reputation

Greenspan's reputation suffers in crunch

Jim Kim — Fri, 24 Oct 2008 07:44:27 -0400

Alan Greenspan was once considered a central banker nonpareil, a man feared and respected. But that reputation is long gone. His legacy is getting trashed, and once-whispered reservations are breaking into the open. At a Congressional hearing this week, he admitted he was "partially" at fault for the credit bubble now popping. His light-regulation only philosophy, in the eyes of some, led directly to the mess we're now in. Sure, the economy kept humming along, but we're now seeing the costs. The questioning, reports the New York Times, was "one of the harshest grillings of his life." Greenspan sounded contrite, but the damage to his reputation mounts. CNN already made him No. 6 on its list if Culprits of the Collapse.

For more:
- here's the New York Times article

David Einhorn taking some hard lumps

Jim Kim — Mon, 06 Oct 2008 11:33:57 -0400

David Einhorn's stature soared when he laid a spectacularly winning short bet on Lehman Brothers--in full view of the world. But that glow has faded. Fortune notes that Einhorn's firm, Greenlight Capital, lost 11.5 percent in an offshore fund. Another of its funds is faring equally as bad. He's certainly not the only hedge fund manager to take some lumps in this credit crunch. The fact is that, despite his reputation, Greenlight is not a short fund. It longs a whole lot of stuff that has apparently soured as of late. What really matters here is how fund investors react. You can bet Einhorn and others are working their clients hard right now. This is a time when all your investment in relationships can pay off. The worst thing that can happen is that they head for the doors at once.

For more:
- here's the Fortune article

Bank of America CEO faces shareholders

Thu, 24 Apr 2008 06:59:57 -0400

Bank of America CEO Ken Lewis took his turn before his shareholders. The questions were a bit shrill apparently, but he and his directors, like their big bank peers, managed to survive. Not that survival really was ever in doubt for any of the the top execs and directors. Still, the tone of annual meetings this year was a bit more pointed. A gadfly termed the Countrywide deal "junk" and a "piece of trash" and begged Lewis to cancel it, but that was about it for fireworks. Lewis, of course, defended the deal. But it's clear that if he can't make it work, the questions will only get tougher. It's fair to say he has bet the farm--and his reputation--on Countrywide.

For more:
- here's an article from bizjournals

ALSO NOTED: Temasek adds to Merrill Lynch stake; More on JP Morgan beating estimates; and much more...

Thu, 17 Apr 2008 06:59:50 -0400

Company News:
> More on JP Morgan beating estimates. Article
> Wells Fargo beats estimates. Article
> Bank of New York Mellon misses estimates. Article
> Temasek adds to Merrill Lynch stake. Article
> UBS faces reputation problems. Article
> Is Goldman Sachs really a superior trader? Article
> Tiger's surgery is a loss for Wachovia. Article
> Analysts expect a 95 cent loss at Citigroup. Article

Industry News:
> Banks holding down the LIBOR? Article
> JP Morgan Chase: Tough economy ahead. Article

And Finally... How to deal with a buffoon boss. Article

Citigroup agrees to another bias settlement

Mon, 07 Apr 2008 06:59:58 -0400

Citigroup is finding it hard to shake Smith Barney's "boom-boom room" image that has dogged its reputation. The latest: Smith Barney has agreed to pay $33 million to some 2,500 brokers, who alleged discrimination. The settlement also calls for changes in the way it awards bonuses and new accounts and to do more to promote women. A judge in San Francisco still has to approve the deal. While the suit fortunately lacked some of the lurid details of previous suits, it's indicative of some important issues that can determine success. One big issue was how promising accounts are doled out to brokers. It appears that most of the top banks are promoting their diversity effort--if only for PR purposes. Whether this will make any real difference for women and minorities remains to be seen.

