Here’s the text of the FOMC statement
Tags: Credit Crunch, Fed, Interest Rates
Archive for April, 2008
Fed Decision: 25 basis point cut on both the Fed Funds and Discount Rate
On April - 30 - 2008
The credit crunch is hitting the Hamptons as prices fall
On April - 30 - 2008
Itching to buy a spread in the Hamptons? Prices are dropping….
The median price declined 7.1 percent to
$882,500 and the number of sales dipped 29 percent from the last three months of
2007, according to a survey by appraisal firm Miller Samuel Inc. for New
York-based Prudential Douglas Elliman Real Estate. Part- time Hamptons residents
include Lazard Ltd. Chief Executive Officer Bruce Wasserstein and comedian Jerry
Seinfeld.“There’s caution because of more potential
layoffs in the future, so people are taking longer to make buying decisions,”
Miller Samuel CEO Jonathan Miller said in an interview. “We’re seeing a sharp
drop in sales transactions, which are likely influenced by the problems on Wall
Street.”
Tags: Credit Crunch, Hamptons, Real Estate
Lehman CFO Erin Callan is moving into 15 CPW
On April - 30 - 2008
Welcome wagon alert: Erin Callan, Lehman Brothers’ CFO, is moving into 15 CPW according to the NY Observer, recently having shelled out $6.5 million for a condo on the 31st floor. She’ll join fancy neighbors Dan Loeb, Sandy Weill, Lloyd Blankfein, and Danny Och as well as some of her compatriots from Lehman Brothers…
She will have plenty of colleagues in the
building. The co-chief of Lehman Real Estate Partners Raymond Mikulich bought a
$17.9 million apartment on the 15th floor; Arthur Estey and his wife Evelyne
have a $16.9 million four-bedroom unit on the seventh floor (one of the largest
non-penthouse units at 15 CPW); and the head of European fixed-income sales at
the UK office, David Bizer, has a $5 million apartment on the 4th floor.Though Ms. Callan brings the total number Lehman folks at 15 CPW to four, they
are still lagging behind Goldman Sachs with at least 7 bankers who’ve bought
in the buildings. A few more from each bank and they might have enough people to
form rival softball teams—co-ed of course.15 CPW Alert! Lehman Lady Lands $6.5 M.Pad – NY Observer
Tags: Lehman Brothers, Real Estate
Uncategorized
Forbes Profile: Passport Capital’s John Burbank
On April - 30 - 2008
One of the big sub-prime winners last year was Passport Capital’s John Burbank. He’s profiled in Forbes…..
When housing began to melt down last
summer, the value of Burbank’s short positions and swaps soared. Investors in
his flagship hedge fund, $2.5 billion (assets) Passport Global Strategy, ended
2007 up 219%, even after his 1.5% management fee and 20% cut of profits.
Passport also runs three smaller funds, with total assets of $1 billion, that
own slices of what Global does in basic materials, oil rigs and India. They
ended last year up between 64% and 134% after fees. All this earned Burbank an
estimated $370 million, ranking him No. 17 on FORBES’ list of Wall Street’s
Highest Earners"There’s no way you can make 30%
returns being long the S&P 500," the scruffy 44-year-old says of his
swing-for-the-fences investing style. "If you’re going to hit that kind of
return, you have to go places where it can happen.""To invest with John you have to put
your seat belt on," says Timothy Schilt of Berens Capital Management, a
fund of hedge funds that is invested in Passport.
Tags: Hedge funds, John Burbank, Passport Capital
RIP: LSD inventor dies at 102
On April - 30 - 2008
What a long strange trip….
Albert Hofmann, the pioneering Swiss
chemist and advocate of psychedelics who discovered the hallucinogenic
properties of LSD, died Tuesday. He was 102.
Hofmann reportedly died of a heart attack at his home in Basel, Switzerland.
Hofmann’s most famous discovery happened on April 16, 1943. He was researching
the synthesis of a lysergic acid compound, LSD-25, when he inadvertently
absorbed a bit through his fingertips. Intrigued by the effect it had on his
perception, Hofmann decided further exploration was warranted. Three days later,
on April 19, he ingested 250 milligrams of LSD, embarking on the first
full-fledged acid trip. That day became known among LSD fans as "bicycle
day" because Hofmann began experiencing the drug’s intense effects on his
bicycle trip home from the lab.
