Two fine finance reporters, Bethany McLean and Joe Nocera, collaborated on a Merrill Lynch-centric re-working of the story of the financial crisis of 2008, and the result appears in the November issue of Vanity Fair.
McLean has previously distinguished herself by getting the Enron story right before anyone else. She wrote "Is Enron Overpriced," which ran in FORTUNE on March 2001.
That story began with a meditation on the term "it," as in the It Girl in Hollywood talk, or "the It Stock" for Enron at the turn of the millennium. The story proceeded to this:
And the numbers that Enron does present are often extremely complicated. Even quantitatively minded Wall Streeters who scrutinize the company for a living think so. "If you figure it out, let me know," laughs credit analyst Todd Shipman at S&P. "Do you have a year?" asks Ralph Pellecchia, Fitch's credit analyst, in response to the same question.
Nocera? Well, I wrote of him in this very space quite recently and before I knew anything of his collaboration with McLean.
Anyway, you can use the first link above to click on their Vanity Fair article. Please do.
Showing posts with label Merrill Lynch. Show all posts
Showing posts with label Merrill Lynch. Show all posts
06 November 2010
30 October 2009
Random bit of history
This is the first anniversary of a memorable on-camera zone-out incident involving Charles Gasparino, an editor at the business-oriented cable channel CNBC.
On their regular late-afternoon program, "Closing Bell," anchor Dylan Ratigan introduced CG, obviously under the impression that CG was in possession of some new important information about Merrill Lynch.
The camera then framed Charles with the words "Management turmoil continues at Merrill Lynch" bannered beneath his face, because the producers (and anchor Dylan Ratigan) were obviously under the impression that Gasparino was in possession of some important information abotu that subject.
If he was, he never did get around to telling the world about it. Apparently, he took offense at the way he was introduced, the open-ended phrase "what do ya got?" -- what followed was an extremely odd colloquy over the Zen-like nature of that expression.
The reason this is worth noting is that Gasparino has a new book out, specifically about those frantic days of last autumn in the US capitalist system. Maybe he'll explain to us whatever it was that his zone-out kept him from saying that day on camera.
On their regular late-afternoon program, "Closing Bell," anchor Dylan Ratigan introduced CG, obviously under the impression that CG was in possession of some new important information about Merrill Lynch.
The camera then framed Charles with the words "Management turmoil continues at Merrill Lynch" bannered beneath his face, because the producers (and anchor Dylan Ratigan) were obviously under the impression that Gasparino was in possession of some important information abotu that subject.
If he was, he never did get around to telling the world about it. Apparently, he took offense at the way he was introduced, the open-ended phrase "what do ya got?" -- what followed was an extremely odd colloquy over the Zen-like nature of that expression.
The reason this is worth noting is that Gasparino has a new book out, specifically about those frantic days of last autumn in the US capitalist system. Maybe he'll explain to us whatever it was that his zone-out kept him from saying that day on camera.
31 October 2008
Strangeness from Gasparino
Charles Gasparino zoned out on camera yesterday. Or at least, that's one way to read this YouTube clip.
CG, as many of you must know, is an on-air editor at the business-oriented cable channel CNBC.
On their regular late-afternoon program, "Closing Bell," anchor Dylan Ratigan introduced CG, obviously under the impression that CG was in possession of some new important information about Merrill Lynch.
The camera then framed Charles with the words "Management turmoil continues at Merrill Lynch" bannered beneath his face.
But whatever news or rumor Charles had been ready to convey on that subject never got out to us. Apparently, he took offense at the way he was introduced, the open-ended phrase "what do ya got?" -- what followed was an extremely odd colloquy over the Zen-like nature of that expression.
When Dylan tired of this, he told Charles that he didn't have all day, here's a "capitalist system" to cover.
Charles replied, "shoot to the capitalist system," an expression I've never heard. I would assume he meant, "then cut to your other stories about the capitalist system, because I don't really have anything about Merrill."
Dylan replied by repeated Charles' words while dropping the preposition: "shoot the capitalist system??"
Watch it yourself. Tell me what the heck you think was going on, and how safe can Charles' job be.
CG, as many of you must know, is an on-air editor at the business-oriented cable channel CNBC.
