TCW Scandal: Firm Files Lawsuit Against Gundlach's New Firm
Submitted by Tyler Durden on 01/07/2010 - 17:09Update: The LA Times adds that according to the suit, on the day TCW fired him, the firm found “inappropriate contraband” in his offices, “consisting of marijuana, drug paraphernalia . . . and a collection of 12 sexual devices, 34 hardcore pornographic magazines and 36 hardcore sexually explicit DVDs and videocassettes.”
Dear Valued Clients,
I am writing to inform you that today TCW filed a lawsuit against certain former members of its previous fixed income portfolio management team, as well as their new company, DoubleLine Capital Group LLC.
The charges in the complaint are serious, disturbing and specific, and confirm TCW's reasons for relieving Jeffrey Gundlach, and his colleagues Cris Santa Ana, Barbara VanEvery and Jeffrey Mayberry of their duties. There is no reason to recount these charges here, but they clearly support TCW's conclusion that members of TCW's previous fixed income portfolio management team engaged in a pattern of breaches of fiduciary duty and other unlawful activity, which threatened TCW¹s business and reputation. Specifically, and among other things, TCW learned that persons close to Mr. Gundlach, now involved with DoubleLine, systematically downloaded very large volumes of TCW proprietary information over a period of weeks before Mr.Gundlach's termination.
- Comments: 28
- Reads: 4,388
Private Risk Is Gone As Traders Hedge Long Positions With Sovereigns
Submitted by Tyler Durden on 01/07/2010 - 16:01The most recent broker to realize that private risk does not exist as a result of global moral hazard is Deutsche Bank, which is actively promoting ta long risk/short sovereign CDS trade. That is happening as IG13 trades at its all time record tights of 77 bps. In other words, buying an index of 125 investment grade credit provides less than 1% of incremental risk return. Pretty soon the ABX trade will be buying IG. Until then, however, the only risk continues being that of sovereign balance sheet, courtesy of onboarding of virtually all private sector risk at the Central Bank and via other backstop mechanisms.
- Comments: 7
- Reads: 2,850
Kansas City Fed's Hoenig: Fed Must Hike Fund Rate To More Normal Level Between 3.5% and 4.5%
Submitted by Tyler Durden on 01/07/2010 - 14:06"The Fed must curtail its emergency credit and financial market support programs, raise the federal funds rate target from zero back to a more normal level, probably between 3.5 and 4.5 percent, and restore its balance sheet to pre-crisis size and configuration." Kansas City Fed President Tom Hoenig
- Comments: 94
- Reads: 5,900
Total NSA Unemploment Claims Hit Another Record
Submitted by Tyler Durden on 01/07/2010 - 13:58
Total Non-Seasonally adjusted insurance claims (consisting of Initial, Continuing and EUC claims) hit another record of 11,268,100. Make of this data what you will. We are confident the objective, mainstream media will find a way to spin this favorably (it can only go down from here... of course, unless it doesn't).
- Comments: 71
- Reads: 11,267
Simon Johnson: "We Now Have A Financial System That Is Completely Based On Moral Hazard"
Submitted by Tyler Durden on 01/07/2010 - 13:46"We now have a financial system that is completely based on moral hazard...Crazy things happen when you have financial system like that... The conventional wisdom is you can't have back to back major financial crises. I think we're going to push that, we're going to have a look and see whether that's true. The next 12 months could really be exciting... But we are setting ourselves up for an enormous catastrophe." - Simon Johnson
- Comments: 55
- Reads: 9,434
Mexican Stock Market Back To All Time Highs
Submitted by Tyler Durden on 01/07/2010 - 13:18
Presented without commentary. Just don't call it a bubble.
- Comments: 28
- Reads: 3,759
AIG Has Become A Figurehead Of All That Is Broken In America
Submitted by Tyler Durden on 01/07/2010 - 13:09The latest observation on our depressing economic reality, behind the glitzy headlines and the 3D TV screens, comes from Bloomberg's Jonathan Weil who rightfully asks "if AIG executives repeatedly claimed the stock was worthless, how do the executives, auditors, regulators, and, ultimately, the government, still have the balls to indicate the company's stock has any intrinsic value, both its publicly traded version and its book equity." Weil also joins the long list of people who wonder, just what the hell is the SEC's function in this day and age, when publicly-traded companies, many of them government backstopped, can disclose anything and everything they desire, even when such disclosure is flawed and purposefully misleading (see Bank of America and the earlier piece on a lying Tim Geithner and the very same AIG) with absolutely no repercussions. It is all really getting just far too depressing for US taxpayers to even be indignant. Maybe that has been the point all along...