LSD Inventor Albert Hofmann Dead at Age 102 – Wired Blog
Uncategorized
- Citigroup to sell $3 bln in stock; shares fall
- Goldman’s China Partner Makes First Private Equity Investment
- Time Warner Says Profit Fell, Will Split Off Cable
- Microsoft’s Next Move on Yahoo is Imminent
- SAP Posts 22% Profit Drop, Missing Analyst Estimates
- Alcatel-Lucent Posts Loss, Forecasts 2008 Sales Drop
- GM Reports Preliminary First Quarter 2008 Financial Results
- Macy’s doesn’t expect big impact from rebate checks
- NYC calorie-count rule effective immediately: court
- Rockefellers to demand Exxon shake-up
- Fed’s Bailout Is Questioned by Ex-Staffer
- S&P delivers blow to CDOs
- Pimco Will Trade Credit-Default Swaps in Asia Fund
Contrarian Capital sued by former portfolio manager who claims that his pay and bonus were withheld
On April - 29 - 2008
Did Jon Bauer and his $4 billion Contrarian Capital "arbitrarily" withhold a former portfolio manager’s regular pay as well as his bonus while he was away on leave tending his son who was battling inoperable cancer? That’s what Stephen Czech, employed by Bauer for around five years, is claiming in a lawsuit filed against Contrarian in state court in Stamford:
Stephen Czech claims that Jonathan Bauer,
who runs the roughly $4 billion Contrarian Capital Management in Greenwich,
Conn., is withholding Czech’s regular base pay and bonus
"arbitrarily," according to a lawsuit filed in state court in
Stamford.The teeth of the complaint centers on an
approved personal leave of absence that Czech had taken from Jan. 6 to Feb. 16
to seek medical attention for his 11-year-old son, who had been diagnosed with
an inoperable brain tumor.
Tags: Bonuses, Compensation, Hedge funds, Lawsuit
Citigroup’s hedge fund headaches: two blowups, low returns and redemptions at another
On April - 29 - 2008
So much for Citigroup’s move into hedge funds. Two of its funds, Falcon and ASTA/MAT, have blown up, down 75% or more. Citi is offering to at least partially bail out investors in one and possibly both of the two funds, in exchange for promising they won’t sue. (The investment was billed as low risk, but that’s not exactly how it turned out.)
And it’s lucky for Vikram Pandit that he sold his hedge fund, Old Lane, to Citi at around the market top. That fund isn’t doing so well either, plagued by low returns and investor redemptions. Earlier this month Citi wrote down that unit’s value by $202 million. Oops….
When Citigroup Inc. was launching a pair of
hedge funds last year, it didn’t have to look far for investors. Brokers at the
firm’s Smith Barney unit drummed up hundreds of millions of dollars from retail
clients, including some who were told the fixed-income funds were a safe place
to stash money.Since then, the hedge funds, devastated by
the credit crunch, have plunged by 75% or more in value. After weeks of internal
debate involving Sallie Krawcheck, the global wealth-management head, Citigroup
is offering to cover some of the losses. An investor who put $500,000 into one
of the hedge funds filed a federal lawsuit against Citigroup earlier this month.
Tags: Citigroup, Hedge funds
JP Morgan could swallow Bear Stearns by May 29
On April - 29 - 2008
JP Morgan’s firesale purchase of Bear Stearns could be completed "within hours" of the May 29 vote according to Reuters sources….
Tags: Bear Stearns, JPM Chase, M&A
Uncategorized
- Deutsche Bank Says It Had First Loss in Five Years
- Opec says oil could hit $200
- Buffett Makes His Selection
- Saudis to launch $5.3bn sovereign fund
- Rice Drops as U.S. Crop Sowing Accelerates, Easing Supply Risk
- RadioShack Falls After Profit Drops on Wireless Sales
- Eurotunnel to tap investors in €900m rights issue
- GM to Reduce 2008 Production by 138,000 Pickups, SUVs
- Strapped Airlines Seen Pushing Fares Higher
- Blockbuster Is in Talks on Taking Stake in Viacom-Led TV Channel
- Back from Harvard, El-Erian to manage fund for Pimco
- Khosla’s Strategic Value to Wind Down $600 Million Debt Fund
- Blackstone launches European property fund
- Morgan Stanley’s Roach Says China Must Raise Rates Immediately
- US smaller banks under funding pressure
Tags: Banks, Blackstone, China, Credit Crunch, Hedge funds, Morgan Stanley
The perks keep getting eliminated at Goldman Sachs
On April - 28 - 2008
First there were reports that bottled water and soft drinks were no longer free to Goldman Sachs employees. Now we hear they’re twisting the screws even further to slash costs. You’re gonna have to work longer to get that freebie meal and cab ride home, at least if you’re in the UK. The Times of London reports:
A spokesman said: “When times get tough,
any prudent company more aggressively manages expenses.”In London, at the bank’s European headquarters on Fleet Street, Goldman
circulated a memo entitled Policy Changes – Evening Meals and Taxis, in which it
bemoaned the significant cost of providing free meals for staff who were still
working in the office after 9pm. Goldman has made the service unavailable before
10pm, along with the free black cabs home.
