So it's MotorExpo this week, the fancy British car show that's making its New York debut this year. Where is it being held, you ask? At the World Financial Center, which just so happens to serve as the headquarters of Merrill Lynch. A "black Rolls Royce with a sticker price of $350,000 was parked directly outside a main entrance to Merrill Lynch... the bull in the company logo looking out at the car almost forlornly." [NYT/City Room]
Roughly a third of Lehman's employees will get to hold on to their jobs: "Barclays PLC has reached an agreement to buy the U.S. investment bank and capital-markets businesses of Lehman Brothers Holdings Inc. and as many as 9,000 Lehman employees will find jobs with the U.K. bank, according to people familiar with the situation." The deal will go before a New York bankruptcy court judge at 5 p.m. today; an official announcement won't be made until tomorrow morning. [WSJ]
Rumors: did they take down Lehman? This was one of those nagging questions to which we were too overwhelmed to answer yesterday. Now we know: Yes and no! On the one hand, as both rumormonger David Einhorn and pretty stiletto-wearing former Lehman CFO Erin Callan could tell you, that is how capitalism works. You short a stock, you start a word-of-mouth marketing campaign about how, say, "Lehman is the new Bear," which translates roughly to "Lehman is the new venerable investment bank whose demise those terrible short-sellers and their malicious rumormongering will turn into a self-fulfilling prophecy," and, lo and behold, the shit happens. Of course…it doesn't happen if your company has a sane and convincing leader who can go on CNBC and say, "here, look at our books! Our firm has such robust ratios of cash and hard tangible assets to covenants and other accounts payable that it really doesn't matter what our stock price does because, familiar as we are with the pussy nature of Wall Street confidence and the easily-distracted myopic ephemera-addled lemmings who govern such day-to-day fluctuations, we've seen to it to inoculate our business from such attacks by stockpiling enough hard currency and solid — but also liquid! — financial instruments that we can weather a crisis of confidence without having to undermine our case by begging them for money!" Lehman had no such leader. And it had no such assets!
We've done it! We've figured out just what set into motion the financial crisis that has led to billions in losses, demolished two investment banks (so far), and led to tens of thousands of lost jobs. It all goes back to Friday, March 7th when sleazy club owner Simon Hammerstein, headband-wearing scenester Arden Wohl, gay party boy Derek Blasberg, heiress Amanda Hearst, and gala staple Claire Bernard turned up at the New York Stock Exchange to ring the closing bell. Clearly, their mere presence at the exchange unleashed some sort of vicious curse on the markets. Don't believe us? Below you'll find a chart that shows the price of Lehman Brothers since that fateful Friday—or "Black Friday" as the day will henceforth be known—and you'll have all the proof you need that this visit was what doomed the storied firm.
We thought we'd check in with the chipper young woman who was answering Lehman CEO Dick Fuld's phone last week and see if she was keeping up her positive attitude. (Yes, there is someone still in the building picking up Dick's line. We wondered about that, too.) It seems like it's a different lady taking calls today. And she doesn't sound nearly as perky, which might have something to do with the fact that Lehman employees don't know if they're still getting paid.
The second most in-demand interview behind Sarah Palin? That would probably be Dick Fuld, the CEO of Lehman Brothers, who watched as the firm he led for more than two decades crumbled to pieces yesterday. Since rumors about Lehman's demise gained steam last week, Fuld has kept a low profile. Lehman employees didn't hear from him when the company filed for bankruptcy yesterday, he's been largely absent from the office in the last 48 hours, and according to the Wall Street Journal he's surrounded himself with a more elaborate security detail in recent days, which makes sense considering about 25,000 people would love to sock him in the face right now. So where is he? At his $10.82 million house in Greenwich, where he can always play a little tennis or take a dip in the pool to distract himself from the fact that his reputation has been ruined. After the jump, a tour of Casa Fuld!
The Wall Street Journal's Steve Gelsi took to the streets yesterday to solicit some thoughts about the crisis in the financial markets from people gathered outside the New York Stock Exchange. One of the people Gelsi chatted with was a young man named Bhusham Gupta, who said he works in the wealth management department at Citigroup and confessed that he feels "pretty" for the people who worked at Lehman Brothers who lost their jobs. First of all, Bhusham, you are pretty—don't ever let anyone tell you any different. And hats off to Citi CEO Vikram Pandit. Importing your brokers from India is a surefire way to keep your bank nimble during these lean times! Clip after the jump.
No story about a bankrupt company is complete without the requisite "sad sack carries own crap out of office in boxes" shot, so of course every media outlet in the world was rolling tape or snapping pictures outside Lehman Brothers headquarters in New York Monday. TV reporters were doing their standups with the building in the background, so the average Joe watching at home would be able to say to his wife, "so that's where my securitized subprime mortgage is bundled with commercial-mortgage-backed securities into a mark-to-model collateralized debt obligation!" Over-extrapolating from the financial fortunes of others is precisely what got us into this mess in the first place but, but on the other hand you can't expect people not to stare at pictures of anyone potentially in the process of becoming a hobo. Watch the media watch the (maybe) new poors in the gallery after the jump.
So it was a year ago now that shouting head Jim Cramer completely lost his mind in front of the cameras at CNBC. Cramer screamed that government officials had "NO IDEA how bad it is out there — NONE!!!" and that the economy was becoming "armageddon." It was glorious television. Now that the meltdown is truly molten, it's the former hedge-fund manager's turn to gloat. Last night on his Mad Money, Cramer assailed federal officials as "disgraceful" and "ignorant" for allowing things to get this bad. He also called Federal Reserve Chair Ben Bernanke "in over his head." And he did it all with relative calm — perhaps content that, for once, he was both correct and correctly understood. (Twenty minutes later, Cramer was screaming "booyah!" and triggering cannon sound effects for his "Buy Or Sell... lightning round.") Video after the jump.