On their regular late-afternoon program, "Closing Bell," anchor Dylan Ratigan introduced CG, obviously under the impression that CG was in possession of some new important information about Merrill Lynch.
The camera then framed Charles with the words "Management turmoil continues at Merrill Lynch" bannered beneath his face.
But whatever news or rumor Charles had been ready to convey on that subject never got out to us. Apparently, he took offense at the way he was introduced, the open-ended phrase "what do ya got?" -- what followed was an extremely odd colloquy over the Zen-like nature of that expression.
When Dylan tired of this, he told Charles that he didn't have all day, here's a "capitalist system" to cover.
Charles replied, "shoot to the capitalist system," an expression I've never heard. I would assume he meant, "then cut to your other stories about the capitalist system, because I don't really have anything about Merrill."
Dylan replied by repeated Charles' words while dropping the preposition: "shoot the capitalist system??"
Watch it yourself. Tell me what the heck you think was going on, and how safe can Charles' job be.
01 February 2008
Three brief items
First, Dan Rather.
His lawsuit against CBS for wrongful termination will likely go forward -- it has survived a motion to dismiss. I can't help but be happy about this, as I think the proceedings may help unearth testimony and documents that will in turn prove useful for the historians of the future as they struggle with this period in the history of the United States.
Rather, you will remember, narrated a report on the CBS evening news that said that George W. Bush shirked his duties while in the National Guard.
The authenticity of the documents came under attack, and CBS apologized for the report, expelling Rather from the anchor chair.
Rather maintains that the report was, in essence though not in every particular, accurate. He also says that he was made a scapegoat because the parent corporation of CBS, Viacom, was seeking regulatory favors from the Bush administration and had to hide the whole AWOL issue under the nearest rug.
CBS' lawyers made a motion to dismiss. No definitive decision has yet issued from the bench on that motion, but the judge has indicated he is inclined to let the matter proceed to discovery, that there is "enough in the complaint" to do so. Good for him.
Second, Crude Oil Prices.
How low will they go? And is their recent decline a good sign or a bad one? Just wondering.
You'll likely all remember that when crude prices were bumping up against $100 a barrel in the final days of 2007 that fact was covered extensively in all news media. This is natural enough: my attention tends to focus on my car's odometer as the zeros line up!
With odometers, the numbers only move in one direction. With prices, the general tendency is toward an inflation of the currency (given the fiat nature of money since the demise of the gold standard) and thus toward higher prices, but there's some non-odometer like downward movement too.
And that's what we've had. On Nymex, the spot price of a barrel of oil is now barely above $90. Is this good news or bad? Good if it amounts to a lifting of a drag upon the economy. Bad if it is symptom a symptom of a slowing-down already underway. After all, if there's going to be a lot less industrial activity in coming months, there's going to be a reduction in the demand for energy in all its forms, and the decline may simply reflect that.
Third, Springfield, Mass.
Springfield appears to have gotten away with something. For the background, go here.
Springfield has apparently persuaded Merrill Lynch that it has a case that somebody at Merrill tricked somebody in Springfield's city government into signing on to some highly speculative investments. Accordingly, Merrill has agreed to by the securities at issue back from the city at the same price at which it sold them.
This is quite a bath Merrill is taking. Those securities have lost 90% of their value since the sale, last spring, now being revoked.
Merrill has also agreed to pay outside legal fees incurred by the Springfield Finance Control Board.
This stinks. Has anybody associated with any institution ever heard the phrase "moral hazard"?
So of my three items for today, I find the first cheery, the second ambiguous, and the third depressing. A balanced portfolio of news items!
His lawsuit against CBS for wrongful termination will likely go forward -- it has survived a motion to dismiss. I can't help but be happy about this, as I think the proceedings may help unearth testimony and documents that will in turn prove useful for the historians of the future as they struggle with this period in the history of the United States.
Rather, you will remember, narrated a report on the CBS evening news that said that George W. Bush shirked his duties while in the National Guard.
The authenticity of the documents came under attack, and CBS apologized for the report, expelling Rather from the anchor chair.
Rather maintains that the report was, in essence though not in every particular, accurate. He also says that he was made a scapegoat because the parent corporation of CBS, Viacom, was seeking regulatory favors from the Bush administration and had to hide the whole AWOL issue under the nearest rug.