Those little perks and freebies are squeezed by credit crunch – The Times of London
The fall of the ultimate alpha female: How Zoe “Cruz Missile” Cruz’s career with Morgan Stanley went *SPLAT*
On April - 28 - 2008
This week’s fascinating New York Magazine cover story chronicles the rise and fall of former John Mack protege (and for a short time his first choice as his successor) Zoe Cruz. With a focus on why no women have made it to the top of a Wall Street firm, it’s an excellent read highlighting her relationship with Mack and others within Morgan Stanley — many of whome she rubbed the wrong way — like Vikram Pandit, now the CEO of Citigroup, especially during the hostilities surrounding the ouster of former CEO Phil Purcell and ultimate return to the firm of the by-then departed John Mack….
Of all the recent firings on Wall Street,
Cruz’s is the one that’s still vehemently debated. It’s not just because a
top executive was forced to take the fall for her boss, though that does seem to
be the case. The fascination comes from the fact that Cruz is a woman, and that
she had climbed further up the Wall Street food chain than any other woman ever
had. She was fired at a time when women on Wall Street were starting to
wonder—after more than a quarter-century of getting M.B.A.’s and slugging it
out in the firms’ trenches—when one of them was finally going to make it to
the CEO’s office. And she was fired at a time when the first serious female
candidate is running for the presidency and women’s anxieties about competing
in a man’s world are playing out on the national stage. Cruz, of course, would
prefer to be seen as an executive rather than a female executive. But it’s
impossible, at this point, to make the distinction….
Tags: Credit Crunch, John Mack, Morgan Stanley
Carl Icahn is raising money for John McCain
On April - 28 - 2008
Jerome Kerviel has a new gig
On April - 28 - 2008
Former SocGen trader Jerome Kerviel has got a new job with Lemaire Consultants & Associates, a firm that specializes in IT network installation and security. It sounds like a "you scratch my back, I’ll scratch yours" kind of deal between his lawyers and one of the expert witnesses that they regularly use. Accused rogue trader Kerviel needs to be employed to stay out of jail…
Tags: Jerome Kerviel, Legal, Rogue Traders
Good Karma: Alan “Ace” Greenberg is helping out some of the lowest paid Bear Stearns workers with cash gifts
On April - 28 - 2008
As thousands of Bear Stearns workers have gotten or will soon get pink slips as the firm merges with JP Morgan, former CEO Ace Greenberg is giving 25 of the firms lowest paid workers at least a small helping hand. According to the New York Times, he’s giving them a total of $360K – $200 a month over a six year period. Those getting the dough include some from the mailroom as well as clerical employee. Several have physical or mental handicaps. In a letter to the employees, he said:
"This is a personal gift, from me to
you, and with it, I give my personal thanks."
Gift to the Mailroom, From the Boardroom – NY Times
Tags: Alan "Ace" Greenberg, Bear Stearns, JPM Chase, Philanthropy, Revolving Door
Revolving door: Goldman Mortgage chief leaving; JP Morgan offers Bear Fixed Income head $27 million package; Merrill’s Sobotka may leave firm
On April - 28 - 2008
- Goldman Mortgage Chief Sparks to Leave After 19 Years
- JP Morgan offers Bear’s Mayer $27m
- Merrill’s Sobotka Tells Colleagues He May Depart, People Say
Tags: Bear Stearns, Goldman Sachs, JPM Chase, Merrill Lynch, Revolving Door
Wings clipped: EOS Airlines ceases operations and goes into bankruptcy
On April - 28 - 2008
All business class carrier EOS Airlines shuttered operations and filed Chapter 11 as it couldn’t scare up cash to continue operations. It had a deal to raise $50 million, or so it thought, but that fell through last Thursday….
The airline reconfigured Boeing 757s meant
for 220 passengers with 48 seats that could extend into a fully flat bed.
Flights served wine, champagne, cocktails and gourmet foods. There were
individual DVD players, and helicopter rides to the airport were offered to some
travelers.The price for the New York to London flights, which it offered twice a day,
ranged from $3,500 to $9,000 roundtrip.The high-flying luxuries came to an end Sunday as Purchase, N.Y.-based Eos
ceased operations after filing for bankruptcy protection, the latest casualty of
a credit crunch and a money-losing airline industry that has been hit hard by
high fuel prices.
