When the Sanford Bernstein analyst closes his eyes, he pictures Lloyd and Co going out of their way to get on Carl Levin’s good side, possibly going so far as to praise his work.

“As politicians continue to criticize the firm and the public scrutiny persists, we believe that Goldman’s clients will begin to rethink their relationship with the firm and the franchise will ultimately suffer,” he wrote. “With approximately 17 percent of the ownership in the hands of current and former partners, this control group has ample motivation to make amends with politicians and the public in order to reduce the threat to its franchise.”

[Bloomberg]

Article courtesy of Dealbreaker

Zarti, reprising the role of Jake LaMotta

In early 2008, Libya’s sovereign-wealth fund controlled by Col. Moammar Gadhafi gave $1.3 billion to Goldman Sachs Group to sink into a currency bet and other complicated trades. The investments lost 98% of their value, internal Goldman documents show… In July 2008, Mustafa Zarti, the fund’s deputy chairman, summoned Mr. Kabbaj, Goldman’s North Africa chief, to a meeting with the fund’s legal and compliance staff, according to Libyan Investment Authority emails reviewed by the Journal. One person who attended the meeting says Mr. Zarti was “like a raging bull,” cursing and threatening Mr. Kabbaj and another Goldman employee. Goldman arranged for security to protect the employees until they left Libya the next day, according to people familiar with the matter.

Update: According to Lucas van Praag, the Libyans’ anger was misplaced:

Van Praag said the trades that resulted in a huge loss for Libya were designed and approved by the LIA and that Goldman was hired to execute the trades. He also said the Journal report doesn’t mention that in mid-2008, Goldman recommended restructuring the investments and asked the LIA if they wanted to discuss it. Van Praag said the LIA did not respond to Goldman’s query.

[WSJ]

Article courtesy of Dealbreaker

Something that apparently constitutes a ‘trophy pad’ to some people.

Over the holiday weekend, the Post ran an article about New York men who use their “luxury apartments to attract the ladies,” in which several dudes were interviewed about their abodes’ abilities to get them laid. One of them was well-known comedian Jim Norton, who was obviously fucking with the paper when he said stuff like:

“Women see windows — and skirts come off. This one businesswoman, she came over, and she said she was ‘not like the other girls,’ ” he recalls of the guest, who announced that she did not sleep with men on the first date. “Well, fast-forward an hour after seeing the apartment, and not only was she like the other girls, she was worse. They like the view…I remember another woman . . . I knew she was impressed with the place and decided to sleep with me. I gave a horrible [sexual] performance. She walked around the apartment a couple of times before she left — almost reminding herself that this is why she just put herself through that.”

Then there was “financier” John, who clearly took this seriously and while flexing in front of the mirror, told the reporter:

“In New York, when you say porn, more people are likely to think you mean real estate,” says John, a multimillionaire financier who asked that his real name not be used. “Every two-bit banker at Goldman Sachs can buy you an expensive dinner or have a $175,000 Ferrari, but how many can have the $10 million trophy pad?”

Putting the call on speaker so he could use both hands to get in some Shake Weight time, John went on:

John frequently lets his friends borrow his 5,000-square-foot Upper East Side apartment so they can bring home the ladies while he’s away on business. After letting a London hedge-funder borrow his flat for a few days, the financier reported that his friend was able to score every night with three women (though not at the same time). “He told me: ‘They were excited when they got to the door — and when they saw the view, it was a done deal.’ ”

[NYP]

Article courtesy of Dealbreaker

2nd banker in hotel sex bust (NYP)
Mahmoud Abdel-Salam Omar — the 74-year-old former chairman of Egypt’s Bank of Alexandria — allegedly groped and “gyrated” against the maid in Room 1027 at The Pierre hotel on Fifth Avenue, a law-enforcement source told The Post. He was wearing a bathrobe at the time, but it was not clear what, if anything, he had on under it.

Greek Aid Package To Be Decided By June (Bloomberg)
Inspectors from the EU, the International Monetary Fund and the European Central Bank are set to wrap up a review of Greece’s progress in meeting the terms of last year’s 110 billion-euro ($158 billion) bailout in coming days. The EU will then formulate its plan for further aid to Greece, which remains shut out of financial markets a year after the rescue package.
“We are waiting for their final judgment,” Juncker, who is also Luxembourg’s prime minister, said yesterday in Paris after meeting with French President Nicolas Sarkozy. “Their position will partly determine our position, so it’s too early. We will try to solve the Greek problem by the end of June.”

