While the chorus of Wall Street CEOs proclaiming that the credit crunch is nearing an end, Credit Suisse CEO Brady Dougan isn't quite so optimistic. He thinks it's gonna last longer...
"I am extremely optimistic about the
opportunities ahead of Credit Suisse, even as I remain very cautious about the
short-term environment," Dougan said.
"Whenever there seems to be light at the end of the tunnel, it has turned
out to be another train coming at us," he said. "My inclination is to
remain cautious."....
``I think that the markets are overly
optimistic right now,'' Dougan said in a speech in Geneva today. ``There
continue to be challenges and that's going to play out over the next six to
eight weeks. There continue to be issues on the liquidity side.''
The US investment bank began cutting jobs
on Wednesday, with the process expected to take some weeks as Morgan Stanley
continues to restructure. Between 150 and 200 employees have already lost their
jobs.
News that Morgan Stanley would cut about 5pc of its workforce, or 1,500
globally, surfaced earlier this month but most of the sackings were expected to
come in the US.
The speed and scale of the cuts in London have taken some Morgan Stanley
insiders by surprise.
Yahoo just issued a completely unconvincing yet totally predictable response to Carl Icahn's proxy fight letter, essentially flipping him off. It said:
Unfortunately, your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal. A
fair-minded review of the factual record leads to one conclusion: that Yahoo!’s ten-member board, comprised of nine independent directors along
with Yahoo! CEO Jerry Yang, remains the best and most qualified group to
maximize value for all Yahoo! stockholders.
Conversely, we do not believe it is in
the best interests of Yahoo! stockholders to allow you and your hand-picked
nominees to take control of Yahoo! for the express purpose of trying to force
a sale of Yahoo! to a formerly interested buyer who has publicly stated that
they have moved on. Please may I remind you that there is currently no
acquisition offer on the table from that company or any other party. That
said, we have been crystal clear in our stance that we have been and remain
willing to consider any proposal from any party including Microsoft if it
offers our stockholders full and certain value.
A fair-minded review leads to only one conclusion? That the 10 morons on the board who unanimously rejected Microsoft's premium offer and drove them away are the most qualified to run the company? Jerry Yang and company are clearly drinking that funny Kool-Aid again....
We presume that he must have a prenup, but who knows? In any case, we're just wondering if the split (a separation at this point) might spill into the board room if it goes the divorce route or if it will be handled quietly in a civil manner. You know how messy these little marital tiffs can get, especially when there are big bucks and blocks of stock involved, not to mention, a very long marriage (described below by the NY Observer as "emotionally cool")
ARTHUR Sulzberger Jr. is separated for
real. The chairman/CEO of the New York Times Co. was spotted yesterday morning
moving into the Phillips Club, a residential hotel on West 66th, where 2-bedroom
apartments start at $17,000 per month. Sulzberger - who announced his separation
from his wife of 33 years, Gail Gregg, on Saturday - was spotted unloading about
10 suitcases from a large SUV. Gregg remains in the marital abode on West 64th,
which was transferred into her name in March, when a Times spokeswoman lamely
explained to us it was for "estate-planning purposes."
"My mother called me up at the end of the equity bubble, and... you know I have been at the heart and seen some of the problems, and my mother said, 'Hey how come you never go to jail?' ,and I said 'Gee, Thanks Mom'...The 'everybody's doing it' excuse doesn't hold when people are wondering how this happened, and they want to take action...Look at your practices."
so he's offered to make pro rata refunds to contributors of $2.9 million to his Spitzer 2010 campaign fund. If you gave him money, you have until June 15 to send in an official request for refunds.
Reuters tells us that a new report out of compensation consultants Johnson Associates indicates that bonuses this year could be pretty slim, contracting from 10 - 25%, and possibly 35% in the executive suite. (We sadly note the obvious -- that if you're unemployed they also could be nonexistent.)
The credit crisis will mostly affect
bonuses for workers directly involved in trading and selling assets like
subprime mortgage bonds, the report said.
