a fight over earmarks, and attempts to reign in the Federal Reserve. We hit on all of this and more in our conversation.
Rising Tide of Anger at Germany over Bailout Obstructionism (Financial Times) No surprises in the first graf here: Everyone seems to agree on two things: 1) The Germans want bondholders to experience some pain; and 2) the official German explanation for why involves the language of 'systemic' concerns about sustainability: "German officials insist their campaign to get private bondholders to shoulder more bail-out costs is not just about domestic considerations. The government is more concerned that the current system—which condemns well-managed states to bailing out badly managed ones—is unsustainable." Straight forward enough. But graf two is very interesting: "But even some of those well-managed states have expressed anger at German tactics. Countries such as the Netherlands, Finland and Austria, all normally allies of Germany in economic governance issues, have raised questions about Berlin’s behaviour." How inscrutable indeed are those backroom discussions in Farnkfurt!
In a few years the rate of money flow and inflation will start to catch up to each other, causing a recession, analysis from Dick Bove said.
Turney Duff tells the story of his spectacular rise and fall on Wall Street in his book, “The Buy Side.” In this Q&A, he talks about how life is different now — and his biggest regret.
Stock valuations are "not excessive," but they're "not cheap" either, Wells Capital's James Paulsen tells CNBC.