Wall Street Folly

The architect of Goldman Sachs Group Inc.’s controversial 2001 trade with the Greek government is a top executive in the bank’s London office with a yen for yoga and a command of Greek.

Colleagues say 46-year-old Antigone Loudiadis, who has a given name from classical mythology but goes by the nickname “Addy,” was the woman behind the deal.

A complex and long-dated arrangement, the trade she set up allowed Greece to reduce its outstanding debt by converting the debt into euros and then restructuring the debt at more favorable rates. Undertaken privately, it helped mask Greece’s true indebtedness until recently, when the country’s finances fell under deep scrutiny by public markets, critics say…..

The 55-year-old chief executive of Goldman Sachs — three-plus years into his tenure — recently turned to a Texas corporate p.r. firm to buff the image of the tarnished Wall Street powerhouse.

Turning to outside consultants to gauge a firm’s “perception in the marketplace” is unusual for the 140-year-old firm. But that’s what you do, even if you are Masters of the Universe, when the national and international media accuse you of engineering and profiting from a back-door rescue of AIG, of using cash from a taxpayer bailout and cheap Federal Reserve financing to help finance lavish bonuses, and taking down the entire Greek economy.

Blankfein took the step of using the fancy p.r. firm, Public Strategies, sources say, because he feels Goldman has successfully weathered a storm of controversy — by trimming the overall compensation pool to 46 percent of revenue — and must now work to undo the damage…..

Greece’s borrowing needs are covered until mid-March, Greek Prime Minister George Papandreou said in an interview broadcast Sunday.

“As I know, we don’t have at this point a need for borrowing: our borrowing needs are covered until mid-Ma,” he said in an interview with the British Broadcasting Corp.

“What we are saying simply is we need the help so that we can borrow at the same rate as other countries, not at high rates which in fact undermine our possibility for making the changes and cutting down our deficit.”….

Greece arranged swap agreements with about 15 securities firms, including some payments from banks that may have helped hide the country’s true deficit, according to a person with direct knowledge of the contracts.

The swaps that allowed Greece to receive payments upfront date from before 2008, when European Union regulators changed rules to limit the use of the contracts, said the person, who spoke on condition of anonymity. Goldman Sachs Group Inc., which provided Greece with about $1 billion in funding in a 2002 swap, may have arranged the biggest of the contracts, the person said…..

Toyota’s leading U.S. executive boasted to the automaker’s Washington staff last summer that they had saved the company more than $100 million by limited any regulatory action on sudden acceleration to a recall of equipment such as floor mats, according to documents turned over to a key U.S. House committee holding hearings on the issue Wednesday.

In the documents, the deal with the government was listed among “Wins for Toyota” in an internal presentation by Yoshimi Inaba, chairman and CEO of Toyota Motors Sales U.S.A. in Washington last July 6. the company last summer. The documents were obtained by the Free Press on Sunday…..

Arnold Schwarzenegger Says “Worst Is Over” for Recession - Bloomberg

California Governor Arnold Schwarzenegger said he believes “the worst is over” for the U.S. recession and his state is showing “signs of a comeback.”

In California, “we have seen in our revenues that there’s more than a billion dollars a month coming in more than we anticipated,” Schwarzenegger said on ABC’s “This Week” program. “The foreclosure rate has slowed down. We’ve seen that house sales have picked up.”

“But it’s very clear that the comeback is not going to be as quick as we’ve seen in the past,” said Schwarzenegger, whose state had a 12.4 percent unemployment rate in December….

Stephen Hester, the chief executive of Royal Bank of Scotland Group PLC, will become the latest top U.K. bank executive to turn down a bonus for 2009, a person familiar with the matter said, a move that comes amid continuing public and political anger over banker compensation.

Mr. Hester will forgo his bonus in an attempt to deflect public outcry from the bank’s payouts to other staff and executives, which Mr. Hester wants to make sure remain competitive, this person said. Mr. Hester had been set to receive an award of around £1.6 million ($2.5 million), this person. The overall 2009 bonus pool at the struggling bank is set to be £1.3 billion…..

Citigroup Plans Capital Infusion in Indian Unit, PTI Reports - Bloomberg

Citigroup Inc. plans to infuse a “substantial amount” of capital into its Indian banking unit by next month, the Press Trust of India reported, citing an unidentified bank official.

The money will be used to expand its banking business in India, the news agency reported. Citigroup may infuse as much as 10 billion rupees ($216 million) into the Indian unit, Press Trust reported, citing unidentified people…..

EMI suspends plan to sell Abbey Road - Financial Times

EMI has shelved plans to sell the totemic Abbey Road Studios after a public outcry to save it for the nation, according to people close to the music company.

In a statement, EMI, which is struggling with a huge debt burden linked to its purchase by Guy Hands’ Terra Firma private equity house in 2007, said it was “holding preliminary discussions for the revitalisation of Abbey Road with interested and appropriate third parties”, but had decided the studios should stay in its ownership…..

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