Japan recovery takes hold, but debt downgrade looms (Reuters)
Japan’s economy offered more signs of recovery from the deadly March earthquake on Tuesday, but Moody’s ratings agency warned both growth and government action may fall short of what is necessary to bring Tokyo’s ballooning debt back under control.

Goldman Sachs names ex-Sen. Gregg to advisory post (Businessweek)
Goldman Sachs Group Inc. said Friday that it has hired former U.S. Senator Judd Gregg as an international adviser.

Libya’s Goldman Dalliance Ends in Losses, Acrimony (WSJ)
In early 2008, Libya’s sovereign-wealth fund controlled by Col. Moammar Gadhafi gave $1.3 billion to Goldman Sachs Group to sink into a currency bet and other complicated trades. The investments lost 98% of their value, internal Goldman documents show…In an effort to make up for the losses, Goldman offered Libya the chance to become one of its biggest shareholders, according to documents and people familiar with the matter.

Lagarde has G8 backing (Reuters)
G8 leaders all back French Finance Minister Christine Lagarde’s bid to run the IMF, Foreign Minister Alain Juppe said Sunday, as she attacked a call to investigate her role in a 2008 legal case that may harm her chances.

Wall Street ‘mispriced’ LinkedIn’s IPO (FT)
Peter Thiel, an early Facebook investor and co-founder of PayPal, said banks did not understand the full potential of the latest internet companies and warned that the next Silicon Valley darlings would negotiate hard when their turn comes to go public. “Whenever a stock price goes up as much as it does with LinkedIn, you assume the IPO was mispriced and the bankers screwed up,” said Mr Thiel, an investor in LinkedIn since its launch. “There continues to be a certain antipathy by Wall Street banks toward Silicon Valley companies where they don’t quite believe it’s real.”

At I.M.F., a Strict Ethics Code Doesn’t Apply to Top Officials (NYT)
At the International Monetary Fund, there is one set of ethics guidelines for the rank-and-file staff and another for the 24 elite executive directors who oversee the powerful organization. Over the last four years, the fund has tightened internal systems for catching ethical misconduct among its 2,400 staff members, establishing a telephone hot line for complaints like harassment; publishing details of complaints in an annual report; and empowering an ethics adviser to pursue allegations, which last year led to at least one dismissal. But the fund’s board members remain largely above these controls. The ethics adviser, for example, is not able to investigate any of them.

Strauss-Kahn assembles crisis team to fight back (Reuters)
Faced with a legal and media onslaught, Dominique Strauss-Kahn is pulling together a crack team of investigators, former spies and media advisers to fight back against charges he sexually assaulted a hotel chambermaid.

‘Bad-tipper’ Strauss-Kahn has food, patio furniture delivered; turns away balloons (NYP)
“They never tip,” said a sweaty Danny Cotto after dropping off a box from Espresso Coffee at around 6 p.m. at the luxe TriBeCa town house…He took in a six-bag grocery order that included healthy fare like boneless, skinless chicken breast, Lean Cuisine meals and Crystal Light.

DSK using man-power to clean up (NYP)
Dominique Strauss-Kahn has hired an all-male cleaning staff to do his dirty work at his TriBeCa townhouse, where he’s awaiting trial for allegedly forcing himself on a hotel maid.

Concerns mount over rising buy-out debt levels (FT)
Joseph Schull, European head of US private equity group Warburg Pincus, warned that his industry should not repeat mistakes made during its heyday in 2006 and 2007, when some companies were bought with excessive loan packages…Howard Marks, chairman of Oaktree Capital Management, a US private equity group investing in distressed assets, wrote in a note to clients last week: “In most regards the capital markets – and investors’ tolerance of risk – are retracing their steps back in the direction of the bubble-ish pre-crisis years.”

