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naked capitalism

Rubin Resigns from Citi; Bank to Sell Smith BarneyToday

Rubin's departure from Citigroup would seem to imply that his continued service there, amid the newly critical commentary on his failure to rein in the bank's pursuit of risk, was no longer a plus. But the real question is: not a plus for him, or not a plus to the bank?

Citi has also decided to sell Smith Barney. A brokerage unit, which provide solid revenues even in bad times (brokers have increasingly migrated towards asset under management pricing structures) would presumably be attractive to a large bank. But there are comparatively few well capitalized large retail banks these days.

Links 1/9/08Today

Thanks again for your patience, i have a lot of good material (some from helpful readers) I simply have not been able to get to, will be remedying that in the next few days. Please stay tuned! On the verge of a face plant now.

Skier Suffers Exposure The Smoking Gun. Reader John sent this as a possible antidote, adding " I ski a lot and cannot imagine how anyone would ever end up like this after attempting to get on a chairlift."

US man demands kidney back from wife BBC

Sunday evening - the new web rush hour PCPro

Heat may spark world food crisis BBC

Retail slump will gut newspaper ad sales Reflections of a Newsosaur (hat tip reader Tim)

Nationwide Inquiry on Bids for Municipal Bonds New York Times. I'm shocked, shocked that there might be

Dividends: What the Bank Giveth, the Bank Now Taketh AwayYesterday

No, the headline above is not goofy, and I presume it did get your attention.

In a concise and suitably critical piece, Floyd Norris of the New York Times tells us that the corporate dividends paid in the seemingly good years depended far more on bank largess than was widely realized. And as credit is being reined in, so to will dividends be, as a direct result of more stringent lending decisions.

From the New York Times:

“Dividends don’t lie.”

Chalk up the death of another Wall Street cliché.

In the late bull market, dividend payments provided one of the seemingly strongest arguments for the bulls. Maybe earnings numbers could be manipulated, but dividend payments required cash. If the company had the cash to hand out, you could be confident the earnings were real.

It was a lie.

Yves here. Admittedly, Norris' articles typically are more column than journalism, but I feel like applauding when someone at the Grey Lady decides not to mince words. Back to his piece:

It is now becoming clear that the great news on the dividend front from 2004 through 2006 was not an indica

Quelle Surprise! Hedge Funds Had a Horrible 2008, Lost 18%Yesterday

While no one hedge fund index is comprehensive. all the reports to date point the same way: the hedge fund industry lost its clients a lot of money in 2008.

While you can blame the horrid results on the dreadful environment across a host of asset classes, a very real sense, the funds became victim of their own success. And I don't mean via the burgeoning amount of capital that reduced the returns in formerly attractive strategies.

No, what hurt hedge funds was their pursuit of institutional money. In the stone ages, when hedge funds were the province of wealthy individuals, they could do what ever they wanted to as long as it was legal and delivered outsized returns over time. In other words, they did not have to adhere to an investment style.

One of my colleagues, Amar Bhide (then at McKinsey, now a professor at Columbia Business School, at one point in between head of proprietary trading at a Wall Street firm) pondered in depth why hedge funds could outperform. He concluded that it was because, unlike other money managers, who had to operate within comparatively narrow confines (say large cap US equities or emerging markets bonds), they could go wherever they thought the best opportunities lay. And perhaps as important, they had no oblig

Links 1/8/09Yesterday

Apologies for a post or so less than usual the last couple of days, I came back from holiday to some real messes (literally, as in painters who left a path of destruction in their wake), plus made a couple of trades that I am now kicking myself up one side and down the other about. I simply despise trading, it takes a huge amount out of me, and I lose a ton of energy second guessing myself. I should be back to normal soon.

Concern for California's pelicans BBC

English Hippies Want Local Wi-Fi Network Turned Off Fox News

Bailouts Gone Wild! Porn Chiefs Seek $5 Billion New York Times Dealbook (hat tip reader Leo)

Obama Says He Will Seek Overhaul of Retiree Spending New York Times. This pretty much says Obama does not believe in his health care reform (or more accurately, reflects that it does not solve the problem). The entitlement problem is NOT a Social Security problem (a few tweaks like raising the ceiling on payroll t