He’s baack! John Thain takes reins at CIT Group…

Happier Days

Hardly seems fair does it? Ken Lewis loses his spot at BofA, gets civil complaints filed against him by Cuomo, gets grilled by CongressCritters as attorneys drool on their TVs hoping for a magical shareholder class action suit, and Thain walks into a new CEO suite with hardly a scratch.

Vagaries of the dice toss or a deal with Beelzebub? Maybe it’s just that Ken is from Charlotte and John is from The Street? Must be his ‘Goldman’ parachute, heh. FD-MiM are Merrill/BofA shareholders….Our multitude of posts on the BofA Merrill merger and post merger brouhaha here..

Mashup by BluTaiger

NYPost:

John Thain has been chosen to run lender CIT, after a year in which he was ousted from Merrill Lynch and the business lender teetered on the brink.  Thain will start as chairman and chief executive immediately, CIT said late yesterday, replacing interim head Peter Tobin.

Thain, 54, led Merrill for a year, when he was shoved out in January 2009 after the company was bought by Bank of America in a controversial merger. The former president of Goldman Sachs and the New York Stock Exchange has been out of work since.  CIT, a major business lender that expanded into subprime mortgages and student loans during the boom, filed for bankruptcy last year after the government refused to give it a second infusion of rescue funds.

It emerged from bankruptcy in December, after managing to unload more than $10 billion in debt. “Much has been accomplished in recent months to position CIT for renewed success,” Thain said.  CIT executives face compensation restrictions because it received funds from the Troubled Asset Relief Program. According to reports, Thain will receive $500,000 in salary and $5.5 million worth of restricted CIT shares. He could also earn another $1.5 million in restricted shares.

That’s a pittance compared to what he was making at Merrill Lynch. When he joined, the bank agreed to a $44 million compensation package…

You know who should pay the shareholder suits? STANLEY O’NEIL, he destroyed Merrill IMO….

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February 8, 2010. Tags: , , , , , , , , . Economy, Finance, Politics, Popular Culture, TARP, Wall St. Comments off.

Breaking: BofA to pay $33m penalty in settlement…SEC charges BofA with making material false stmts on Merrill deal…CIT Group shares halted for news pending….

Update 5: BofA Spokesman: Ken Lewis ABSOLUTELY has the full support of the Board…

Happier Days...

Happier Days...

Update 4: BofA to pay $33 million penalty as part of settlement. Gee as a shareholder can I get part of that? Suuuure, after all WE are the wronged parties.. AS IF!

BofA is settling the charges, “without admitting or denying guilt”. Well now TAXPAYERS will wind up SOL when shareholders sue…after all we will not allow their capital ratios to fall….Pfft.

Developing via CNBC

Breaking II: Now SEC is charging BofA with making materially false, misleading statements in connection with the Merrill merger….oh boy….

We are shareholders. We have covered this extensively see our posts on Thain/Lewis here and here and here and  here

This is NOT about the failure to use the Material Adverse Change clause to escape the merger, this is the bonus issue Cuomo was on top of…

From Mary Thompson CNBC:

SEC: BofA agreed to pay up to $5.8B in Merill bonuses, contrary to statements in the merger agreement…

Oh Andrew Cuomo must have gotten them in the depositions of Thain and Lewis, oh boy….

Hope to Good Lord it is news of a buyout or capital infusion of some magnitude and not a bankruptcy….

Our previous post on CIT Group here

Okay CIT Group just raised the purchase price on the tender offer.. no biggie.

August 3, 2009. Tags: , , , , , , , , . Economy, Finance, Politics, TARP. 1 comment.

Update: CIT Group files bankruptcy; No Government aid for CIT….Thursday Market Mover: Paulson on the Hill…

Update: 11/2/09:  Bad, sad news, CIT Group went belly-up this weekend despite the 2B taxpayer infusion and the Carl Icahn offer. Bad news for small business. But it is an attempt to dump the debt and live on, so maybe it will live to fight another day.

WSJ:

CIT Group Inc. filed for bankruptcy protection Sunday, in a final attempt to restructure and keep the doors open at the century-old commercial lender.

Now, the lender to nearly a million small and midsize businesses must maintain its customer base as it tries to rehabilitate under Chapter 11 protection. Most financial firms sell off assets or liquidate in bankruptcy amid fears that customers will draw down credit lines and spark a run on the bank.