A FrontPoint Founder Tries Again With a New Firm (DealBook)
After Mr. Duff helped to orchestrate the sale of FrontPoint to Morgan Stanley in 2006, he struck out on his own, starting Duff Capital Advisors…With the markets in disarray, clients never materialized and Duff Capital shut down in May 2009…Now, Mr. Duff, a former top executive at Morgan Stanley, is trying again. His new firm, Massif Partners — which like FrontPoint has a name that refers to his passion for mountain climbing — is building off the blueprint of Duff Capital and focusing on pensions.

Russia’s Central Bank Signals Interest-Rate Pause After Surprise Increase (Bloomberg)
Bank Rossii, the central bank, yesterday raised its overnight deposit rate to 3.5 percent from 3.25 percent, surprising 11 of 20 economists in a Bloomberg survey. It left the refinancing and overnight repurchase rates unchanged after a quarter-point increase in April, saying in a statement that borrowing costs may be at the level necessary to tackle inflation and promote growth “for the nearest months.”

For Insurers, Bad—but Not Bad Enough (WSJ)
The deadly outbreak of tornadoes across the U.S. since late April is expected to cost the insurance industry more than $5 billion, according to disaster-modeling firm Eqecat. That puts weather-related losses in the U.S. so far this year in the range of $13 billion to $15 billion, three to four times a typical year. Add in catastrophes like the earthquakes in New Zealand and Japan, and disaster-related losses for the industry are estimated to be upward of $50 billion this year…”I think things are now bad enough to be good enough,” says Meyer Shields, an analyst at Stifel Nicolaus. Bad enough, that is, that the industry will be forced to start raising premiums later this year or early next. That would immediately benefit major insurance brokers such as Aon Corp. and Marsh & McLennan Cos. Indeed, their shares are up more than 10% this year, roughly double the broader market.

Analyst: Chipotle expands test of chorizo (NRN)
Chipotle Mexican Grill has expanded a test of a new chorizo sausage that, if rolled out, would be the chain’s first new meat option in years, a securities analyst said Friday.


Hackers Disrupt PBS Web Site and Post a Fake Report About a Rap Artist (NYT)
The PBS Web site briefly carried a fake article claiming that the famed rapper Tupac Shakur was alive and living in New Zealand after a group of hackers took over the organization’s computer systems on Saturday night.

Article courtesy of Dealbreaker

Gold jumps 1.5 percent on euro zone debt fears (Reuters)

Payrolls Grow in 42 States Including New York, Texas as Job Market Revives (Bloomberg)

Greece hit by Fitch debt downgrade (FT)

IMF approves 26 billion euro funding for Portugal (Reuters)

Former IMF Chief to Stay in Temporary Housing in Lower Manhattan

Dervis rules himself out of IMF race (FT)

IMF Aborted Strauss-Kahn Probe in 2008 (Bloomberg)

Emerging market equity funds see $1.6 bln outflows (MarketWatch)

Soros sharpens gold bubble debate (FT)

Analysts’ Rare ‘Sell’ Ratings are Rarely Right (Bloomberg)

Mayor Bloomberg says if Apocalypse happens, alternate side parking suspended (NYDN)

JPMorgan Traders’ Market-Share Inroads Growing, Deutsche Bank Analyst Says (Bloomberg)

Goldman Sachs Names Sorrell, Gutman as Co-Heads of U.K. Investment Banking (Bloomberg)

UBS Loses Two Top Investment Bankers (CNBC)

Who shot bin Laden? Former SEALs fill in the blanks (WaPo)

Article courtesy of Dealbreaker

Shares of Intel (INTC) are down 45 cents, almost 2%, at $23.44, after Goldman Sachs’s James Covello cut his rating on the stock this morning to Sell from Neutral, according to a write-up this morning by StreetInsider.com.

Covello warns that the recent run-up in the stock price is unwarranted given that Street estimates are too high and are bound to be ratcheted down.

Covello sees high capital expenditures impacting Intel’s chip prices and cost of goods, and reiterates a view that chips based on ARM Holdings (ARMH) designs will be formidable competition for Intel in tablet computers and smartphones.

Covello’s note comes on the heels of Intel’s investor day on Tuesday, during which the company reiterated its forecast for the year, said the current quarter was on track, and gave further details about its processor roadmap and how it will compete with ARM and others. The presentations received fairly favorable reviews from numerous Street analysts, as I wrote yesterday.

