Category Archives: banking

Why Citi’s 11% Coupon Doesn’t Mean it’s Paying Junk Rates

I didn’t actually post my first entry of the day at 10:20 this morning, honest: Movable Type seems to have eaten my real first post, about the Abu Dhabi investment in Citigroup. My blog entry compared the 11% coupon on … Continue reading

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Capital Infusion Datapoint of the Day

Coupon on the convertible bonds Bank of America bought to help shore up Countrywide: 7.5% Coupon on the convertible bonds Abu Dhabi bought to help shore up Citigroup: 11%

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Meme of the Day: Liquidity Puts and CDOs

Are you sick of the liquidity put yet? You shouldn’t be, because it’s only getting more and more interesting. There are three articles worth reading on the subject today, starting with David Reilly’s WSJ column on whether Citigroup should move … Continue reading

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WSJ Admits its Merrill Story was False

Do you remember those heady days at the beginning of November when the WSJ went on the warpath? First there was the failed take-down of Jimmy Cayne (he plays golf!), and then, the next day, came a front-page article by … Continue reading

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Leveraged Super Senior Trades and the Liquidity Put

On Wednesday I said that the notorious "liquidity put", which was allegedly responsible for tens of billions of dollars in Citigroup losses, was "really nothing more than a CP backstop". Today we’re learning a lot about something known as leveraged … Continue reading

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Why The Safest Banks Saw the Biggest Losses

Jenny Anderson today runs down the list of winners and losers in terms of subprime losses. Winners (or at least banks with relatively small losses): Goldman Sachs; Credit Suisse; Lehman Brothers; JP Morgan. Losers: UBS; Merrill Lynch; Citigroup. Anderson concludes: … Continue reading

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The Entity Quote of the Day

From an anonymous fund manager, via John Carney: "B of A is the Stupid Bank. Citi is the Incompetent Bank. JP Morgan is Villainous. The super SIV is Stupid, Incompetent and Villainous."

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Sam Jones Explains the Liquidity Put

The FT’s Sam Jones puts two and two together today and finally explains what the notorious liquidity put is. You might recall that a couple of weeks ago he told us about CDOs which issued commercial paper. I noted at … Continue reading

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Did Anyone Other Than Citigroup Have Liquidity Puts?

Why hasn’t this "liquidity put" thing gotten greater play? I never made it down to the 11th paragraph of Carol Loomis’s interview with Bob Rubin, where she introduces the concept more than 900 words into her article. Floyd Norris, today, … Continue reading

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UBS: Waiting for the CDO Shoe to Drop

UBS had over $24 billion in gross CDO exposure at the end of October – much more than any other bank bar Citi. Yet its writedowns to date amount to just $3.1 billion, or 13% of that exposure. By contrast, … Continue reading

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The Goldman Sachs Special Sauce

What’s the difference between Goldman Sachs and all the other investment banks? You know, aside from that whole profitability thing. The answer seems to be that where other banks have org charts, Goldman has managers. It’s unthinkable that Goldman would … Continue reading

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The John Thain FAQ

Many questions accompany John Thain’s appointment as CEO of Merrill Lynch. Here are just some of them: Will Thain be chairman, too? Almost certainly, yes. Whither BlackRock’s Larry Fink, now he’s been passed over for the job as Merrill CEO? … Continue reading

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Wall Street: Still Insanely Profitable

Bloomberg is running a story headlined "A $45 Billion Writedown Won’t Stop Wall Street Profit", saying that Wall Street is poised to have its second-most-profitable year on record, despite those $45 billion in writedowns: Amid the gloom, analysts estimate New … Continue reading

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Blackstone vs Goldman, Subprime Edition

November 12: Blackstone President and Chief Operating Officer Hamilton James said on Monday Blackstone is starting to "go long" the subprime market, after a successful bet against the sector that played out over the last 18 months. November 13: Goldman … Continue reading

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E*Trade: In Defense of Prashant Bhatia

Just as one shouldn’t shout "fire" in a crowded theater, one shouldn’t shout "run on the bank" in an analyst’s report. If you do that, as Citigroup’s Prashant Bhatia notoriously did in his report on E*Trade, you risk your report … Continue reading

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Emilio Botin for Citigroup CEO!

Chalk up another victory for Santander’s Emilio Botín. When I said last month that he was the big winner in the Battle of ABN Amro, I was concentrating mainly on Banco Real, the Brazilian bank that Santander now owns. But … Continue reading

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Toxic Waste Watch: Beware CDO-backed ABCP!

Since when do CDOs borrow money? I’m obviously rather behind the curve here, since I thought that a CDO was basically an unlevered entity which invested in debt. When it got income from that debt, the income would go first … Continue reading

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How to Address a Goldman Sachs Banker

Goldman Sachs is building a new headquarters building which will carry the address 200 West Street. It’s on the west side of the street, on the block between Vesey and Murray. But if you plug the address into Google Maps, … Continue reading

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Wall Street Bonus Watch

Jesse Eisinger emails to say that he’s hopeful about winning our bonus bet, in the wake of stories today in the WSJ and the NYT. Both of them report on projections from executive-compensation experts Options Group and Johnson Associates, and … Continue reading

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Shaukat Aziz as Citigroup CEO!

The Economist places its weight behind Shaukat Aziz as the ideal CEO of Citigroup: The 58-year-old joined Citibank in 1969, and worked in various parts of its global empire—including Britain, Greece and Malaysia—before eventually becoming global head of Citi’s private … Continue reading

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Citi: In Defense of Gary Crittenden

Brad DeLong takes a cheap shot at Citigroup’s CFO, Gary Crittenden, who on the Citigroup conference call tried to explain where all those extra write-downs were coming from. Crittenden explained that much of Citi’s subprime exposure was in so-called super-senior … Continue reading

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Citi: Is Stuckey Too Constrained?

Jules: You sendin’ The Wolf? Marsellus: Feel better? Jules: Shit Negro, that’s all you had to say. Rick Stuckey is the Winston Wolf of the financial world, screeching into problem areas and cleaning them up with great professionalism and no … Continue reading

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Mark-to-Model on Wall Street: The Numbers

Nouriel Roubini hoists a nice piece of detective work from his comments: Bernard has gone down the list of Wall Street banks, looking at how much they have in the way of level 3 ("mark to model") assets, compared to … Continue reading

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Citigroup Datapoint of the Day

Floyd Norris: We may be approaching a time when Citi’s stock would do better if it did eliminate the dividend… Such a cut would save the company $10.8 billion a year. As it happens, that is just about the amount … Continue reading

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Citi: Prince’s Ouster Ungags Bartiromo

Maria Bartiromo waited until Chuck Prince had left the building to start criticizing him on the record for his role in bad-mouthing her earlier this year. (You might recall no little innuendo about her relationship with the head of Citi’s … Continue reading

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