Proxy Statement

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• Obama budget aims to kick start deficit-reduction talks (Reuters)

Here is the bottom line. From the day Pandit took control in December 2007 until today, C stock is down 90%.......Even as Pandit has been paid a total of over $260 million during his CEO tenure, even including his famous $1 comp received in 2010. While CEO of Citigroup in 2007, Vikram Pandit earned an annualized compensation of $3,164,320, which included a base salary of $250,000, stocks granted of $2,914,320, and options granted of $0. In 2008, he earned a total compensation of $38,237,437, which included a base salary of $958,333, stocks granted of $28,830,000, and options granted of $8,432,911. In 2009 he received total compensation of $128,751, including base salary of $125,001; In 2010 he received total compensation of $1,00; In 2011 he received total compensation of $14,857,103 including base salary of $1,671,370. Oh, and this number includes the $165 million Pandit received for his low performing hedge fund which was purchased by Citi in 2007, and was closed by Citi a few months later for epic underperformance.

If anyone is wondering why the darling stock of Bill Ackman and Whitney Tilson, for whom every collapse of JCP is a buying gift from god, namely JCPenney, is plunging after hours, it is because the company's president, Michael Francis, hired October 4, 2011, has just quit. To wit: "J. C. Penney Company, Inc. ("jcpenney") (JCP) today announced that Michael Francis will be leaving the Company, effective today. Chief Executive Officer Ron Johnson will assume direct responsibility and oversight of the company's marketing and merchandising functions." And to think that just 9 months ago the company CEO Ron Johnson announced, that "I am thrilled to welcome Michael to our team... He is an extremely talented executive with the vision and courage to re-imagine the department store experience. His ability to innovate and deep understanding of the industry will be invaluable as we set out to transform J.C. Penney into America's favorite store." And while his ability to do anything else appears to have been a dud, his ability to read the fine print in his contract, especially where it talks about his perks, was second to none. Because despite leaving just 9 months after his hiring, Francis is entitled to collect a whopping $9 million in pro-rated signing bonus (alongside $100,000/month in salary): all in all - a tidy package of $10 million for shooting the breeze while observing a sinking retail ship. Not bad for a company whose stock has just plunged to September 2010 levels.

Perhaps the only thing more spectacular than being punk'd by a rogue shareholder who uses the proxy statement of one of the world's biggest financial firms as a public venue for some quite disturbing humor, is that nobody in the US has decided to do this to the hated US financials firms. Yet.

The headlines flow in:

• GOOGLE 1Q REVENUE $10.65B
• GOOGLE 1Q REVENUE EX TAC $8.14B, EST. $8.14B
• GOOGLE 1Q ADJ. EPS $10.08, EST. $9.64
• GOOGLE 1Q PAID CLICKS ROSE 39% VS YEAR AGO
• GOOGLE 1Q TRAFFIC ACQUISITION COSTS $2.51B
• GOOGLE 1Q COST PER CLICK DOWN 12%

Based on the MF Global Proxy statement filed in August 2011, there are rumors that the now defunct Primary Dealer will pay Jon Corzine a severance of $12.1 million. However, is that the full story?

The story that continues to expose the dirty laundry of Berkshire, much the Octogenarian of Omaha's chagrin, refuses to go away. According to the a newly released version of the Lubrizol proxy statement, it appears that there was a modest change in the "recollection" of events from Lubrizol's perspective, most notably a change in language describing the amount of information relayed to Sokol by Citi's bankers expressing just how seriously LZ was taking Berkshire's preliminary interest in the firm ahead of Sokol's major $10 MM stock purchase.