CBS' lawyers made a motion to dismiss. No definitive decision has yet issued from the bench on that motion, but the judge has indicated he is inclined to let the matter proceed to discovery, that there is "enough in the complaint" to do so. Good for him.
Second, Crude Oil Prices.
How low will they go? And is their recent decline a good sign or a bad one? Just wondering.
You'll likely all remember that when crude prices were bumping up against $100 a barrel in the final days of 2007 that fact was covered extensively in all news media. This is natural enough: my attention tends to focus on my car's odometer as the zeros line up!
With odometers, the numbers only move in one direction. With prices, the general tendency is toward an inflation of the currency (given the fiat nature of money since the demise of the gold standard) and thus toward higher prices, but there's some non-odometer like downward movement too.
And that's what we've had. On Nymex, the spot price of a barrel of oil is now barely above $90. Is this good news or bad? Good if it amounts to a lifting of a drag upon the economy. Bad if it is symptom a symptom of a slowing-down already underway. After all, if there's going to be a lot less industrial activity in coming months, there's going to be a reduction in the demand for energy in all its forms, and the decline may simply reflect that.
Third, Springfield, Mass.
Springfield appears to have gotten away with something. For the background, go here.
Springfield has apparently persuaded Merrill Lynch that it has a case that somebody at Merrill tricked somebody in Springfield's city government into signing on to some highly speculative investments. Accordingly, Merrill has agreed to by the securities at issue back from the city at the same price at which it sold them.
This is quite a bath Merrill is taking. Those securities have lost 90% of their value since the sale, last spring, now being revoked.
Merrill has also agreed to pay outside legal fees incurred by the Springfield Finance Control Board.
This stinks. Has anybody associated with any institution ever heard the phrase "moral hazard"?
So of my three items for today, I find the first cheery, the second ambiguous, and the third depressing. A balanced portfolio of news items!
19 January 2008
Springfield, Mass.
The Wall Street Journal gives prominent play in its weekend edition to the financial troubles of Springfield, Mass.
Springfield received a coat of red ink two months ago when its financial adviser, Merrill Lynch, informed it that the city's stake in three CDO portfolios had been marked down. That stake had been worth $13.9 million as recently as July. But by November, Merrill valued it as worth less than 9% of that, or $1.2 million.
City officials are ticked off about this. And they aren't blaming themselves. They aren't kicking the furniture in their office while saying, "Dang! There we go making investments of taxpayers' money without doing proper due diligence and ascertaining the risks first," and offering to resign in disgrace. No ... any such reaction has as yet failed to make the news.
Instead, the broker is obviously to blame. The story quotes Christopher Gabrieli, chairman of the city's Finance Control Board (i.e. the guy who should be doing the mostdamage to his foot whilst kicking that furniture right now) saying: "I believe Merrill Lynch is responsible and will be obliged, in the end , to restore the city's money."
Here'ssome background on Mr. Gabrieli.
Another bigwig at the Finance Control Board (though I gather his name goes below Mr. Gabrieli's on the org chart) is Stephen P. Lisauskas, the FCB's executive director. According to a story in the Springfield Republican today, a member of the city council has charged that Lisauskas is a personal friend of an agent at Merrill Lynch involved in this choice of investment, Carl J. Kipper.
From what I can tell, the councilman seems to be straining at a scandal but hasn't found anything. It isn't illegal or unethical for friends to do business together. If the friends have fiduciary obligations, and they let their personal ties get in the way of fulfilling those obligations ... there is a problem. But we haven't seen that yet.
The bottom line, for me, is that Springfield's finance officials give all indication of being responsible adults who made rational though risky decisions. I don't think they have recourse against Merrill, nor do I think the council has recourse against them.
If you can't run with the big dogs, stay on the porch. You'll find the concise Latin tag for that sentiment among the labels for this post.
Springfield received a coat of red ink two months ago when its financial adviser, Merrill Lynch, informed it that the city's stake in three CDO portfolios had been marked down. That stake had been worth $13.9 million as recently as July. But by November, Merrill valued it as worth less than 9% of that, or $1.2 million.