But CIT garnered support from about 90% of voting debt holders for a prepackaged reorganization plan that could allow the lender to speed through Chapter 11 and emerge with a new business model by year’s end. Under the plan, bondholders will exchange their debt for new debt that matures later, as well as nearly all the equity in a reorganized CIT.

The bankruptcy stay would eliminate some $10 billion in debt from the lender’s balance sheet, the company said. CIT has been weighed down by more than $30 billion in bond debt.

A $2.3 billion taxpayer bailout extended to CIT late last year under the Bush administration will be wiped out in the bankruptcy. Common shareholders will be wiped out, too.

The plan is among the first attempts to restructure a financial firm in bankruptcy court and have it emerge relatively intact. The board approved CIT’s decision to seek Chapter 11 protection in a meeting Sunday. “The board appreciated that this is a [historic] sort of filing,” said a person close to the lender. “It is clearly unprecedented.”…

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Charlie Gasparino is reporting on CNBC’s Kudlow that Sheila (Bair of FDIC) brought the hammer down and drew the line in the sand saying NO MORE BAILOUTS…shxt it would have to be on small business that the money train dried up eh?

Well, we love Sheila here at MiM (we wanted her or Jamie Dimon of JPMC for Treasury)and Timmeh was saying from Saudia Arabia that he was confident they would find a way to do the bailout, so we enjoy it when his toes are stepped on, bitter and petty that’s us today fer shure, BWAAAAHAAAA.

Hope Sheila’s foot met Timmeh’s axx on this one, FDIC should have the too big to fail wipeout authority IMO not the Fed and for Gawds sake not the Treasury….

CNBC on imminent CIT bankruptcy following FDIC and Treasury decision not to bailout…

CIT Group, a major lender to small- and mid-sized U.S. businesses, said on Wednesday that talks with the government to bail out the company had ended, a development that could make bankruptcy likely.

…”Discussions with government agencies have ceased,” the New York-based company said in a statement. “There is no appreciable likelihood of additional government support being provided over the near term.”

The announcement came after last-ditch talks in which Treasury Department had been concerned about a worsening liquidity crunch at CIT over the last few days, and that government aid would not put the lender on a path to recovery….

Tomorrow BIG NEWS will be HANK PAULSON testifying on Capitol Hill about the Merrill BofA shenanigans, should be lots of fun. Hanks is the man who handed free market capitalism over to the government and then retired with hundreds of thousands of Golden Slacks shares…..Hank Hank Hank, when he sees whatis happening now how does he feel? He opened this door and TOTUS swagga’d through it….

Our MANY posts on Hank, Timmeh, AIG, Merrill, BofA, CITIBANK, Sheila, are too numerous to link…

071025_paulson_0

Smashing Pumpins fan made video with footage of Tours in France, courtesy of buissonland

July 15, 2009. Tags: , , , , , , , , , , , , . FDIC, Finance, Music, Obama Administration, Politics. 1 comment.

Making Their Move against the Fed: Bernanke under fire on BofA/Merrill: Email trail…

Okay Ben is under attack, and like it or not, with him the independence of the Federal Reserve. These emails were  leaked to CNBC by Congressional Investigators.

Our previous posts on Thain/Lewis here and here and here

Vodpod videos no longer available.

Insight on the emails leading up to the Bank of America-Merrill deal, with CNBC’s Scott Cohn; Joe diGenova, diGenova & Toensing; and CNBC’s Rick Santelli, Charlie Gasparino & Larry Kudlow.

Team TOTUS would like nothing better than to get Larry Summers in there in 2010, and Congress is lending a helping hand, issuing subpoenas and scheduling hearings, taking testimony from Ken Lewis. AG Cuomo was all over this commensurate with his role as NY AG in training to be Governor…this is going nowhere good…

Happier Days

Happier Days

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June 10, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Obama Administration, Politics, TARP, Wall St. Comments off.

