Posted tagged ‘articles’

A Recounting of Recent History

July 28, 2009

Yes, I’m alive! I’m terribly sorry for the extended silence, but I’ve had some big changes going on in my personal life and have been out of the loop for a while (honestly, my feed reader needs to start reading itself–I have over 1,000 unread posts when looking at just 4 financial feeds). So, here’s what I haven’t had a chance to post…

1. I totally missed the most recent trainwreck of a P.R. move at Citi. There is so much crap going on around Citi… I really intend to write a post that is essentially a linkfest of Citi material that stitches together the narrative of how Citi got into this mess and how Citi continues to do itself no favors. There was also a completely vapid opinion piece from Charlie Gasperino that said absolutely nothing new, save for one sentence, and then ended with a ridiculous comparison that was clearly meant to generate links. I’m not even going to link to it… It was on the Daily Beast, if you must find it.

2. I haven’t really had the opportunity to comment on the Obama administration’s overhaul of the financial regulatory apparatus. Honestly, it sucks. It doesn’t do much and gives too much power to the Fed. You’d think that after that recent scandal within the ranks of the Fed there would be a political issue with giving it more power. Even more interestingly, all other major initiatives from the Obama administration have been drafted by congress. Here, the white paper came from the Whitehouse itself. That won’t do too much to quiet the critics who are claiming that the Whitehouse is too close to Wall St. Honestly, if one is to use actions instead of words to measure one’s intentions, then it’s hard to point to any evidence that the Obama administration isn’t in the bag for the financial services industry.

3. The Obama administration did an admirable job with G.M. and Chrysler. They were both pulled through bankruptcy, courts affirmed the actions, and there was a minimal disruption in their businesses. Stakeholders were brought to the table, people standing to lose from the bankruptcy, the same people (I use that word loosely–most are institutions) who provided capital to risky enterprises, were forced to take losses, and the U.S.A. now has something it has never had: an auto industry where the U.A.W. has a stake and active interest in the companies that employ its members. Perhaps the lesson, specifically that poorly run firms that need to be saved should cause consequences for the people who caused the problems (both by providing capital and providing inadequate management), will take hold in the financial services sector too–I’m not holding my breath, though.

4. Remember this problem I wrote about? Of course not, that is one of my least popular posts! However, some of the questions are being answered. Specifically, the questions about how and when the government will get rid of its ownership stakes, and at what price, are starting to be filled in. It was rather minor news when firms started paying T.A.R.P. funds back. However, the issue of dealing with warrants the government owns was a thornier issue. Two banks have dealt with this issue–Goldman purchased the securities at a price that gives the taxpayers a 23% return on their investment and JP Morgan decided that it would forgo a negotiated purchase and forced the U.S. Treasury to auction the warrants.

On a side note: From this WSJ article linked to above, its a bit maddening to read this:

The Treasury has rejected the vast majority of valuation proposals from banks, saying the firms are undervaluing what the warrants are worth, these people said. That has prompted complaints from some top executives. […] James Dimon raised the issue directly with Treasury Secretary Timothy Geithner, disagreeing with some of the valuation methods that the government was using to value the warrants.

(Emphasis mine.)

If I were on the other end of the line, my response would be simple: “Well, Jamie, I agree. The assumptions we use to value securities here at the U.S. government can be, well … off. So, we’ll offer you what you think is fair for the warrants if you’ll pay back the $4.4 billion subsidy we paid when we initially infused your bank with T.A.R.P. funds.” Actually, I probably would have had a meeting with all recipients about it and quoted a very high price for these warrants and declared the terms and prices non-negotiable–does anyone really think that, in the face of executive pay restrictions, these firms wouldn’t have paid whatever it would take to get out from under the governments thumb? As long as one investment banker could come up with assumptions that got the number, they would have paid it. Okay, that’s all for my aside.

5. I’m dreadfully behind on my reading… Seriously. Here’s a list of articles I haven’t yet read, but intend to…

I hope to get more time to post in the coming days. Also, I am toying with the idea of writing more frequent, much shorter posts. On the order of a paragraph where I just toss out a thought. Not really my style, but maybe it would be good. Feedback appreciated.

