Some viewers seem to believe that it’s progressive to appreciate a weird, nerdy female loser, but there is nothing especially new about Tina Fey’s attractive, upwardly mobile, wealthy, white, college-educated Liz Lemon.
At the time, traders in London had no real idea that JPMorgan was behind the trades that were skewing the market in credit derivatives. In fact, they weren’t even sure that it was a single bank or trader. But soon the City of London, Europe’s financial hub, was buzzing. Whoever the mysterious trader was, he or she kept selling derivatives intended to rise in value in the event that certain corporate bonds became riskier. The volume of trades was off the charts. Who could possibly sell so much? And, what if the trade reversed, as it inevitably would?
And so the battle lines were drawn. On one side was JPMorgan, the American banking giant that had weathered the financial crisis far better than so many of its peers. On the other were hedge fund managers, including Mr. Weinstein at Saba.
Such standoffs are not uncommon on Wall Street. An aggressive trader makes a wrongheaded bet, then doubles down to scare off competitors on the other side of the trade. Market rivals often get slapped down, unwilling to keep buying as the other side is selling, or vice versa. For traders with the backing of a major bank, like JPMorgan, the task is much easier.
But not always. Sometimes, the other side sits tight, then hits back in force. And it does so in numbers.
Republican candidates declining to sign generally indicate that they nevertheless oppose tax hikes. But some chafe against the constraint on eliminating tax loopholes, believing those restrictions limit Republicans’ ability to negotiate seriously with Democrats on a deal to tackle the nation’s mounting debt.
In Pennsylvania, Republican state Rep. Scott Perry said he was disappointed to see his party’s presidential candidates — all but one of whom signed the pledge — uniformly indicate in a debate last year that they would reject a deficit reduction deal that paired $1 in revenue increases for every $10 in spending cuts.
Lede: “In a new effort to halt more than a year of bloodshed in Syria, President Obama will push for the departure of President Bashar al-Assad under a proposal modeled on the transition in another strife-torn Arab country, Yemen.”
In a region convulsed by political uprisings, Russian leaders are fearful that Syria is their last bastion of influence. Syria is Moscow’s main Middle East ally, home to a Russian naval base and extensive Russian oil and gas investments. It is also a major trading partner and buyer of Russian arms.
“The Russians now consider President Assad a liability,” said Dimitri K. Simes, a Russia expert and president of the Center for the National Interest in Washington. “But Putin doesn’t like having his clients removed one after another by the United States, and he considers Assad his client.”
Second, though, looking for the conflict of interest at the banks/prime brokers is a bit misplaced. The conflict here is basically between people who are long stock and people who want to short it. The longs want it to go up, the shorts want it to go down. To implement those desires, the longs own the stock, and the shorts borrow the stock to sell it short. From whom do they borrow it? Well, sure, their prime brokers, whatever – but the prime brokers are just middlemen. Where do they get it from? In the case of a new IPO, or at least in the case of Facebook, they kind of get it from their imagination, but in general they get it from someone who owns the stock, and even in the IPO that’s sort of the in-expectations case. Where else could they possibly get it?
Two things to keep your eye on are (1) the guy who owns the stock doesn’t have to lend out the stock – many big investors don’t, and (2) the guy who owns the stock and lends it out is facilitating downward pressure on the stock. Presumably the guy who owns the stock wants it to go up, so why is he helping it go down?
At the end of last week, the time came to decide on the IPO price for Facebook’s stock.
This process was handled by Facebook’s lead underwriter, Morgan Stanley, and Facebook executives.
According to one source (unconfirmed), based on the book of orders submitted by both institutional and retail investors, Morgan Stanley found that there were two distinct price levels at which investors were interested in buying stock.
Institutional investors, having digested the news of the underwriter estimate cut, were comfortable buying Facebook stock at $32 a share.
Retail investors, meanwhile, who were presumably unaware of the estimate cut, were comfortable buying Facebook at $40 a share.
Knowing that a big percentage of the IPO stock could be sold to retail investors instead of institutional investors, Facebook and Morgan Stanley decided to price the IPO at $38.
This particular comment was lobbed at me primarily from aggrieved straight white males. Leaving aside entirely that the piece was neither, let me just say that I think it’s delightful that these straight white males are now engaged on issues of racism and sexism. It would be additionally delightful if they were engaged on issues of racism and sexism even when they did not feel it was being applied to them — say, for example,when it’s regarding people who historically have most often had to deal with racism and sexism (i.e., not white males). Keep at it, straight white males! You’re on the path now!
On the morning of Feb. 20, 2011, a man from Singapore walked into the central police station of Rovaniemi, Finland, a town that sits along the Arctic Circle. The man told officers that another Singaporean, Wilson Raj Perumal, was in Rovaniemi on a false passport. He offered no other information before leaving the station abruptly.
Though puzzled by the seemingly random tip, Rovaniemi police put Perumal under surveillance. Three days later, they followed him to a French restaurant near the soccer stadium, where the local club, Rovaniemen Palloseura, had just completed a 1-1 draw. Officers watched as Perumal sat down with three Palloseura players. They saw him scold the players, who cowered in fear. The next day, based on the false passport, the Finnish police detained Perumal. They phoned officials at the Finland Football Federation, who in turn contacted FIFA, soccer’s international governing body.