Breaking Update 5: Lewis keeps CEO/President role, Massey elected Chairman as roles split by shareholders…Too many votes to count..Market Movers Wednesday: Bank of America Shareholder Meeting…FED meeting day 2…

Breaking Update 5:- 5:40pm EST: Bloomberg: BofA announces Walter Massey elected as Chairman to replace Lewis;they have split the CEO Chairman roles…Lewis re elected as President/CEO ,…..I think it will be much harder for Treasury to oust Lewis now, the shareholders have acted and kept him as CEO, this loss of Chair ironically may be the thing that saves his job in the end..it would look like the Big Brother trampling shareholders that it is if they try to oust him now…I think this is good for Lewis, and good for the company in that we keep Lewis in this maelstrom of government intervention, Lewis wont get pushed around by Treasury as easily again as he was rolled by Paulson and Bernanke….

Andy Stern of SEIU will be pixxed he didnt get Lewis’ head, heh

Update 4: Hugh McColl says he wants Lewis to stay as CEO and Chariman and Finger who is recommending split also told McColl to merge with AIG when Hugh was CEO…heh….

Breaking Update 3:  – 1:22pm EST- CNBC Mary Thompson reporting- “Person ‘close to’ BofA reporting all 18 BofA board members re elected by comfortable margin”…no further word on Lewis Chairman role yet…

Breaking Update 2- 1:07pm EST: BofA reports it cannot report complete results of shareholder votes today at now..because of the volume of votes. CNBC reporting coming into the meeting BofA was reporting the vote on the proposal to split the CEO Chairman roles was too close to call…they will announce results in Press Release..no word when…

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April 29, 2009. Tags: , , , , , , , , , , , , , , , , , . Economy, Entertainment, FDIC, Finance, Heavy Metal, Music, Politics, Popular Culture, TARP, Uncategorized, Wall St. 3 comments.

Update: Paulson to Lewis on BofA Merrill Merger, An Offer He Couldn’t Refuse?

Update: In Depth View via Bloomberg:

Vodpod videos no longer available.

Our previous posts on the Clash of these Bank, Trading and Finance Titans here

Disclaimer: MiM are Merrill/BofA shareholders, our view is pretty damn biased as a result..

Was Timmeh in the room and in the loop? He was head of NY Fed then, betcha he was in the loop…..

Andrew Cuomo has his teeth in and he has that bulldog lockjaw thing happenin’ as he gets ready to run in 2010, Cuomo v Giuliani would be sweet!

Ken Lewis is SOL, shareholders are rightfully pixxed as all get out if he let Hank bully him into waiving withdrawing form the merger under MAC provisions. Material Adverse Change, which is what the MER losses  were at that point according to Lewis’ testimony to Cuomo

…BUT even if he stood up to Hank and pushed ahead and went to court in DE, Hank is right in what he told Lewis anyway, DE is a tough fight on MAC, and it would have likely turned out BofA could NOT withdraw under MAC as with proper DUE DILIGENCE they should have KNOWN these losses were coming…either way Lewis is Fired CEO Walking…

more about “Paulson to Lewis on BofA Merrill Merg…“, posted with vodpod

April 23, 2009. Tags: , , , , , , , , . Economy, Film, Finance, Politics, Popular Culture, TARP, Uncategorized, Wall St. 1 comment.

Bank of America – Merrill Bonus Smackdown Continues….

Cuomo and Frank send letter of demand to Ken Lewis..

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more about “Cuomo Demands BofA Data – CNBC.com“, posted with vodpod

March 9, 2009. Tags: , , , , , , , , . Economy, Finance, Obama Administration, Politics, Popular Culture, TARP, Taxes, Uncategorized, Wall St. 1 comment.

Deputy Treasury Secretary Nominee Rodgin Cohen, AIG, Goldman Sachs and “What’s Really Scaring Wall St.”

Airtime: Fri. Mar. 6 2009 | 5:04 PM ET The inside scoop of what’s happening at the Treasury, with CNBC’s Charlie Gasparino.

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Kudlow and Gasparino are pretty excited here about WOTS that Rodgin Cohen is being vetted for Deputy Treasury Secretary. WSJ is also excited about it. But several noted voices on the street have a totally different view and note connections to the counterparty risk on AIG ie Golden Slacks, and really can’t we all agree until AIG counterparties are released to the public no more GS employees running Treasury, please?

A MUST READ is Barry Ridholtz’ piece in the Big Picture:

My recent tirade against bailing out the hedge fund half of AIG makes much more sense when you consider who is actually getting all of the taxpayer largesse: Counter-parties of AIG, especially one Goldman Sachs. Some estimates have been in excess of $25 billion to GS.

