Ever since the credit crisis began, the gossip factor of the WSJ articles chronicling it has been rising steadily. From the inner workings of Vikram Pandit's twisted mind to Timothy Geithner's private pain, the WSJ is there to dramatize every moment. Just one example of many: today's article about the automotive restructuring, Detroit's Fate Sealed in West Wing.
In this riveting piece, master storytellers Monica Landley and Neal E. Boudette take us from the hallowed halls of Washington to a dingy Northwest terminal in Detroit. Opening in a "windowless, ornate room", the tale is pure suspense from beginning to end. A selection from later in the piece:
Late in the afternoon, the two executives hurried to the airport and boarded a Northwest flight bound for Detroit. It was a far cry from the days when they flew the corporate jets GM operated out of its own small terminal at the Detroit airport.
They settled into the last row in first class, Mr. Henderson taking the window and Mr. Wagoner the aisle. As the Airbus 319 lifted off, Mr. Henderson occupied himself with the day's newspaper, Mr. Wagoner with reports. The two men said little to each other throughout the one-hour-and-36-minute flight.
Oooooh. You can really feel the tension. And the line harkening back to the days of corporate jets and private terminals? Sentimental gold. I can hardly wait for the next installment!
Showing posts with label Credit Crisis. Show all posts
Showing posts with label Credit Crisis. Show all posts
31 March 2009
10 March 2009
Now, wait just a minute...
Imagine my surprise when I opened today's NYTimes Business section and discovered this headline: Stocks Rise on Upbeat Memo From Citigroup. "There must be some mistake," I thought. But no:
[Citi] turned a profit in the first two months of the year, and...its quarterly performance to date, before taxes and special items, was the best since the third quarter of 2007.
At about 2 p.m., the Dow Jones industrial average was up 292 points, or nearly 4.5 percent, while the broader Standard & Poor’s 500-stock index rose 5.2 percent — the biggest gains for the two market indices since late January.
Um.. what? How could this be? Just this morning I read not one but two scathing WSJ articles about how Citi is going down the shitter and that even Ken "lost $1.79 billion in the fourth quarter but hey we were profitable for the full year right?" Lewis is dissing on the ailing bank. Understandably, I'm more than a little suspicious about this upbeat news. After all, "special items" have been known to include everything from volcano insurance to crippling subprime losses. And despite the fact that Citi's stock "surged 23 percent in midmorning trading," 23% of $1 isn't much to brag about. So, Vikram, you've earned the pats on the back I'm sure you'll receive from many in your organization, but I wouldn't hold my breath for that bonus.
[Citi] turned a profit in the first two months of the year, and...its quarterly performance to date, before taxes and special items, was the best since the third quarter of 2007.
At about 2 p.m., the Dow Jones industrial average was up 292 points, or nearly 4.5 percent, while the broader Standard & Poor’s 500-stock index rose 5.2 percent — the biggest gains for the two market indices since late January.
Um.. what? How could this be? Just this morning I read not one but two scathing WSJ articles about how Citi is going down the shitter and that even Ken "lost $1.79 billion in the fourth quarter but hey we were profitable for the full year right?" Lewis is dissing on the ailing bank. Understandably, I'm more than a little suspicious about this upbeat news. After all, "special items" have been known to include everything from volcano insurance to crippling subprime losses. And despite the fact that Citi's stock "surged 23 percent in midmorning trading," 23% of $1 isn't much to brag about. So, Vikram, you've earned the pats on the back I'm sure you'll receive from many in your organization, but I wouldn't hold my breath for that bonus.
27 February 2009
Wow, the economy really sucks
It seems every day a new government report comes out reminding us how fucked up the economy is. Today's GDP report, however, took that concept one step further: it tells us that the economy is actually even more fucked up than we thought! Yesssss.
Output fell 6.2 percent at an annualized rate in the fourth quarter of 2008, revised downward from a previous estimate of a 3.8 percent decline. The drop was even steeper than many economists had feared — the consensus estimate had been a 5.4 percent decline — and was much lower than the 0.5 percent contraction from the previous quarter.