Not entirely surprising, as Covello had written a long note on the semiconductor market back on March 10th with rather grim things to say about the traditional PC chip business.

I’ll have more details on Covello’s full note a little later this morning.

Article courtesy of Tech Trader Daily

London-based banker Richard Gnodde will join David Solomon and John Weinberg running Goldman’s investment bank. [Bloomberg]

Article courtesy of Dealbreaker

Fifty-four percent of respondents to the global poll of traders, investors and analysts conducted May 9-10 have an unfavorable opinion of the New York-based bank, more than double the negative rating for JPMorgan. Yet a month after a U.S. Senate report said Goldman Sachs misled clients, 78 percent of those surveyed said the accusations will either have no effect on the firm or will harm its reputation without driving away customers. “Investors will continue to put their money with capable institutions, regardless of their history or morality,” said poll participant Christian Contino, 27, who works as a consultant for the investment-management section of the United Nations’ International Fund for Agricultural Development. [Bloomberg]

Article courtesy of Dealbreaker

Next Up: A Crackdown on Outside-Expert Firms (DealBook)
With the government securing a conviction against Raj Rajaratnam of the Galleon Group on Wednesday, federal prosecutors will shift their focus to expert networks — the intricate web of money managers, corporate executives and consultants at the center of another wave of insider trading cases.

Goldman Sachs Viewed Unfavorably by 54% (Bloomberg)
The company was viewed less favorably than other banks by the 1,263 poll respondents. While 54 percent said they had an unfavorable view of Goldman Sachs, 25 percent felt the same about JPMorgan, 49 percent for Citigroup Inc. (C) and 48 percent for Bank of America Corp. (BAC) Thirty-five percent had an unfavorable view of Frankfurt-based Deutsche Bank AG (DBK), which was also singled out in the U.S. Senate subcommittee report.

AIG Share Sale Starts But Could Be Pulled (WSJ)
The stock offering commenced Wednesday following lengthy discussions between Treasury and AIG’s management and directors about what they want to achieve from the share sales…Following the discussions, the Treasury and AIG are now in alignment about how to proceed with the offering, and they won’t sell shares if taxpayers don’t earn a profit now and in the future on the sales, according to people familiar with the matter. In other words, if they don’t get the price they want, Treasury will “pull the deal,” said one of the people.

Glencore Said to Gain Double Orders for IPO (Bloomberg)
Glencore International Plc received enough demand from investors for its $11 billion initial public offering to sell the shares more than twice over, according to three people with knowledge of the matter. Highbridge Capital Management LLC, a hedge fund owned by JPMorgan Chase & Co., proposed a $500 million investment, said one of the people, who declined to be identified because the information isn’t yet public. The last orders for the offer are due on May 18, with final pricing to be disclosed the following day, according to a term sheet for the sale.

Exit interview: Kobe Bryant says Lakers’ failed title run was a ‘wasted year of my life’ (LA Times)
Kobe Bryant is never much for sentimentality, and he’s not going to change any time soon. So when he reflected Wednesday on the Lakers’ underachieving 2010-2011 season, which included being swept in a Western Conference semifinal series, Bryant didn’t mince words on his disappointment.

China hikes reserve requirement ratio for banks (MarketWatch)
The People’s Bank of China lifted the ratio of funds domestic banks must set aside as reserves on Thursday, the fifth such hike this year amid persistent inflation concerns. From Monday the reserve requirement ratio will be increased 0.5-percentage point, bringing the rate to 21% for most big banks and 19% for smaller banks.

Copper tumbles to 5-month low on growth blues (Reuters)
Copper tumbled to a five-month through on Thursday as investors headed for the exit, fearing slower economic growth and demand from top consumers China and the United States. Also weighing on sentiment was the stronger dollar .DXY across a basket of currencies, which makes commodities priced in dollars more expensive for holders of other currencies.

SEC Investigating State Street Foreign Exchange (WSJ)
The Securities and Exchange Commission is investigating State Street Corp.’s foreign-exchange trading on behalf of pension funds in a sign that law-enforcement probes into how custody banks process tens of thousands of foreign-exchange trades are widening.

