Wall Street Folly

Tags: Gold, Henry Paulson, John Paulson, Paulson & Co, Private equity, Sovereign wealth funds, Temasek

• Republican Brown Wins Massachusetts Seat in ‘Tsunami’ Election
• Bernanke Seeks to Defuse Criticism Over AIG With Call for Audit
• New York Fed Says AIG Phrase Marked for Deletion Was Inaccurate
• Pandit’s gambit
• Pandit Is Running Out of Time to Clean Up Citigroup
• Morgan Stanley Reports Full-Year and Fourth Quarter Result
• Bank of America Announces 2009 Net Income of $6.3 Billion
• Bank Of America 4Q Loss Narrows Amid Merrill Results Read the rest of this entry »

Tags: AIG, Bank of America, Barack Obama, Ben Bernanke, Fed, Morgan Stanley, Obamacare, Revolving Door, Scott Brown, Sovereign wealth, Twitter

• Dubai Shows Limits of Government Rescues, Roubini’s Das Says
• Mobius Says Dubai May Trigger Markets ‘Correction’
• Dubai Debt May Be Higher Than $80 Billion, UBS Analysts Say
• Dubai creditors have little option but to accept the hand they’ve been dealt
• Abu Dhabi Commercial Said Owed $1.9 Billion by Dubai
• Ex-UBS Banker Seeks Billions for Blowing Whistle
• Feinberg Stumping Helps Obama, Geithner Skirt Public’s Pay Ire
• UBS, Ernst & Young Call Claims in Madoff Case ‘Vague’ Read the rest of this entry »

Tags: Bernie Madoff, Compensation, Dubai, Marc Mobius, Pay czar, Sovereign wealth funds, UBS

Lots of Lehman headlines this morning. There was that FT article that described Lehman’s now aborted secret talks to sell a stake to Korea
Development Bank or CITIC.  According to one of the potential investors,
Lehman CEO Dick Fuld still acted as though he was in the drivers seat, saying “he thinks he is playing with a full
deck". CITIC has since come out and denied knowledge of any talks.  In
addition, Citigroup lowered earnings estimates  on Lehman (and Goldman and
Morgan Stanley) in a report dated 8/20, joining the chorus of already lowered
numbers.   And then there’s a WSJ article that says that last month
the Fed chased down a rumor that Credit Suisse had pulled a credit line from
Lehman….

Read the rest of this entry »

Tags: Citigroup, Credit Crunch, Credit Suisse, Dick Fuld, Fed, Lehman Brothers

Are sovereign wealth funds about to make major investments in foreclosed
U.S. residential real estate?  Sunday’s NY Post says that at least one
unidentified sovereign wealth fund has $29 billion waiting to put to work,
competing with the scores of private equity and hedge funds already beating the
bushes for foreclosure bargains.

Read the rest of this entry »

Tags: Credit Crunch, Hedge funds, Private equity, Real Estate

Read the rest of this entry »

Tags: Blackstone, Fed, George Soros, Hedge funds, Perella Weinberg

Read the rest of this entry »

Tags: Credit Crunch, Real Estate, Revolving Door

The losses aren’t likely to stop at Citigroup according to Dubai International Capital LLC.  They believe that the company is going to have to raise even more outside capital….

Citigroup received $7.5 billion in November
from Dubai’s neighbor, Abu Dhabi, after record mortgage losses wiped out almost
half the company’s market value and led to the departure of Chief Executive
Officer Charles Prince. The New York-based company said in January it was
getting another $14.5 billion from investors, including the governments of
Singapore and Kuwait.

“It will take a lot more than that to rescue Citi and other financial
institutions,” said Sameer al-Ansari, the chief executive officer of Dubai
International, at a private-equity conference in Dubai today. Dubai
International is among the investment funds controlled by Dubai ruler Sheikh
Mohammed bin Rashid al-Maktoum.

Citigroup May Need Cash as Losses Mount, Dubai Says – Bloomberg

Tags: Citigroup, Credit Crunch

Not only is Blackstone lookiing for other than traditional bank financing, but so too are Carlyle’s David Rubenstein and Terra Firma’s Guy Hands. And unsurprisingly, sovereign wealth funds are among the deep pocketed firms being approached.

Private equity firms are now approaching
sovereign wealth funds for loans for big leveraged acquisitions, filling the gap
left by investment banks struggling with the credit squeeze, leading buy-out
bosses said on Wednesday.

Guy Hands, head of Terra Firma, and David
Rubenstein, head of the Carlyle Group, told the Super Return conference in
Munich that private-equity firms were already talking to wealthy state-backed
funds in the Middle East and Asia about raising debt

Read the rest of this entry »

Tags: Carlyle, Private equity

According to the Daily Telegraph, Credit Suisse may be the latest investment banking firm to find a friend in one of the Middle Eastern sovereign wealth funds: 

Investment entities believed to be
affiliated to the Qatar Investment Authority, which is closely linked to the
emirate’s royal family and has tabled unsuccessful bids for J Sainsbury and
Thames Water, are understood to be considering building a 5 per cent stake in
the Zurich-based bank.