John Ryding, chief economist at RDQ Economics, described the report as "ghastly". Ouch. Well, at least it can't get much worse, right? WRONG, says John Barbera, chief economist at ITG. His prediction: "this quarter will be at least as bad as the last one."
Output fell 6.2 percent at an annualized rate in the fourth quarter of 2008, revised downward from a previous estimate of a 3.8 percent decline. The drop was even steeper than many economists had feared — the consensus estimate had been a 5.4 percent decline — and was much lower than the 0.5 percent contraction from the previous quarter.
John Ryding, chief economist at RDQ Economics, described the report as "ghastly". Ouch. Well, at least it can't get much worse, right? WRONG, says John Barbera, chief economist at ITG. His prediction: "this quarter will be at least as bad as the last one."
18 February 2009
NY <3 Unemployed Bankers
Now that's a slogan you can put on a t-shirt! Today Mayor Michael Bloomberg unveiled a plan to retrain Wall Street's newly laid off investment bankers, traders, and other assorted sell-side losers:
Under a program Mayor Michael R. Bloomberg unveiled on Wednesday, the city wants to invest $45 million in government money to retrain investment bankers, traders and others who have lost jobs on Wall Street, as well as provide seed capital and office space for new businesses those laid-off bankers might create.
The plan is intended to stem the exodus of talent from the rapidly collapsing financial services industry, which has been the city’s economic engine for decades, and speed the industry’s recovery, which may take years, officials said.
You may have noticed the little "m" before the "illion" in "$45 million"... no, that isn't a typo; Mayor Bloomberg is funding this program with roughly the same budget as that of John Thain's office renovation. (Zing!) So New York loves you, unemployed bankers... just not that much.
Under a program Mayor Michael R. Bloomberg unveiled on Wednesday, the city wants to invest $45 million in government money to retrain investment bankers, traders and others who have lost jobs on Wall Street, as well as provide seed capital and office space for new businesses those laid-off bankers might create.
The plan is intended to stem the exodus of talent from the rapidly collapsing financial services industry, which has been the city’s economic engine for decades, and speed the industry’s recovery, which may take years, officials said.
You may have noticed the little "m" before the "illion" in "$45 million"... no, that isn't a typo; Mayor Bloomberg is funding this program with roughly the same budget as that of John Thain's office renovation. (Zing!) So New York loves you, unemployed bankers... just not that much.
21 January 2009
Breakingviews read my MIND (or my post)
Remember when I hinted that Rising Unemployment could just be this season's #1 video game hit? Well, Breakingviews must have read my post, because they took my idea and ran with it, albeit in a slightly different direction:
How fast can you lose $50bn? To lighten the winter gloom, we’ve brought you the “Bernie Madoff game”. Pretend you are running a Ponzi scheme. Decide the fictional return you want to promise investors, how much to siphon off for yourself and how long to let the scam run. Then watch the losses mount.
The game itself is a little dull, just a few numbers plugged into a spreadsheet, but its simplicity is startling. All you do is set a return level, plug in losses/disbursements, and watch the losses mount. Really, anyone can do it! Although you probably shouldn't... Thx to DealBook for the tip.
How fast can you lose $50bn? To lighten the winter gloom, we’ve brought you the “Bernie Madoff game”. Pretend you are running a Ponzi scheme. Decide the fictional return you want to promise investors, how much to siphon off for yourself and how long to let the scam run. Then watch the losses mount.
The game itself is a little dull, just a few numbers plugged into a spreadsheet, but its simplicity is startling. All you do is set a return level, plug in losses/disbursements, and watch the losses mount. Really, anyone can do it! Although you probably shouldn't... Thx to DealBook for the tip.
09 January 2009
Unemployment hits 16-year high
Well, that's depressing news. But just how bad is it? The NYTimes provides a lovely slideshow on its front page to help us understand the crisis:
I gotta say... Rising Unemployment looks like a kinda cool video game. Down we go! Weeee! Which exciting boss will we encounter once we reach the employment dungeon? Recessionary Koopa? Or will it be the evil Depression von Koopa? Graphics make unemployment fun!!