Tags: Airlines, Bankruptcy, Credit Crunch, Toe Tags
- Mars, Buffett Team Up in Wrigley Bid
- HBOS to raise up to £4bn from rights issue
- Citigroup’s Japan Brokerage Unit Posts First Loss in Five Years
- E*Trade CFO Simmons, General Counsel Gelbard Resign
- Calm Before Storm – M’soft, Yahoo Quiet
- Clear Channel Won’t Face Lenders’ Buyout Suit in New York
- Fuel costs lead to yet another fare jump
- Regional carrier open to offers
Time to buy Chinese stocks? Jim Rogers says yes.
On April - 27 - 2008
“All my new money goes to commodities and
China,” said Rogers, who co-founded the Quantum fund with George Soros in the
1970s and correctly predicted the start of the commodities boom in 1999. He
spoke at a seminar in Beijing yesterday.“All the panic looks like a bottom,” he said. “I have bought in the last four
to five weeks. I’ve been buying shares in China for the first time in a long
time.”
Investor Jim Rogers Buys Chinese Shares as Market Hits `Bottom’ – Bloomberg
Tags: China, Commodities, Jim Rogers
Wesley Snipes: Go to jail, go directly to jail….
On April - 25 - 2008
Just hours before his sentencing hearing yesterday for tax evasion, Wesley Snipes surprised federal prosecutors with 3 checks for $5 million made out to Uncle Sam in a last ditch attempt to make sure he wouldn’t have to serve prison time. So much for the grand gesture. The judge saw right through it. Citing a history of contempt, Snipes got slapped with the maximum 3 year sentence for not filing his tax returns for 3 years. His lawyers had naturally asked that he be placed on probation because he’s “not a dangerous man” and has lived an “otherwise lawful life". Naturally, he’s gonna appeal….
Tags: Legal
- Merrill and TPG in talks on closer ties
- Barclays looks at balance sheet options
- Nomura Q4 loss $1.5 bln, hit by credit crunch
- Ambac’s Callen Says AAA Rating `Solid’ Without Selling Shares
- Microsoft brushes off economic worries
- Motorola Posts Wider Loss as Phone Shipments Decline
- Ericsson Surges 27% as Profit, Sales Top Estimates
- Ford Posts $100 Million Profit, Defying Loss Forecast
- Peltz’s Triarc to Buy Wendy’s, Combine It With Arby’s
Ted Forstmann and Top Chef’s Padma Lakshmi are said to be “an item”
On April - 24 - 2008
Page Six reports that Teddy Forstmann may be off the market, at least for now…
WHEN we inquired a few months ago about
rumors of romance between Padma Lakshmi and Teddy Forstmann, we were told it was
just business. The leveraged buyout biggie is the owner of IMG, which reps the
model host of "Top Chef" and ex-wife of Salman Rushdie. Well, business
turned into pleasure, because now the two are an item, sources confirm. The
couple recently hung out with Elton John and Elizabeth Hurley at Evelyn Lauder’s
party to benefit breast-cancer research.Love In Bloom – NY Post Page Six
Tags: Private equity
No more scoring a lap dance (or anything else) at Scores in NYC if the State Liquor Authority has anything to say about it
On April - 24 - 2008
Business coming to a grinding halt: Even though many Wall Streeters aren’t supposed to be going to strip clubs any longer, at least on the company’s dime (most recently, Deutsche Bank), of course, many still find their ways to such establishments (*wink* *wink*) . So there may be more than a tear or two shed with the news that both Scores in NY City are likely to be closed down for good because their liquor licences are getting pulled (and what’s a strip club with out spirits to loosen up the libido and wallet?). It seems that at one of the two clubs — Scores West – hookers have been making themselves at home with the club owners turning a blind eye.
State Liquor Authority officials plan to
put out of business not only Scores West, but also Scores on the East Side, by
yanking the liquor licenses for the jiggle joints, officials said yesterday.
It’s a prospect that could chill the hearts of the mammary meccas’ many famous
frolicking fans – who over the years have included Lindsay Lohan, Kate Moss,
Russell Crowe, Queen Latifah and Jim Carrey.
The problem is that each club’s liquor license carries the names of the same
two club honchos, Elliot Osher and Richard Goldring. Losing the Scores West
license – which was to be physically confiscated last night – makes both Osher
and Goldring "prohibited persons" under state Alcohol Beverage
Control laws.
Tags: Banking Culture, Hookers