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Reading: Good For You, In Moderation

January 10, 2009

Okay, as I promised, I’d post on something I’m doing: catching up! Seriously, why do people keep writing kilo-worded articles? And all these must-read pieces… argh! Here’s what I haven’t gotten around to yet…

  1. The Weekend That Wall St. Died — The WSJ Journal piece that seems to be the answer to their three-part series on Bear Stearns.
  2. Fannie Mae’s Last Stand — Vanity Fair, in an effort to prove that they can write a lot of words about finance too, delivers 10,000 words on the G.S.E.’s end.
  3. Joe Nocera on VaR — Honestly, the fact that everyone read and commented on an article focused on VaR probably means I should get a less-nerdy blogroll. That being said, I can’t avoid the fact I’ll probably enjoy reading it.
  4. Two Part Op-ed from Einhorn and Michael Lewis — They should write a book. It can be called, “The New Profitable Thing: Fooling The Government All The Time”
  5. Judd Gregg’s Op-ed in the WSJ — Apparently, we (taxpayers) are making money hand over fist! Can I put more money with them?
  6. John Paulson’s Profile in Portfolio — The man put himself on the map and went from good, but not special, merger-arb to the king of the Fundhouse.
  7. The Reckoning — This series by the NYT goes int all sorts of topics. Really, though, NYT … China caused the crisis? Every article is lots of words.
  8. The End of Wall St. — Ugh. I know, should have read it by now. Sorry well-informed people.
  9. A Reasonable Query for AIG — Simply asks the question, “Where did the cash go?” I have no idea, I haven’t read it yet.
  10. AIG’s Bailout — A long article on it. That’s all I know.
  11. How India Avoided a Crisis — Joe Nocera talks about how India avoided … fine, you get it. Gotta be something worth knowing in here.
  12. How Spain Avoided a Crisis — It goes into some details about how they thought about the risks in the market and how they avoided the issues.
  13. Three Part Washington Post Series on AIG’s Collapse — By the end of this reading list I’m going to know every detail about the AIG bailout or the mainstream media should be vivisected.
  14. Anatomy of a Crisis — Profile of Bernanke and the crisis. It’s long and in the New Yorker, so it must be both worth reading and difficult to find the time and will to read.
  15. Euromoney Article on Lehman and Prime Brokerages — Once again, it’s long and it’s about a crisis. Must be worth reading.
  16. Banks vs. Consumers — In one corner you have lobbyists, PACs, and well-connected executives. In the other corner you have the people that actually elect the public officials who make that rules that will determine the outcome. Given that description, it has a surprise ending!
  17. NYT Advocates a Consumer Czar — This is just something I believe should be done. Hopefully they have facts I can arm myself with.
  18. Profile of Henry Blodget — This might actually remain on my list for a long time, since he never answers my emails. Although, Dan Frommer and I are Twitter pals, so maybe I’ll read it soon after all.
  19. Profile of Jimmy Cayne — I guess I’ll wait until I’m feeling down on myself…
  20. Inflation Swindles the Equity Investor — Not sure how this 1977 Warren Buffett article got on my list, but it hasn’t been on anywhere near as long as it’s been around.
  21. A Short Banking History of the U.S. — I have no idea how this got on there… NONE!
  22. A whole bunch of “Background of the Merger” sections from filings….

Argh. CliffsNotes… ?

Dear John Thain: Now Found Elsewhere, Too

March 16, 2008

I was contacted recently by Seeking Alpha and asked to contribute. I agreed and some of my content will now be featured on their site as well here (and in your local feed reader).

My page on S.A. is located here. I anticipate having my bio up shortly.

Also, two of my posts have already been carried by Seeking Alpha: my suggestions for Citi’s management and my plea to the fincial media.

Please do go to their site if you don’t already–I use it extensively for topical information, their news summaries and aggregation, and their transcripts.