- Comments: 20
- Reads: 4,190
$159 Billion In New Govvies On Deck, Including $74 Billion In Bonds, $10 Billion In TIPS
Submitted by Tyler Durden on 01/07/2010 - 12:39
Next week's Treasury auction schedule has been announced: next week will see a total of $159 billion in new gross issuance, consisting of $74 Billion in 3, 10 and 30 year Bonds, with two reopenings (10 year and 30 year).
- Comments: 14
- Reads: 2,786
Tim Geithner "Protects America From Itself" By Forcing Elimination Of Material AIG Disclosure
Submitted by Tyler Durden on 01/07/2010 - 11:23
- Comments: 89
- Reads: 12,679
Exercises In Supreme Hypocrisy: Bill Gross Edition
Submitted by Tyler Durden on 01/07/2010 - 09:57In a pathological example of nearly clinical hypocrisy, PIMCO's Bill Gross yesterday dedicated 4 meandering essay pages full of polemical ramblings to the characterization of America's sad political and financial hybrid reality. Yet the billionaire's saddest message is precisely the self-deluded aggrandizement that Gross decries yet willfully takes advantage of every single day. Because after bemoaning the fate of America's broken political system, and ridiculing the Federal Reserve's kleptocratic-friendly ways, it is precisely people like the PIMCO chairman that are most guilty of taking advantage of every single loophole presented to them, even as they criticize just this activity. This, beyond all the petty trivialities that Gross discusses, is precisely what is most wrong with America - at this point everyone, and especially Mr. Gross, knows too well that the wealth transfer from the middle class to the elite 1% of society will not end until such time as America itself defaults. Yet having the very people that benefit the most from this, write non-apologetic letters in which they criticize the very system that lets them walk home every day with an extra zero in their bank account simply due to their special connections within this very broken system, is beyond reproach.
- Comments: 156
- Reads: 15,402
Daily Highlights: 1.7.10
Submitted by Tyler Durden on 01/07/2010 - 09:23- Asian stocks rise, led by carmakers, banks; Copper gains, bond risk falls.
- Australian retail sales rose 1.8% in November - the most in eight months.
- China’s central bank said it will target “moderate” loan growth in 2010.
- Dollar near 3-week low on signs global rebound gaining momentum.
- Oil pulls back below $83 in Asia after cold weather sparks 20 percent rally since December.
- Spot iron ore delivered to China rose to the highest in more than a year amid “panic buying” by steel mills.
- Comments: 4
- Reads: 1,458
RANsquawk 7th January Morning Briefing - Stocks, Bonds, FX etc.
Submitted by RANSquawk Video on 01/07/2010 - 06:30RANsquawk 7th January Morning Briefing - Stocks, Bonds, FX etc.
- Comments: 3
- Reads: 892
A +316,000 NFP Print On Friday? The BLS Seasonal Fudge Factors Make It Very Likely
Submitted by Tyler Durden on 01/06/2010 - 19:10"As we look to December data (reported this Friday) if the seasonal adjustment multiple returns to anything in the range of historical norms it should provide a huge lift to the reported m/m change. In quantitative terms a return to the 1996–2008 average would create a seasonal lift of 431K to the as-reported m/ m change. In comparison the 1996–2007 actual December m/m change (unadjusted) was 116K. Put differently, if this was an average December for job creation and the adjustment factor returns to a historical average we would see a non-farm payroll print of +316K on Friday." - Stifel Nicolaus
- Comments: 105
- Reads: 25,594
SEC Hearing On HFT, Dark Liquidity And Sponsored Access Next Wednesday Will Achieve Absolutely Nothing
Submitted by Tyler Durden on 01/06/2010 - 17:31The SEC's highly overpaid bureaucrats will have to wake up early next Wednesday and read all the Goldman Sachs pamphlets on what a bid ask spread is, what predatory algos are, and why HFTs have hijacked the market in order to sound somewhat intelligent at a "Sunshine Act" hearing on high frequency trading, dark liquidity and sponsored access. Being insufferably worthless Wall Street puppets, the hearing will achieve nothing, and will be followed by a Sunset Act hearing in a few years, where a post mortem of all that could have been accomplished, but wasn't, will be eulogized, together with aremembrance of America's once alive capital markets.
- Comments: 12
- Reads: 2,224