05 January 2009
Joan Rivers reflects on Madoff scandal
We've all heard about the Madoff scandal and the people whose lives it has touched/ruined, but it took yesterday's NYTimes Magazine interview with Joan Rivers to explain what it really means.
Rivers: I’m pleading with you, please say, “She lost a bundle with Bernie Madoff.”
NYT: Did you?
Rivers: No, but everybody is walking around now saying that, and that shows that you used to be very rich.
So look on the bright side, people! Losing millions of dollars in a pyramid scheme can be a good thing! At least you had millions of dollars, which is more than most of us can say, you (formerly) rich (probably) greedy bastard. Thx to Daily Intel for the tip.
Rivers: I’m pleading with you, please say, “She lost a bundle with Bernie Madoff.”
NYT: Did you?
Rivers: No, but everybody is walking around now saying that, and that shows that you used to be very rich.
So look on the bright side, people! Losing millions of dollars in a pyramid scheme can be a good thing! At least you had millions of dollars, which is more than most of us can say, you (formerly) rich (probably) greedy bastard. Thx to Daily Intel for the tip.
10 December 2008
WSJ now peddling schadenfreude
Not to overuse the term, which has gotten more than enough play in the past few months, but a new, front-page column in the WSJ is practically screaming schadenfreude.
It's called "The Fallen", and it's described by the paper as a series highlighting, "the declining fortunes of leading business figures." And in case you're more of a visual learner, it is accompanied by a little picture of a red arrow zig-zagging upwards before dropping precipitously to zero.
I mean, this is a paper that carries advertisements for 50-year old scotch and hundred-thousand dollar watches. Its target audience doesn't typically like to read about how many rich businessmen are failing these days. These people are those rich businessmen. Or should I say, were...
It's called "The Fallen", and it's described by the paper as a series highlighting, "the declining fortunes of leading business figures." And in case you're more of a visual learner, it is accompanied by a little picture of a red arrow zig-zagging upwards before dropping precipitously to zero.
I mean, this is a paper that carries advertisements for 50-year old scotch and hundred-thousand dollar watches. Its target audience doesn't typically like to read about how many rich businessmen are failing these days. These people are those rich businessmen. Or should I say, were...
09 December 2008
Treasury yields go negative
For years to come, municipal bond traders and other industry followers will tell their children and grandchildren the harrowing tale of The Day Treasury Yields Turned Negative.
Four-week notes traded at a yield of zero while three-month notes went for 99 cents on the dollar. For you non-finance types, that means that investors bought billions of dollars of bonds today that were guaranteed to lose them money. As the NYTimes puts it:
The news sends a sobering signal: in this environment, losing only a small amount of money on an investment is tantamount to coming out ahead.
Four-week notes traded at a yield of zero while three-month notes went for 99 cents on the dollar. For you non-finance types, that means that investors bought billions of dollars of bonds today that were guaranteed to lose them money. As the NYTimes puts it:
The news sends a sobering signal: in this environment, losing only a small amount of money on an investment is tantamount to coming out ahead.
03 December 2008
Brace yourself for a great blog post!
CNN, you slay me. Where do you find this shit, seriously? Today we learn of high school teacher Tom Farber, who has begun selling ads on his calculus exams in an effort to raise extra cash for school expenses. An example:
You'd think Mr. Farber would get a lot of flack for diluting the purity of the educational process, bargaining his students' future for a buck, etc. etc., but parents and school officials have actually been very supportive. Personally, my ire lies not with Farber but with Stephen P. Henry D.M.D. "Brace yourself"? Could you be any lamer???
Detroit sucks so bad even Detroit thinks so
Yesterday the Big Three automakers returned to Congress to plead their cases once again for federal aid. In case you didn't already realize how much they suck:
GM said it needs an immediate injection of $4 billion to stay afloat until the end of the year, a fact it hadn't before disclosed. In total, the company said it needs $18 billion in loans -- $6 billion more than it said it would need just two weeks ago...