I'm a pretty simple guy. Hand me a bottle of Two-Buck Chuck and a Xbox controller and I won't bother you for a couple of hours, if not, days. So these posts talking about the harbinger of financial doom is upon us is like trying to understand the Bush Doctrine — I don't get it. Thankfully we have today's featured commenter, madox, to teach, correct, and maybe make you a little bit of money:
SeamlessWeb, the high-class Kozmo.com of the new millennium (this means they deliver you meals from local restaurants, while you are at work, if you are too lazy to call a restaurant) (oh hah one of the founders of Kozmo.com went back to Lehmann Brothers when that site shuttered), might be in a spot of trouble! You see, the financial sector is melting down and thousands of Wall Street people are going to get laid off. Those Wall Street people and their Wall Street firms make up a large part of SeamlessWeb's client base! (Not out fault you guys list like two restaurants in Brooklyn, losers.) But don't worry, SeamlessWeb employees! The CEO sent out an email this morning promising that even though all their corporate clients are facing upheaval and chaos, SeamlessWeb will continue to deliver sushi: "Regardless of whether people are at work or away from work, they need to eat. And, SeamlessWeb provides a highly efficient and cost-effective way for them to order food from local restaurants for both takeout and delivery." Poor dopes. (Of course, SeamlessWeb is owned by food service giant Aramark—so they may ride out this hiccup yet.) Click to read the sad email.
Who's going to suffer as a result of all the carnage on Wall Street? A few of the sectors expected to be particularly hard hit: black-car chauffeurs, Breguet dealers, pricey restaurants, wine auctioneers, art galleries, household-staffing agencies, Lamborghini salesman, private-jet operators, African safari planners and interior designers. [WSJ]
Pope-hating straight talker Bill Maher is seriously considering putting some money in failing Washington Mutual now that they're offering free blow jobs with every account. Click to watch the sadly plausible series of fake ads that get worse and worse until we're all broke and can't afford a blow job anyhow.
So the United States is entering financial turmoil, what with all of our banks collapsing and the world's largest insurance company needing a bailout from the State of New York and the stock market tumbling and thousands of fancy jobs on the line. Honestly, though, let's get to the heart of the matter: will this news secretly (or openly!) thrill political partisans? It seems, on its face, that news of Wall Street turmoil helps Senator Barack Obama. And why not? The initial careful ventures into political exploitation of this maybe-catastrophe are already underway. How will it play out? How To Attack Josh Marshall tosses out a readymade almost-true attack line: "The man most responsible for the financial services and banking deregulation that made today possible, fmr. Sen. Phil Gramm, is the man John McCain wants to put in charge of the whole economy." Ok. The "man most responsible" part is defensible, if exaggerated. Gramm deregulated the hell out of the banking sector as a senator. And he lobbied for lax oversight of predatory lending as vice chairman of UBS's i-banking arm. The "man McCain wants to put in charge of the whole economy" bit seems a little less true. We don't know who the hell McCain would let run things. McCain does love Gramm, and Gramm taught McCain everything he needs to know about the economy. McCain's limited grasp of economics basically consists of Gramm's strict anti-regulation philosophies with a bit of pandering to the middle class tossed in. But Gramm is McCain's former campaign co-chair. All signs point to a bigger role played by the less unpopular Carly Fiorina handling the economy in a McCain presidency, even if Gramm's ideas rule the day. Still. That's the kind of fact-checking that gets us nowhere! It's a fine line to use: McCain doesn't get the economy, and the guy he has around to explain it to him is personally responsible for this mess. Some variation on that line will probably be repeated by the Obama campaign over the next week. (Obama has already siezed on a mostly innocuous McCain remark—way to adapt, guys!) Watch Your Own Ties But here are some of the potential pitfalls for Obama. This bit of trivia has already made it to Politico:
In the event you haven't yet seen this clip from CNN this morning and you're either a) really depressed about the demise of Lehman Brothers and need a little cheering up; or b) you get really turned by watching unattractive men going at it on the streets of Manhattan, have a look at this clip of some on-camera shenanigans outside the offices of Lehman Brothers earlier today. [The Observer now reports it was a prank for Howard Stern's show.] Video after the jump.
Some people believe that Nostradamus predicted the Wall Street crash of 1929. But a modern age requires modern prophets. On a Google Finance message board last July, one lone nut predicted a market crash. "The negative news that will move the market downward should occur September 15," he wrote. That would be today. This oracle may be raving, but he did predict the future correctly. "This organization below," he went on, "runs the show..." The Group's Name: Legatus Its Mission: " To study, live and spread the Faith in our business, professional and personal lives." What is it?: Legatus—Latin for "ambassador" (and the term for a general in the Roman army)—is a worldwide networking group "designed exclusively for top-ranking Catholic business leaders." Its main stated duty is to bring such leaders together for closed monthly networking meetings. The group calls itself "the conduit connecting two powerful realities, the challenge of top-tier business leadership and a religious tradition second to none." History: The group was founded in 1987 by Tom Monaghan, the devout Catholic who founded Domino's Pizza. It now boasts "thousands" of members throughout America and in Europe. It's somewhat reminiscent of Opus Dei, the shadowy Catholic group that starred in The Da Vinci Code. The Google Nostradamus went by the name of reinhardt (though his account has now been banned). He ID'd himself as the author of this conspiracy site as well. Here are some salient portions of his very extensive posts on the connection between Legatus and our current financial blowup:
