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Paulson: I Ordered the Code Red

paulson2.jpgBig day tomorrow for Hank Paulson as he finally gets to set the record straight re: Ken Lewis’s kneecaps. Our feeling is the threatening of bank CEO’s while taking a leisurely bike ride is second nature for Colonel Jessup Paulson and he probably doesn’t give a damn what you think you’re entitled to. But since you clowns at Oversight and Government Reform went ahead and called the big guy to testify, he’ll humor you just this once:

Former Treasury Secretary Henry Paulson plans to tell lawmakers he acted appropriately in warning Bank of America Corp. Chief Executive Kenneth Lewis that the firm’s management could be ousted if it walked away from its deal to buy Merrill Lynch, saying such a move would have suggested a “colossal lack of judgment.”

We’re done here.
Paulson: Comments to BofA’s Lewis ‘Were Appropriate’ [WSJ]

SEC Promises to Suck Less Post-Madoff

140px-United_States_Securities_and_Exchange_Commission.pngIt what amounts to a serious case of too little, too late, the SEC says that it will do more to protect investors in the wake of the Madoff scandal.
M. Schape and Co. would like you all (House Financial Services Committee) to know that they have been busy though. Working late. Working weekends. Working hard:

regulatory proposals include restricting short-selling in down markets, strengthening oversight of mutual funds, tightening scrutiny of investment advisers and making it easier for shareholders to seat directors on company boards. The S.E.C. is also working to identify emerging risks to investors, including so-called dark pools, or automated trading systems that do not publicly provide price quotes, Ms. Schapiro said.

See? Doesn’t that make you feel better? We’re the SEC, getting better at being less clueless since 2009.
S.E.C. Plans to Protect Investors More Post-Madoff [DealBook/NYT]

Scoping | 07.15.09

• Young ‘depressed’ about money – Has everyone forgotten that spending makes us happy?!? C’mon people! Go out there and get pre-approved on something! [BBC]
• Judge won’t drop charge vs ex-Bear Stearns exec – “A U.S. judge refused on Tuesday to dismiss an insider-trading charge against former Bear Stearns hedge fund manager Ralph Cioffi, court documents showed.” [Reuters]
• Franklin drops out of group eyeing AIG unit: source – “AIG’s asset management business had drawn interest from both private equity and strategic buyers, sources told Reuters previously. Initial bids for the unit had come in around $500 million but it has taken the company several months to work out a deal.” [Reuters]

Review Comments | 07.14.09

• HSBC Sued Over $578 Million ‘Fake’ Profit From Madoff – Simply stated, clawbacks are a bitch. [Bloomberg]
• House Health Bill Slaps 5.4% Tax on Top Earners – “House Democrats Tuesday proposed new taxes on the wealthy to help fund an expansion of government health benefits. But the bill also includes a mechanism to peel back the tax increases if the revenue isn’t needed to fund the bill.” [WSJ]
• IASB promotes ‘fair value’ rule change – “A radical shake-up of how banks and insurers report the value of financial instruments has been proposed by international accounting rule-setters in a bold attempt to resolve an intense dispute at the heart of efforts to prevent a repeat of credit crisis.” Don’t hold your breath on this. Banks won’t be down for it. [FT.com]

The SEC Has Now Mastered the Art of Stating the Obvious

140px-United_States_Securities_and_Exchange_Commission.pngAnother press release from the SEC today stating how they’ve thwarted yet another Ponzi scheme.
Ponzis being the norm lately we’re not terribly impressed by this but what we did find surprising was the title of the Commission’s press release: “SEC Freezes Assets of Florida Resident Stealing Investor Funds for Luxury Purchases” (that’s our emphasis).
Is the Commission making the assumption that those individuals that are actually reading the press releases need informed about what the money stolen is actually used for? Seriously, Bernie and Big Al don’t strike us Robin Hood types, even before indictments were handed out. No where in Bern’s statement at sentencing did he state:

Your honor, I’ve become increasingly despondent about the wealth gap in this country. I stole from the wealthiest individuals, investment companies, and charities possible in order to help the people that couldn’t help themselves. It was not my intention to take all my clients’ money. I merely wanted to level the playing field. I thought this method would be most effective as opposed to raising tax rates on the rich, which I’m personally opposed to.

Didn’t hear that did you? Let’s break this down: Bernie liked handjobs(and God knows what else, shudder) and Aston Martins. Stan liked doing bumps off hookers’ asses (we’re guessing here) and buying cricket teams (this is documented).
We will give the credit to the Commission for busting another scofflaw but we would now advise that knowing your reading audience is equally important.
SEC Freezes Assets of Florida Resident Stealing Investor Funds for Luxury Purchases [SEC.gov]

Look Man, Not Even Ron Paul is Buying Your Fed Conspiracy Story, So Can We Drop it?