Draghi to Take Helm at ECB in November (Bloomberg)
[Italy’s Mario] Draghi, 63, will on Nov. 1 inherit an ECB that’s almost unrecognizable from the one Jean-Claude Trichet took charge of eight years ago. The bank’s balance sheet has more than doubled to 1.9 trillion euros ($2.7 trillion), mostly as a result of the extraordinary measures it used to battle the global financial crisis and now Europe’s sovereign debt woes…[German Chancellor Angela] Merkel made clear she’s backing the Bank of Italy governor in the expectation he will subscribe to the tight-money tradition of the Bundesbank, which provided the blueprint for the ECB when it was created 1998.

Bill Proposes Mortgage Shake-Up (WSJ)
Two lawmakers, a California Republican and a Michigan Democrat, are set to unveil legislation Thursday to replace mortgage giants Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees… Like Fannie and Freddie, the new entities would be restricted to buying loans that meet certain standards, including size caps. But the firms would have to hold much more capital than Fannie and Freddie.

Goldman, Beijing Launch Yuan Private-Equity Fund (WSJ)
Goldman Sachs Group Inc. has signed a deal with the Beijing government to launch a yuan-denominated private-equity fund that aims to raise 5 billion yuan ($769 million), according to a person familiar with the situation.

Morgan Stanley to Announce Private-Equity Yuan Fund (WSJ)
Morgan Stanley is expected to announce details of a yuan-denominated private equity fund in Hangzhou next week, according to a person familiar with the matter. The Wall Street firm will be running the fund in a partnership with Hangzhou Industrial & Commercial Trust Co., the person said. It wasn’t immediately clear how much the fund expected to raise.

China growth could slow to 8 percent: Goldman’s O’Neill says (Reuters)
“It is my judgment that the Chinese economy is probably slowing down more than people realize,” [O'Neill, Chairman of Goldman Sachs Asset Management] said, adding that as a result, he was not surprised that commodity prices are coming under pressure. As evidence, he cited the Goldman Sachs China Activity Index, the firm’s propriperary indicator of GDP, which shows that the momentum of Chinese growth has slowed, and that slowdown was supported by economic data reported this week. “And I suspect that China is going to slow down to around 8 pct GDP growth. If I’m right, that means sometime in the 2nd half this year, Chinese inflation will not be a problem, and will come back down to around 4 percent,” he said. “And the PBOC will be able to stop tightening monetary policy and we can all live happily ever after.”

UBS: Basel Rules Leave Banks Overcapitalized (WSJ)
Banks will likely have too much cash by 2019 as a result of the Basel III global banking rules, UBS AG Chief Executive Oswald Grübel said Thursday. “In the next 10 years, at the end of 2019, we will have overly liquid, overcapitalized banks,” said Mr. Grübel, who was addressing a business audience at a conference here. “However this also means we won’t have a lot of growth,” he said.

MIT sells $750m of century bonds (FT)

The Massachusetts Institute of Technology is planning to sell 100-year bonds as the recent drop in interest rates draws a flood of bond issuance this week.

In Exquisite Detail, Donald Trump Describes How He Styles His Hair (Rolling Stone via Vanity Fair Daily)
“O.K., what I do is, wash it with Head and Shoulders. I don’t dry it, though. I let it dry by itself. It takes about an hour. O.K., so I’ve done all that. I then comb my hair. Yes, I do use a comb. Do I comb it forward? No, I don’t comb it forward. I actually don’t have a bad hairline. When you think about it, it’s not bad. I mean, I get a lot of credit for comb-overs. But it’s not really a comb-over. It’s sort of a little bit forward and back. I’ve combed it the same way for years. Same thing, every time.”

Article courtesy of Dealbreaker

Defenders of Goldman have been quick to insist that while the bank may have had a few ethical slips here and there, its only real offense was being too good at making money. We now know, unequivocally, that this is bullshit. Goldman isn’t a pudgy housewife who broke her diet with a few Nilla Wafers between meals — it’s an advanced-stage, 1,100-pound medical emergency who hasn’t left his apartment in six years, and is found by paramedics buried up to his eyes in cupcake wrappers and pizza boxes. [Rolling Stone]

Article courtesy of Dealbreaker