While the wacky desperation antics of America's nationalized bank (that would be Citigroup for the cheap seats) enter the surreal zone, after the bank just announced a 1 for 10 reserve stock split (finally returning the stock price to Al Waleed's cost basis, if not entrance market cap) and a 1 cent dividend (which effectively means the Fed can now exit the prop each failing bank game... but won't), the bigger question is what happens to the momentum algos that traditionally traded 500 million shares of Citi stock, providing a supporting base for the market courtesy of massive momentum surges that provided a buying feedback loop mechanism driven out of pure churn volume. Those days are now over, as the volume will plunge pro rata from half a billion to a measly 50 million shares. Furthermore, with algos receiving liquidity rebates on a volume basis, it is conceivable that the biggest piggy bank to the 3 man Ph.D. HFT operations is about to break, as exchanges cut their rebate payouts by 90%. And with the stock market these days being far more a function of volume churn than technicals or, heaven forbid, fundamentals, what happens with the natural HFT support to the market is anyone's guess. One simple assumption: the next time the S&P does a May 6, or a USDJPY flash crash, the liquidity providers will pull out that much faster, leading to a massive freefall without any of the foreplay.

Our friends at The Forensic Factor have been busy. After exposing one after another alleged Chinese fraud reverse merger, and forcing management teams to address investors about numerous allegations of impropriety, the small research boutique has come out with a report exposing what it dubs "the most preposterous Chinese reverse merger yet." As usual, in a world of shady transatlantic backdoor dealings, and cash strapped US exchanges willing to list anyone and everyone, regardless of whether their financials are even remotely valid, we believe it is our duty (without intent to profit) to expose companies that may or may not be fraudulent, particularly now that it is obvious that the SEC is fully endorsing the ponzi scheme of US capital markets. Quote TFF: "after a deep dive into AutoChina (Nasdaq: AUTC), The Forensic Factor ("TFF") has concluded that AutoChina is potentially the most dangerous Chinese reverse merger that we have examined. As the AutoChina story gets exposed, we would expect a significant share decline of at least 50% and a material increase in the short interest (incredibly, less than 1% of the shares are short - a true rarity among the Chinese reverse mergers). TFF believes investors would be prudent to avoid AutoChina at all costs. At the same time, we implore regulators to protect the investing public and launch an investigation into AutoChina."

FINRA oversees the broker dealers, and 70% are calling for increased transparency. FINRA blew them off. Those 70% represent America more than the large banks located on Wall Street. What truly amazes me is how little attention is being paid to this outfit.

As its memory of the unhappy market collapse of 1929 becomes blurred, it may lend at least one ear to the voices of The Street subtly pleading for a return ” to the good old times.” Forgotten, perhaps, by some are the shattering revelations of the Senate Committee’s investigations, forgotten the practices and ethics that The Street followed and defended when its own sway was undisputed in the good old days.

In short, in the process of acquiring Merrill, the Bank’s management misled its shareholders, the public, its board and its lawyers by concealing Merrill’s disastrous fourth quarter financial results in order to secure the shareholders’ uninformed approval of the deal. The Bank’s management then salvaged this potentially crippling situation by extracting billions in taxpayer bailouts by misleading the federal government. They did this, in part, by threatening federal officials that they would terminate the Merger Agreement based on a material adverse change—virtually the same material change they failed to disclosed to their shareholders prior to the vote. This action seeks redress under New York’s Martin Act for this conduct. - Andrew Cuomo

It appears as if the guys from the SEC that read my blog are contemplating doing the right thing. They have actually looked into the company which I have nicknamed the "Flim Flam Scam" (my opinion only, but I feel it is aptly coined of course) after many years of flim flamming and... (you can guess the rest)

Bank of America, suddenly left out in the cold, without the gentle hand of the SEC to part an angry sea of taxpayers, has filed its first response to the SEC since it found itself at odds with the regulator, courtesy of Judge Rakoff. Well, a response is a loose definition for 8 pages filled with "No responses."

Some serious fireworks go off as Clearly Gottlieb clutches at straws to make Lewis, from merely Patron Saint of Taxpayer Funded, No MAC Clause Invoking Acquisitions of Bankrupt Companies, into Saint Ken, Martyr of The Dispossed Investor.