In a conference call with reporters, GM President Frederick "Fritz" Henderson said bankruptcy is not a viable option and the company is focusing solely on securing help from Washington. "There is not a Plan B," he said.
So, basically, the company needs $4 billion just to survive a single month. That must be some sort of record. And if for some crazy reason the government decides to put that money to better use, like say, by burning it, then GM's brilliant management team is out of ideas.
So what do regular ole Detroiters think of this plan? Apparently, they think it sucks, too:
John Raterink, a tool and machine maker who works at a small shop in Grand Rapids that supplies parts to the auto industry, opposes a bailout even though his livelihood is tethered to the car makers. Mr. Raterink, 46, points a finger at the Big Three for a lot of economic misery: "If I have to pull myself up by my own bootstraps, I hope G.M. faces that same reality."
In all fairness that dude is probably in the minority, but still. When even you think that you suck, it's time to move on.
GM said it needs an immediate injection of $4 billion to stay afloat until the end of the year, a fact it hadn't before disclosed. In total, the company said it needs $18 billion in loans -- $6 billion more than it said it would need just two weeks ago...
In a conference call with reporters, GM President Frederick "Fritz" Henderson said bankruptcy is not a viable option and the company is focusing solely on securing help from Washington. "There is not a Plan B," he said.
So, basically, the company needs $4 billion just to survive a single month. That must be some sort of record. And if for some crazy reason the government decides to put that money to better use, like say, by burning it, then GM's brilliant management team is out of ideas.
So what do regular ole Detroiters think of this plan? Apparently, they think it sucks, too:
John Raterink, a tool and machine maker who works at a small shop in Grand Rapids that supplies parts to the auto industry, opposes a bailout even though his livelihood is tethered to the car makers. Mr. Raterink, 46, points a finger at the Big Three for a lot of economic misery: "If I have to pull myself up by my own bootstraps, I hope G.M. faces that same reality."
In all fairness that dude is probably in the minority, but still. When even you think that you suck, it's time to move on.
24 November 2008
20 November 2008
Adieu, W
Breaking: the MTA has just announced its crazy-ridiculous service cuts and fare hikes that are sure to have all NY commuters in a tizzy. Yipes.
Faced with its most severe financial crisis since the 1970s, the Metropolitan Transportation Authority announced plans on Thursday to drastically cut service on its subways, buses and commuter railroads starting in the spring and to impose a 23 percent increase in fare and toll revenue beginning June 1 and another 5 percent increase in 2011.
For New York City Transit, the biggest component of the authority, the deficit-closing plan would eliminate the W and Z subway lines; eliminate service on the M line to Bay Parkway in Brooklyn; shorten the route of the G line, which will permanently stop at Court Square in Long Island City, Queens, instead of 71st and Continental Avenues in Forest Hills, Queens; lower the frequency of most letter-line trains to every 10 minutes from every 8 minutes on weekends; lower the frequency of all trains to every 30 minutes from every 20 minutes from 2 to 5 a.m.; eliminate overnight bus service on 25 routes; and eliminate the X27 and X28 express-bus lines.
Mr. Sander said the route alterations “will result in extra transfers, longer travel times, longer wait times and longer walking time.” Trains would be more crowded. Subway cars would be cleaned less frequently. Station booths would be closed. Bus service would be cut back on weekends and at nights. The express-bus fare would rise to $7.50 from $5. The cost of the Access-a-Ride paratransit service for disabled riders would rise.
Not the W!! But I love the W! It is the train that transformed the boring N/R into the snappy N/R/W! What will fill that void now??
Faced with its most severe financial crisis since the 1970s, the Metropolitan Transportation Authority announced plans on Thursday to drastically cut service on its subways, buses and commuter railroads starting in the spring and to impose a 23 percent increase in fare and toll revenue beginning June 1 and another 5 percent increase in 2011.