One week later, Chris Eaton, FIFA’s head of security, arrived in Rovaniemi. He knew exactly who Perumal was. Eaton informed Finnish investigators that they had just caught the world’s most prolific criminal fixer of soccer matches, an elusive figure whom Eaton had been chasing for the past six months.
In effect, JPMorgan Chase operates with the implicit backing of the United States government – primarily in the form of actual and potential access to borrowing from the Federal Reserve, with the implication that the Treasury could also provide support. Being effectively backed by the full faith and credit of the government is a great help; it lowers a bank’s funding costs because it reduces the risk to creditors. JPMorgan Chase and the other big banks in the American economy are effectively government-sponsored (and subsidized) enterprises.
There is no kind of market involved in determining the franchise value of mega-banks; this is a government subsidy scheme, pure and simple. …
In an article about hierarchical issues within JP Morgan that led to their huge trading loss this quarter, it’s interesting to see a higher-than-normal number of women employees and questionable actions by both genders—as well as Lyme disease—treated with an even-hand. Even as is the whole thing seems like egos run amok.
“I have been thinking about that opening question for weeks — would I be the same person if I had been born male? — and can’t even really imagine it. It’s not just the male body, a body that, while I enjoy my proximity to one, I don’t really understand. It’s the impossible pressure to conform. It seems to me, from afar, that men must choose a subculture and mold themselves accordingly. They are not encouraged to drift between as women are. I’ve read enough gender theory to be able to parrot simple reductions like “femininity is a performance” whenever appropriate. But masculinity is a performance, too, and it seems like a much less fun performance.”—
We’ll let others focus on the blow-by-blow today. … What we found more interesting was the rash of insider trading-related forms filed late yesterday. We counted 39, which was significantly higher than those filed by Google (GOOG) insiders prior to its IPO in August 2004. Four of those were filed by various entities tied to Goldman Sachs. Digital Sky Technologies, an early investor, accounted for another 5 insider forms.
As for the individuals, the filings come from some names you’ve undoubtedly heard a lot about lately, including new Singaporean citizen Eduardo Saverin, who according to this Form 3 that was filed at 8:41 pm last night, owns 53.1 million shares. (That’s $2.02 billion at $38 a share.)
The other thing we found interesting was this confidential treatment order(PDF) seeking to shield three exhibits, filed late yesterday. Because the CT order was granted, we have no idea what’s in those agreements, but we do know that exhibits starting with the number 10 are material contracts, and usually worth paying attention to. We took a quick look back to see what other high profile IPOs had been granted CT requests on the eve of their IPOs and it was a mixed bag: Zynga (ZNGA) and Zillow (Z), both of which went public last year, filed CT orders on the day they went public. So did LinkedIn. But Google, Amazon (AMZN), eBay (EBAY) and Groupon (GRPN) didn’t. (In fact, Google and Amazon have never filed for a confidential treatment order.)
As posted by Dan Ariely, due to the ties about ethical behavior.
As the lead bank on your deal, Morgan Stanley is likely to get 30% of the overall take. This means that your closest investment banking “friend” will make a bit more than $200 million from your IPO.
Morgan Stanley and the rest of the investment banks involved will also make sure that their favorite fund manager client “friends” are given lots of free money. Assuming that these “friends” are given 75% of the total number of IPO shares, or a total of 291 million shares, and assuming that the stock does rise from $40 to $50, then these fund managers will collectively, in one day, make $2.9 billion dollars in realized or unrealized profits. That’s right, 2.9 BILLION DOLLARS.
Mark, by now you must be asking yourself the obvious question. “Where and out of whose pocket does this money come from?”
A message from the President/Treasurer/Grand Poobah of Why Not ZoidPAC?, filed at around 2:30 a.m.:
To Whom I May Concern: This memo is primarily intended as a test: I recognize the gravity generally attached to something like the submission of a form to the FEC, but I wanted to confirm for myself that the Federal Elections Comission lives up to its lofty goal of transparency.
It recently occurred to me that as President, Grand Poobah, and (most importantly here, anyway) Treasurer of the Why Not ZoidPAC? Super PAC, I possess the ability to submit these Form 99s electronically and have them displayed publicly at http://query.nictusa.com/cgi-bin/fecimg/?C00514646 . I also understand that these forms are primarily meant as written statements addressing the FEC directly; however, I don’t see how or why I should be limited against using this kind of form to make a publicly recorded note of assorted positions and opinions I wish to share.
I suppose my question to you, the FEC filer reading this form, is: is this OK? I don’t see many examples (any, really) of this sort of thing, but it seems like an intriguing way to submit positions and ideas to the public record on behalf of Why Not ZoidPAC.
Should this be allowed to work, I’d like to address the few hypothetical people who might have somehow discovered this document through the public filing. Hello, to you as well! I suppose this is kind of like a blog post to you. We’ll see.
Whomever may be reading this, thank you for your time.
President/Treasurer/Grand Poobah, “Why Not ZoidPAC?