Read the rest of this entry »

Tags: Credit Suisse

Yes, they’re cutting their dividend, from .54 to .32.  And they’re getting a bunch of cash in exchange for privately issued convertible preferred stock — $12.5 billion in total — over half of it from Singapore’s sovereign wealth fund — and others including Capital Research Global Investors, the Kuwait Investment Authority, the New Jersey Division of Investment, Prince Alwaleed, and…..Sandy Weill and the Weill Family Foundation. They’re also issuing $2 billion of convertible  preferred in a public offering and an additional offering of nonconvertible preferred…

Read the rest of this entry »

Tags: Alwaleed, Citigroup, Credit Crunch, Sandy Weill

The funds, carrying a 9% dividend,  are coming from Korean Investment Corporation, Kuwait Investment Authority, and Mizuho Corporate Bank…..

Read the rest of this entry »

Tags: Credit Crunch, Merrill Lynch

More Middle Eastern bucks are getting ready to replenish the coffers at Merrill Lynch and Citigroup — the Kuwaitis are expected to participate in a $4 billion financing at Merrill and they could prop up Citi with as much as $2 – $3 billion:

Merrill Lynch is seeking about $4bn in a
second capital raising, as the hole in the US investment bank’s balance sheet
continues to grow.

The Kuwait Investment Authority is expected
to be a significant investor in the new deal, which could be announced as soon
as midweek, according to people familiar with the matter. Other investors could
come from Europe.

KIA, which may also invest as much as $2bn
or $3bn in Citigroup, is emerging as an large source of rescue finance on Wall
Street. Once among the most conservative of sovereign wealth funds, KIA is
changing its strategy in order to move more quickly than competitors and seize
opportunities amid the turmoil in the US credit markets, these people say. Both
Merrill and KIA declined to comment.

Both the price and the terms of the deals
at Citi and Merrill are still being negotiated.

Kuwait set to invest as Merrill seeks $4bn - Financial Times

Tags: Citigroup, Merrill Lynch

PRETTY UP THOSE RESUMES!!! While many doors are closing on investment professionals due to the credit crunch, there are at least a few others that are opening.  The mega-wealthy sovereign wealth funds are hiring from the west and will pay big bucks to attract talent at many levels from private equity and investment firms. And they’re looking for high profile execs as well.  China Investment Corporation is said to be interested in former Fed chief Alan Greenspan.

All it takes is a lot of the green stuff.  And they have it….

Read the rest of this entry »

Tags: Revolving Door

Not to be left out of the Middle Eastern hunt for U.S. sub-prime bargains, the deep pocketed Kuwaitis are primed to make big bets….

Read the rest of this entry »

Tags: Credit Crunch

Going the way of some of its competitors like Morgan Stanley, UBS and Citigroup, Mother Merrill may be the next to get an injection of the Asian green stuff: 

Temasek Holdings Pte. Ltd., a Singapore
state-owned investment company, is in advanced talks to inject as much as $5
billion into Merrill, a person familiar with the situation said.

The news comes amid analyst predictions that mortgage write-downs at Merrill may
double with another $8 billion or more in the fourth quarter — the latest sign
that Wall Street isn’t out of the subprime woods yet. Temasek’s board has given
preliminary approval to the investment in Merrill, although pricing, timing and
regulatory issues remain to be negotiated, the person familiar with the
situation said. As such, a deal may still not materialize.

 

Read the rest of this entry »

Tags: Credit Crunch, John Thain, Merrill Lynch

Just as news emerged that the senior execs at Bear Stearns, including CEO Jimmy Cayne, would forgo their bonuses this year, Morgan Stanley’s John Mack will do likewise.  Morgan reported a whopper of a loss this morning, including a larger than expected write down of $9.4 billion.  But not to worry.  The Chinese are riding to the rescue, plugging half the value of that hole with a $5 billion infusion….

Read the rest of this entry »

Tags: Bonuses, Compensation, Credit Crunch, John Mack, Morgan Stanley

Those folks in Abu Dhabi sure are busy.  Just last week the government run Mubadala Development Corp announced they were buying an 8.1% stake in AMD (that Fox Business News famously first reported as an investment by Apple).  Today it was announced that the Abu Dhabi Investment Authority is injecting $7.5 billion into Citigroup. The deal was announced after the close today, where for the first time in 5 years, the stock broke $30.  During the day CNBC reported that Citi was planning major job cuts, with possibly up to 45,000 getting the ax…..

As a result of the deal, the investment authority known as ADIA will become one of Citigroup’s largest shareholders, with a stake of no more than 4.9%. The stake will exceed that of Saudi Prince Alwaleed bin
Talal, long known as one of Citigroup’s largest shareholders, according to a person familiar with the situation.

"This investment, from one of the world’s leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business," said Sir Win Bischoff, the bank’s acting chief executive officer, in a statement.

In exchange for its investment, ADIA will receive convertible stock in Citigroup yielding 11% annually. The shares are required to be converted into common stock at a conversion price of between $31.83 and $37.24 a share over a period of time between March 2010 and September 2011. The investment, which came together in about a week, is expected to close within the next several days.

Abu Dhabi to Bolster Citigroup With $7.5 Billion Capital Infusion – Wall Street Journal

Tags: Charts, Citigroup, CNBC, Revolving Door