For New York City Transit, the biggest component of the authority, the deficit-closing plan would eliminate the W and Z subway lines; eliminate service on the M line to Bay Parkway in Brooklyn; shorten the route of the G line, which will permanently stop at Court Square in Long Island City, Queens, instead of 71st and Continental Avenues in Forest Hills, Queens; lower the frequency of most letter-line trains to every 10 minutes from every 8 minutes on weekends; lower the frequency of all trains to every 30 minutes from every 20 minutes from 2 to 5 a.m.; eliminate overnight bus service on 25 routes; and eliminate the X27 and X28 express-bus lines.
Mr. Sander said the route alterations “will result in extra transfers, longer travel times, longer wait times and longer walking time.” Trains would be more crowded. Subway cars would be cleaned less frequently. Station booths would be closed. Bus service would be cut back on weekends and at nights. The express-bus fare would rise to $7.50 from $5. The cost of the Access-a-Ride paratransit service for disabled riders would rise.
Not the W!! But I love the W! It is the train that transformed the boring N/R into the snappy N/R/W! What will fill that void now??
12 November 2008
Jeb is short for... ?? ...Jebremy?
Daily Intel today introduces us to the newest hunk of Treasury eye candy.. and his name is Jeb!
http://nymag.com/daily/intel/2008/11/well_hello_mr_treasury-man.html
Well, Jeb, I'd say the country is safe in your strong, rough hands. Looks like Paulson is going to have some competition in this year's Treasury's Sexiest Man contest...
http://nymag.com/daily/intel/2008/09/breaking_secretary_hank_paulso.html
http://nymag.com/daily/intel/2008/11/well_hello_mr_treasury-man.html
Well, Jeb, I'd say the country is safe in your strong, rough hands. Looks like Paulson is going to have some competition in this year's Treasury's Sexiest Man contest...
http://nymag.com/daily/intel/2008/09/breaking_secretary_hank_paulso.html
11 November 2008
The ironing is delicious
Goldman Sachs, a major underwriter of bonds for the state of California, is now advising some of its trading partners to short those bonds which it previously sold. An excerpt from an article in the LA Times:
http://www.latimes.com/business/la-fi-goldman11-2008nov11,0,1943014.story?dbk
Goldman, Sachs & Co. urged some of its big clients to place investment bets against California bonds this year despite having collected millions of dollars in fees to help the state sell some of those same bonds...
Some experts said the investment bank's actions, while not illegal, might be inappropriate. "That's not a good way to do business," said Geoffrey M. Heal, professor of public policy and business responsibility at Columbia University. "They've got a conflict of interest and they're acting against the interest of their customers. . . . You act in the interests of your clients. You don't screw them, to put it bluntly."
OOOOOHHHHH. No he di'nt!! NO. HE. DI'. NT. "Screw"?! HA. Give 'em Hell, Heal!http://www.latimes.com/business/la-fi-goldman11-2008nov11,0,1943014.story?dbk
10 November 2008
Hahahahaha
Today, Deutsche Bank equity analyst Rod Lache cut his 12-month price target for GM stock to zero, causing shares to plummet to a 59-year low.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aF2FlgNCR5jg&refer=home
Shit... ZERO? I didn't even know you could do that! GM sure does suck. They just plain suck. I've seen companies suck before, but they are the suckiest bunch of sucks that ever sucked!
Barclays Capital and Buckingham Research, ever the glass-half-full optimists, only cut their price targets to $1.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aF2FlgNCR5jg&refer=home
Shit... ZERO? I didn't even know you could do that! GM sure does suck. They just plain suck. I've seen companies suck before, but they are the suckiest bunch of sucks that ever sucked!
Barclays Capital and Buckingham Research, ever the glass-half-full optimists, only cut their price targets to $1.
07 November 2008
Out of the frying pan into the fryer / rock and a hard place / damned if you do, damned if you don't / etc.