As AIG ran into the arms of the Fed for the first of 4 bailouts, Bloomberg reported:

“As much as $37 billion from federal bailout loans to American International Group Inc. has gone to investment banks including Goldman Sachs Group Inc., the firm Treasury Secretary Henry Paulson used to run.

-snip-

Could Goldman Sachs dig in any deeper at Treasury?

Yes they can. Over at naked capitalism, Yves has the story of yet another highly conflicted Treasury nominee, Sullivan & Cromwell chairman H. Rodgin Cohen:

Sullivan & Cromwell has long been the outside counsel for Goldman, and outside counsel is a vastly more important role for a securities firm than just about any other type of business. In the stone ages, when I worked for a few years at Goldman, certain S&C partners had so much clout at Goldman that they could get a mid-level banker fired. And even then, “Rodg”, head of the banking practice, was a very influential figure at Goldman.

All for the greater glory of Goldman . . .

From Naked Capitalism:

So Cohen is not only deeply tied to entrenched interests, but he plays a ruthless game, with a mild manner that would lead you not to suspect him of that sort of behavior.

In case you think this reaction is extreme, some e-mail comments from reader Marshall:

We should operate from the assumption that Geithner will always surround himself with the most awful Wall Street cronies imaginable. He’s totally captive to that ideology. This Administration is going to make Warren Harding’s Administration seem like a convention of nuns by comparison.

WSJ has another view entirely:

The news shook us like a thunderclap: banking-lawyer-extraordinaire H. Rodgin Cohen is being considered for a high-ranking role in the Treasury Department. A move would likely mean a departure — at least for now — from Sullivan & Cromwell, where the legendary Cohen has hung his hat for nearly 40 years.

Reports WSJ: “Treasury has identified and is vetting other people for top slots, including H. Rodgin Cohen, chairman of Sullivan & Cromwell LLP and advisor to virtually every firm on Wall Street, for the deputy secretary position, two people familiar with the matter said.”

We placed a call to Cohen, but have yet to hear back.

As noted in this WSJ profile of Cohen last year, he spent one stretch of the fall —“five weeks in hell,” as he put it — advising Fannie Mae, Lehman Brothers., Wachovia, Barclays, AIG, J.P. Morgan and Goldman in a “blitz of mergers, rescues and cash infusions.” Largely for this, he was awarded a, um, highly-coveted slot as one of the LB’s newsmakers of the year.

IOW Cohen knows where the bodies are buried because he helped bury them all.

There was a point at TARP One when it first failed the House when I wanted someone like that.  Not any more, not after the shxtstorm of plans coming down the pike in the Obama Budget, please no more raids.

We do feel under attack, because the middle class is taking it from both sides;  the top clutching their hands around the last vestiges of wealth, while the social engineers in the Capitol plan to take the secret ballot and unionize the country,  will we or nil we, leaving the middle class gasping for oxygen and space in the shrinking economy. Where the hell is the non government GROWTH in the 10 yr Obama Budget?

If they would leave us alone we would buckle down and cut back and get through it like Americans always do, at this point I don’t want any more of their ‘help’, it mostly seems to involve injecting tons of liquidity into institutions that refuse to sell toxic assets for what vultures capital will pay, while the government shovels cash straight from the Federal Reserve with no taxpayer input via Congress, directly into the gaping maw that is the black hole known as AIG.

All to cover the counterparty losses to the very firms who wrote the stupid toxic instruments, ie Goldman Sachs.

Why don’t we call the bluff and try to go it alone now? After throwing 11 trillion in and seeing no end in sight the government needs to force the banks to sell the assets at whatever the vultures will pay, take the losses so we can get past this.

Clearly Team Obama, in their zeal for socialized medicine and welfare programs is afraid to look TOO socialistic upfront on the banks.

They like a more backdoor socialization model which they are working on the stimulus and budget levels, so they won’t do the ONE aspect of socialism that needs doing, taking the banks like the RTC did with Bill Seidman in the 80s selling off the bad paper and putting it back out healthy and whole…

Ironic no?

March 9, 2009. Tags: , , , , , , , , , , , , , . Politics. 1 comment.

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