City officials are ticked off about this. And they aren't blaming themselves. They aren't kicking the furniture in their office while saying, "Dang! There we go making investments of taxpayers' money without doing proper due diligence and ascertaining the risks first," and offering to resign in disgrace. No ... any such reaction has as yet failed to make the news.
Instead, the broker is obviously to blame. The story quotes Christopher Gabrieli, chairman of the city's Finance Control Board (i.e. the guy who should be doing the mostdamage to his foot whilst kicking that furniture right now) saying: "I believe Merrill Lynch is responsible and will be obliged, in the end , to restore the city's money."
Here'ssome background on Mr. Gabrieli.
Another bigwig at the Finance Control Board (though I gather his name goes below Mr. Gabrieli's on the org chart) is Stephen P. Lisauskas, the FCB's executive director. According to a story in the Springfield Republican today, a member of the city council has charged that Lisauskas is a personal friend of an agent at Merrill Lynch involved in this choice of investment, Carl J. Kipper.
From what I can tell, the councilman seems to be straining at a scandal but hasn't found anything. It isn't illegal or unethical for friends to do business together. If the friends have fiduciary obligations, and they let their personal ties get in the way of fulfilling those obligations ... there is a problem. But we haven't seen that yet.
The bottom line, for me, is that Springfield's finance officials give all indication of being responsible adults who made rational though risky decisions. I don't think they have recourse against Merrill, nor do I think the council has recourse against them.
If you can't run with the big dogs, stay on the porch. You'll find the concise Latin tag for that sentiment among the labels for this post.
04 January 2008
Joe McGinniss
I just bought Joe McGinniss' latest book, NEVER ENOUGH.
McGinniss is best known as a "true crime" author: more highbrow than Ann Rule, but with lower brows than Truman Capote.
McGinnis' contributions in this area have come with two-word titles: adjective noun.
There's been: Fatal Vision, Blind Faith, Cruel Doubt.
Never Enough is a bit of a departure there. The number of words is right, but its "adverb adjective" this time. The unspoken noun is "wealth," which is modified by "enough" which is modified in turn by "never."
The gist of the book is the "milkshake murder" in Hong Kong in 2003. A very prominent investment banker -- Robert Kissell, one of Merrill Lynch's expat American stars in east Asia -- was bludgeoned to death by his wife, Nancy Kissel, nee Keeshin, after she had first secured against the possibility of resistance, feeding him a milkshake filled with sedatives.
McGinniss' books follow a consistent pattern. An apparently "perfect marriage" is in fact riven with conflict and hatred, unbeknowst to the outside world. Suddenly, one spouse is dead, and the other seeks to blame outsiders/intruders or write it off as a mysterious disappearance. But investigators tear apart that effort, get to the truth, and the murdering spouse is convicted.
That pattern would have made McGinniss a natural chronicler of the OJ Simpson case, but for the acquittal -- which is never the ending he wants.
If I find anything extraordinary in this book, I'll let you know here.
McGinniss is best known as a "true crime" author: more highbrow than Ann Rule, but with lower brows than Truman Capote.
McGinnis' contributions in this area have come with two-word titles: adjective noun.
There's been: Fatal Vision, Blind Faith, Cruel Doubt.
Never Enough is a bit of a departure there. The number of words is right, but its "adverb adjective" this time. The unspoken noun is "wealth," which is modified by "enough" which is modified in turn by "never."
The gist of the book is the "milkshake murder" in Hong Kong in 2003. A very prominent investment banker -- Robert Kissell, one of Merrill Lynch's expat American stars in east Asia -- was bludgeoned to death by his wife, Nancy Kissel, nee Keeshin, after she had first secured against the possibility of resistance, feeding him a milkshake filled with sedatives.
McGinniss' books follow a consistent pattern. An apparently "perfect marriage" is in fact riven with conflict and hatred, unbeknowst to the outside world. Suddenly, one spouse is dead, and the other seeks to blame outsiders/intruders or write it off as a mysterious disappearance. But investigators tear apart that effort, get to the truth, and the murdering spouse is convicted.
That pattern would have made McGinniss a natural chronicler of the OJ Simpson case, but for the acquittal -- which is never the ending he wants.
If I find anything extraordinary in this book, I'll let you know here.