FatinaSalaheddineDarrellIssaUSCongressman.jpgBecause we know you haven’t gotten enough of the whole Bank of America/Merrill Lynch deal-under-duress drama, we’re happy to report that Representative Darrell Issa of California (seen at left, with, we can only assume, a constituent, not a high-priced call girl or his staffer’s wife, or his Argentinean soulmate) isn’t satisfied by B-squared’s testimony and likely won’t be satisfied with Hank “Just call me Lance Armstrong” Paulson’s testimony that is scheduled for Thursday.
No, no. Issa wants more information, “[he] wrote to Treasury Secretary Timothy Geithner July 2 asking for all records surrounding an October 13 meeting and decision to use government bailout funds to buy equity in financial institutions.”
You think that’s good? He’s not done:

Issa also asked the Treasury to provide records and communications, including notes and e-mails from a range of officials, relating to the Bank of America-Merrill merger from August 1 though February 1. Issa also asked New York Attorney General Andrew Cuomo in a July 1 letter to provide transcripts of interviews with Paulson and any other communications with federal officials on the Bank of America-Merrill merger.

That’s right. Six months worth of emails and notes. Every single post-it that you did your best Jackie Treehorn sketch on MUST. BE. SAVED.
Issa, a believer in a Nixon-esque coverup at the behest of Bernanke, has clearly channeled his inner-Maxine Waters and will BE DAMNED if this is happening on his watch.
Lawmaker seeks more data in BofA-Merrill deal [Reuters]

Because the Other Option was to Start Hocking the Stanford Financial Shwag Received for Opening a New Account

r.jpgYour latest bit of hilarity regarding the Stanford Ponzi Party is that a group of plaintiffs is suing the government of Antigua and Barbuda for $24 billion because the island was allegedly a “full financial partner in the fraud”.
Alphaville isn’t buying it, and they not so accidently, put “Fraud Victims” in quotations which we find hilarious because it almost appears that Alphaville isn’t even buying the “victims” angle as so much as they’re buying the “morons” angle.
The post goes on to inform us that “$24bn is also 24 times Antigua’s 2008 GDP“. Which moves this particular case from the “frivolous” category to the “downright idiotic” category.
Nevertheless, one might conclude that any or all of the following is what got this thing off the ground:
1. Big Al is pulling the strings from jail in order to pay for his defense because, as we learned, he’s got no legit cash.
2. Ambulance Ponzi victim chasing attorney
3. Banana farmers in Antigua that really don’t have any alternative after getting shaken down by the EU.
So duped people are pissed and they want their money back. They have finally come to the conclusion that the original $8bil has been long ago spent on Scarface-size piles of blow and endless hours spent in houses of ill repute so they’re clutching at straws.
Our advice: Just sue the SEC already.
“Fraud victims” want $24bn from the government of Antigua and Barbuda [FT Alphaville]

Scoping | 07.14.09

maxine waters.jpg• Lawyer Gets 20 Years in $700 Million Fraud – We’ve heard that Butner is lovely this time of year. [New York Times]
• Credit Swaps Investigated by U.S. Justice Department – We’re quite this is occurring at the behest of Maxine Waters because banning CDS is the only logical solution to solving this economic crisis. [Bloomberg]
• Goldman executives sold $700m of stock – If there’s anything that Maxine Waters loves hating on more than CDS it’s L to the B and Goldman Sachs. BON-US! BON-US! BON-US! [FT.com]

Review Comments | 07.13.09

• US budget deficit at $1 trillion – But the trade deficit is at a nine year low. Hoo-RAH! [BBC]
• Ronald Crawford Named SEC’s First Chief Counsel For Diversity Initiatives – Because M Schape’s troops are sick of talking about stuff they don’t do right, they needed to make an announcement that wouldn’t have anything to do with actual watch-dogginess. [SEC.gov]
• Even in Downturn, a London Banker’s Party Goes On – Even Homer Simpson has said, “It’s a party. It doesn’t have to make sense” [DealBook/NYT]

Madoff’s New Digs in North Carolina?

chicago-mls-jail.jpgBernie Madoff is “in transit” to prison per a story at Bloomberg. The story’s source was a spokesman from the Federal Correctional Institute in Otisville, NY, where the Master de Ponz requested to be housed.
CNBC has reported that he will serve his sentence in Butner, NC.
Butner has two lovely medium security facilities and one posh low security facility so it’s def not FPMITA prison but it’s not the cushy dorm-style and we would speculate that inmates are only allowed to use sporks at chow time and use Lucky Strikes to buy Juicy Fruit and other luxuries.
Bernard Madoff ‘In Transit’ to Prison, Spokesman Says [Bloomberg]

Jack Welch is Not Buying the Whole Work-Life Balance Thing

art.welch.cnn.jpgJack Welch, who is increasingly looking like Gollum these days, has been quoted saying that there is no such thing as “work-life” balance only “work-life choices”, according to a story in the Wall St. Journal.
The quotes were in context of women who choose between spending time with family and those that want to “reach the top” but you gents aren’t immune.
Accounting firms are constantly selling “work-life balance” as a priority but we’ll take Welch’s comments as gospel here since, nothing we’ve seen or heard makes us believe otherwise.
So next time you get the work-life rhetoric, you’ve got some published material for your back up your “I call bullshit” argument. You’re welcome.
Welch: ‘No Such Thing as Work-Life Balance’ [WSJ]