Shit just keeps getting worse. GM disclosed today (Friday) that it has suspended merger talks with Chrysler indefinitely, due to its deteriorating cash position. Chrysler, owned by Cerberus, is still single-and-looking, but the likelihood of it finding a suitor is unclear.
http://dealbook.blogs.nytimes.com/2008/11/07/gm-suspends-merger-talks-with-chrysler/
We've all heard this tale before. It's the classic love story. Boy meets girl, boy proposes to girl, boy drops out of merger talks due to deteriorating cash position... poor Chrysler. Don't worry, hun; you keep your head up. You'll find him eventually!
http://dealbook.blogs.nytimes.com/2008/11/07/gm-suspends-merger-talks-with-chrysler/
We've all heard this tale before. It's the classic love story. Boy meets girl, boy proposes to girl, boy drops out of merger talks due to deteriorating cash position... poor Chrysler. Don't worry, hun; you keep your head up. You'll find him eventually!
How to make money in the stock market without really trying
A funny thing happened on the way to the NYSE trading floor. The United States had its worse two-month job loss since 2001. A sign of an impending recession? Perhaps one that has already begun? No, apparently. Not according to equity traders, at least, who are, in the words of the NYTimes, "not letting a barrage of grim economic news get them down."
http://www.nytimes.com/2008/11/08/business/08markets.html?hp
Awwww. Well isn't that nice? The economy may suck shit, but the equity values of the companies that operate in that economy are rising because if they didn't traders would be sad. :( :( :( And we've all seen enough photos of distressed traders to know what an awful tragedy that would be. (At least I have, but if you just can't ever get enough then I recommend this blog: http://sadguysontradingfloors.tumblr.com/)
http://www.nytimes.com/2008/11/08/business/08markets.html?hp
Awwww. Well isn't that nice? The economy may suck shit, but the equity values of the companies that operate in that economy are rising because if they didn't traders would be sad. :( :( :( And we've all seen enough photos of distressed traders to know what an awful tragedy that would be. (At least I have, but if you just can't ever get enough then I recommend this blog: http://sadguysontradingfloors.tumblr.com/)
29 October 2008
Fed cuts benchmark rate; I go, "huh?"
So everyone was expecting the Fed to cut the Fed Funds rate today, and surprise! It did, by half a percentage-point, to the bargain-basement level of one percent. I mean it's nice and all that the Dow went up a bajillion points yesterday, but I wonder if cutting interest rates is really the solution to this problem. First off, is it really going to do anything? The Fed has been lowering rates for the past 18 months and so far, nothin'. Why would it make a difference now?
Secondly, if easy credit was what contributed to the housing bubble in the first place, then isn't lowering rates back to the levels of '03 and '04 just history repeating itself? If this rate cut did actually work, which nobody really thinks it will, then wouldn't that be a bad thing?
And what's the deal with today's WSJ front-page article raising the specter of deflation? DE-flation? Weren't we talking about rapidly rising commodities and food prices like.. two weeks ago? I know oil has come down from its nausea-inducing heights, but it still costs over twice as much a barrel than it did only five short years ago. And don't even get me started on eggs.
Sometimes I think that Ben and the Maiden Lane Boys (my cute new nickname for the Fed, good right?) have just gotten lazy and are falling back on a tried and true, although unfortunately useless, tactic. Remember what happened to Japan, Ben!
http://www.nytimes.com/2008/10/30/business/economy/30fed.html?hp
Secondly, if easy credit was what contributed to the housing bubble in the first place, then isn't lowering rates back to the levels of '03 and '04 just history repeating itself? If this rate cut did actually work, which nobody really thinks it will, then wouldn't that be a bad thing?
And what's the deal with today's WSJ front-page article raising the specter of deflation? DE-flation? Weren't we talking about rapidly rising commodities and food prices like.. two weeks ago? I know oil has come down from its nausea-inducing heights, but it still costs over twice as much a barrel than it did only five short years ago. And don't even get me started on eggs.
Sometimes I think that Ben and the Maiden Lane Boys (my cute new nickname for the Fed, good right?) have just gotten lazy and are falling back on a tried and true, although unfortunately useless, tactic. Remember what happened to Japan, Ben!
http://www.nytimes.com/2008/10/30/business/economy/30fed.html?hp
Subscribe to:
Posts (Atom)