Senior executives will likely face the
biggest bonus cuts and may even find their pay linked to risk exposure, the
report said. Banks may also implement what the report referred to as "clawbacks"
-- managers to pay back compensation money if certain results are not met, the
report said.
Gooooooooooo Carl!. Really, those jokers on the Yahoo board all deserve to get the hook. Carl Icahn has apparently decided to go the proxy fight route and will attempt to lay waste to the entire ten member Yahoo board, as opposed to the easier path of trying to pick off a smaller number of directors. We don't know if he'll get all of them or any, for that matter --- his goal really isn't taking over the board, but jump starting talks between Yahoo and Microsoft to get a deal done. Carl bought 50 million Yahoo shares after Microsoft pulled its Yahoo bid. With the shareholder sentiment such as it is....in general really pissed off -- we would expect that the show of shareholder support will be overwhelmingly in Carl's favor.
We love watching a good fight. And this one should be classic.
Seems like it's been around for many weeks, but Henry Blodget is editing a new blog called Clusterstock:
We're yet another site focused on the
financial markets. We offer proprietary and third-party analysis, financial
models, news, commentary, and aggregation. We're edited by Henry Blodget (yes
that Henry Blodget). Henry is a former top-ranked Wall Street stock analyst who
was later keelhauled by Eliot Spitzer (yes, that Eliot Spitzer).
We're in beta now, which means we still suck. We're working hard, though, and we
hope to get better fast....
Calling all publicity hungry hedge funders / traders: Wall Street Warriors, the series shown on HDTV network MOJO-HD wants you. (That's the show that chronicled publicity ho & bar mitzvah money hedge fund wannabe / flame out Timmy Sykes, among others). It seems that now that we're in a credit crunch no one wants to be filmed -- they're having trouble rounding up warm bodies to fill up the screen for next season's. They had an open casting call on Tuesday, but we bet if you really, really want to be on the show, the producers would still be happy to talk to you....
According to Page Six, Barbara Walters, who recently published her kiss and tell memoirs, may be stinging from some of the criticisms over her affair with then-married Senator Edward Brooke. But more interestingly is what a playa she was, also carrying on simultaneously with Bear Stearns CEO Alan "Ace" Greenberg, and then-future Fed chief Alan Greenpan. And her housekeeper couldn't tell the two Alans apart:
"Audition" also reveals that
after breaking up with Brooke, Walters continued seeing Greenberg while also
dating Alan Greenspan, the future Federal Reserve chairman.
Her Latina housekeeper couldn't keep the
two Alans straight. "When they gave me the message, I could only ask, which
one talked louder?" Walters wrote. "Alan Greenberg . . . talked in a
normal tone of voice. Alan Greenspan was very soft-spoken. He almost whispered.
And that's how I would know whether it was Greenspan or Greenberg."
It's more like $9 billion so far, but could end up plus or minus another billion....
JPMorgan Chase is to take a charge of about
$9bn – half as much again as its estimate – to clean up Bear Stearns’
balance sheet and pay for redundancies and litigation arising from its cut-price
takeover of the stricken investment bank.
Jamie Dimon, JPMorgan’s chairman and
chief executive, told a banking conference organised by UBS that the higher
costs were driven by the losses suffered by Bear this year and the
larger-than-expected amount of bad assets on its books.
Mr Dimon said he remained optimistic on the
long-term benefits of the $1.5bn takeover of Bear but described it as “mission
not accomplished”, arguing saying that the success of the deal would have to
be judged in future years.
On Monday, Mr Dimon said the $9bn charge,
which includes Bear’s most recent losses that were not contained in the
original estimate, could end up being up to $1bn higher or lower.
With private equity deals few and far between, Blackstone is delving deeper into the event driven fund business. And they're looking to further expand their interests in Asia with their most recently announced move. Schwarzman & Co is starting up a unit that will invest in Asian event drivn opportunities indluding those related to mergers and bankruptcies. SAC Capital alum Aaron Nieman will run it:
Blackstone Altius Advisors will be led by
Senior Managing Director and Chief Investment Officer Aaron Nieman, New York-
based Blackstone said in a statement issued through BusinessWire today. The fund
will be based in Hong Kong with employees in Tokyo, Mumbai and New York.