28 December 2007
"Welcome to the helm, Mr. Murdoch"
This summer, News Corp. (the corporate parents of Rupert Murdoch's various newspapers and the Fox broadcasting properties) agreed to buy Dow Jones, the famous keeper-of-stock-indexes, and publisher of the Wall Street Journal. The price tag was $5.6 billion.
Months elapsed, though, between agreement and the closing of the deal. The latter took place earlier this month.
Anyway, the WSJ may have decided to welcome him with a bit of controversy, because November saw a memorable screw-up in a front-page story in which the Journal accused the giant broker-dealer Merrill Lynch of accounting shenanigans, then had to back down, issuing a correction.
On Nov. 2, the Journal alleged that Merrill had participated in transactions with hedge funds designed to cover up and delay the reporting of its losses on collateralized debt obligations. That article's only specific example of one of the supposed off-balance-sheet deals had been a deal in which the broker-dealer allegedly sold mortgage securities to a fund, while providing that the fund would have the right to sell the securities back to Merrill after one year for a guaranteed return. This deal did have the smell to it of the old "Nigerian barge" transactions of Enron scandal memory. Class-action lawsuits by and on behalf of Merrill stockholders have since prominently referenced that publication.
Merrill Lynch's stock price (NYSE: MER) as of the close of business Nov. 1 was $62.19 per share. By the end of trading on Nov. 2, it was at $57.28. Merrill's price continued to fall through two and a half more weeks, closing at $51.81 on Nov. 21.
The following Monday, good news arrived, in the form of a "correction and amplification" by the Journal, in which the paper acknowledged that its Nov. 2 article had been based on incorrect information. The correction focused on the only specific instance the original article had purported to produce -- that sale and buy-back.
In its later note, the Journal said that while Merrill did "propose" such a deal, it was never completed, because "the firm's finance department determined it didn't meet proper accounting criteria." This has a much more hygienic odor, suggesting simply that some risk manager or compliance officer was on the ball.
Murdoch's detractors can say if they like that it was the dispiriting influence of his looming captaincy that created such a gaffe. His admirers can say, "this is the sort of thing that he's coming in to fix!"
Say what you will, it seems like a big black eye to me. And I think it might be time for those of us accustomed to a fix of market-oriented news each morning to switch to the Financial Times.
Months elapsed, though, between agreement and the closing of the deal. The latter took place earlier this month.
Anyway, the WSJ may have decided to welcome him with a bit of controversy, because November saw a memorable screw-up in a front-page story in which the Journal accused the giant broker-dealer Merrill Lynch of accounting shenanigans, then had to back down, issuing a correction.
On Nov. 2, the Journal alleged that Merrill had participated in transactions with hedge funds designed to cover up and delay the reporting of its losses on collateralized debt obligations. That article's only specific example of one of the supposed off-balance-sheet deals had been a deal in which the broker-dealer allegedly sold mortgage securities to a fund, while providing that the fund would have the right to sell the securities back to Merrill after one year for a guaranteed return. This deal did have the smell to it of the old "Nigerian barge" transactions of Enron scandal memory. Class-action lawsuits by and on behalf of Merrill stockholders have since prominently referenced that publication.
Merrill Lynch's stock price (NYSE: MER) as of the close of business Nov. 1 was $62.19 per share. By the end of trading on Nov. 2, it was at $57.28. Merrill's price continued to fall through two and a half more weeks, closing at $51.81 on Nov. 21.
The following Monday, good news arrived, in the form of a "correction and amplification" by the Journal, in which the paper acknowledged that its Nov. 2 article had been based on incorrect information. The correction focused on the only specific instance the original article had purported to produce -- that sale and buy-back.
In its later note, the Journal said that while Merrill did "propose" such a deal, it was never completed, because "the firm's finance department determined it didn't meet proper accounting criteria." This has a much more hygienic odor, suggesting simply that some risk manager or compliance officer was on the ball.
Murdoch's detractors can say if they like that it was the dispiriting influence of his looming captaincy that created such a gaffe. His admirers can say, "this is the sort of thing that he's coming in to fix!"
Say what you will, it seems like a big black eye to me. And I think it might be time for those of us accustomed to a fix of market-oriented news each morning to switch to the Financial Times.
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