For more:
- here's the article from the Independent

Related Articles:
Morgan Stanley puts discrimination cases in the past. Article
UBS accused of racial discrimination. Article
EEOC sues Merrill Lynch. Article

John Mack fared well in 2007

Fri, 29 Feb 2008 06:59:58 -0500

Morgan Stanley CEO John Mack received some decent press recently when he made clear that he would not accept a bonus for what was a dismal 2007. But that doesn't mean he didn't make a whole lot of dough. CNNmoney.com notes that he made $41.3 million in 2007, $800,000 in salary, $336,000 from deferred compensation, $400,000 in perks (mainly the use of the company jet), and the remaining $40 million from stock and options grants (most of which are yet to vest in all likelihood). All in all, he didn't suffer. If the stock continues to tank, the value of those grants decline, of course. For most guys at that level, reputation matters as much as fortune. You can bet the top guys are plenty motivated to change their legacy.

For more:
- here's the article

Related Articles:
Morgan Stanley walking the plank? China deal announced. Article
Forcing the succession issues at Morgan Stanley. Article
Mack's bonus turns heads. Article

Real estate maven a victim of crisis

Thu, 21 Feb 2008 06:59:54 -0500

Love him or hate him, Harry Macklowe in many ways defines the zany New York real estate market. His next chapter may be a sad one; he looms large as a personal victim of the credit crunch. Fortune notes he personally guaranteed a $1.2 billion loan last winter--one that is due to hedge fund Fortress Investments this month. He needs to sell assets to pay the loan, but the credit environment is punishing and he's already strapped. The auction of his GM building is now underway. Also at stake: homes in Manhattan and the Hamptons, his art collection and his yacht. Whether his reputation will stand, allowing him a second act, remains to be seen.

For more:
- here's the Fortune article
- here' an article about GM building auction from the New York Sun

The meaning of Eddie Lampert's travails with Sears

Tue, 29 Jan 2008 06:59:56 -0500

Portfolio magazine attaches a lot of significance to the fortunes of Eddie Lampert, of Kmart and Sears fame--or infamy. In a long article, Lampert is held up as the archetype of the activist hedge fund manager that aims to rebuild long troubled companies, such as GM, Hilton and Hertz. After Lampert's great success with Kmart, he turned to Sears, where the fruits of his labor have yet to bud. "Once hailed as the Warren Buffett of his generation, Lampert, at 45, now has another turnaround job on his hands: his own reputation." But does his lack of turnaround success carry meaning for the entire crop of hedge fundies-turned-managers. Perhaps not. But the rise and fall and whatever comes next of Lampert is one heck of a story.

For more:
- here's the Portfolio article

Related:
New CEO for Sears. Article

How big will Goldman Sachs new hedge fund really be?

Wed, 19 Dec 2007 06:59:56 -0500

There have been conflicting reports as to how much money Goldman Sachs intends to raise for its splashy new hedge fund launch. Whether it's $6 billion or $10 billion or somewhere in between, it will be big, possibly the biggest ever. Most say the $6 billion launch of Convexity Capital last year by Jack Meyer, former head of the Harvard endowment, was the biggest so far. No one doubts that Goldman Sachs can raise money. It will be interesting to see how much the firm itself kicks in. But the issue for partners Raanan Agus and Kenneth Eberts will be whether or not they can pick stocks. The fund is eschewing the quantitative approach in favor of hands-on active management. After the problems of Global Alpha, the firm's reputation is on the line. Stay tuned.

For more:
- here's an article from the Times

Related articles:
- Goldman Sachs hedge fund under pressure?
- Goldman Sachs raises new hedge fund

The next big mutual fund scandal?

Mon, 29 Oct 2007 07:59:54 -0400

The regulators and industry didn't really get worked up until the credit crunch hit money market mutual funds. Think about it. Via the alchemy of securitization, some quite risky assets were pooled into AAA rated bonds that found their way into the money market mutual funds that have been touted by the industry and many banks as ultra safe for retail customers. The reputation for safety is so great that many assume they are covered under FDIC protections. This is where the credit crunch ensnares your grandmother. Fortune points out that by law these funds are required to invest in securities with "minimal credit risks." Did high credit ratings render them such. Once again, the agencies find themselves in the hot seat.

For more:
- here's the Fortune article