``As Blackstone continues to aggressively
seek opportunities within Asia, Aaron and his team will provide additional
investment capability that will bolster our presence in the region,'' Antony
Leung, Blackstone's Greater China chairman, said in the statement.
Nieman joined Blackstone from SAC Capital
Management, where he was a managing director in the Canvas Capital Management
unit overseeing merger arbitrage and event-driven investments in Asia- Pacific,
the Blackstone statement said.
Or was Alan Schwartz just plain dissed at a luncheon hosted by Ben Bernanke and attended by most every other Wall Street BSD? Or maybe he was invited and was just too busy trying to put out fires on the home front. In any case, Bernanke hosted one hellofa gathering (click on picture to enlarge)....
Federal Reserve Chairman Ben S. Bernanke
lunched on March 11 with a Who's Who of Wall Street leaders, including JPMorgan
Chase & Co.'s Jamie Dimon, three days before the central bank rescued Bear
Stearns Cos. from bankruptcy.
Other guests included Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein,
Lehman Brothers Holdings Inc. CEO Richard Fuld, Morgan Stanley President James
Gorman, Citigroup Inc.'s Robert Rubin, Blackstone Group CEO Stephen Schwarzman
and Merrill Lynch & Co. CEO John Thain. Alan Schwartz, the CEO of Bear
Stearns, was not listed among the attendees.
That Meredith Whitney is a busy busy bee. Yesterday, Oppenheimer's financial stock soothsayer rained on Vikram Pandit's plan to put Citi back on the road to recovery where she said that the plan sounded all too much like one Chuck Prince had floated before. She was interviewed by Bloomberg TV; you can find the video here -- look for the link on the right that says "Whitney Says Pandit Faces `Impossible Feat' at Citigroup" under 'related video and graphics'....
Then last night Meredith continued to be busy, putting out a 20 page tome entitled: "What Goes Up, Must Come Down: FASB 159 Write-Ups Come Back To Bite 2Q08 Earnings". She lowered her estimates for Goldman Sachs, Lehman Brothers, Morgan Stanley, and Merrill Lynch....
But the U.S. recession is "just beginning" and that there's a one out of three chance that this one could be as bad as the early 1980's. He also commented on how the Bear Stearns merger is going. The firm lost "several billion dollars since March 17", the announcement date of the merger....
At an investor conference Monday, Mr. Dimon
referred to the merger with Bear Stearns -- a highly-watched deal set to close
around June 1 -- as "mission: not accomplished." Mr. Dimon said the
entire merger process will last through 2009, but provided a number of
indications that the New York bank is well on its way.
Although the deal remains some weeks from closing, Mr. Dimon said J.P. Morgan
has already found new job positions for 40% of Bear Stearns staffers, even as
Wall Street endures heavy rounds of layoffs. Mr. Dimon reiterated previous
comments that the remaining Bear Stearns employees will know their fates by the
time the merger closes.
Turns out that Stanley Druckenmiller, who runs hedge fund Duquesne Capital, was one of those behind the move. Page Six tells us that he wrote a $250K check to the Draft Bloomberg Joint Fundraising Committee on January 14 when Mayor Bloomberg was noodling over becoming a third party candidate. Mike's Boosters - Page Six NY Post
The WSJ delves into the rise and rapid flame-out of Peloton Partners....
When hedge-fund chief Ron Beller's
investments in U.S. mortgages turned against him, he got a rude awakening to
Wall Street's unsentimental ways. Bankers who had vied for his business reeled
in credit lines and seized the fund's assets. In a matter of days, Peloton
Partners LLP, once one of the world's best-performing hedge-fund operators, lost
some $17 billion.
In its sheer speed, Peloton's demise offers
an illustration of the delicate relationships upon which the financial industry
is built, and the breakneck pace at which they have been unraveling.
