How to funnel your hard earned money into our I-bank : the Goldman primer

Its fucking amazing.

Amidst the current economic mess, while jobs are being lost in millions, people are being forced to leave their homes left right and center, life savings, 401ks, retirement savings of the common man are being reduced to rubbles, I banks (read Goldman Sachs) continue to churn out amazing profits from what is now nothing but a naked form of state-subsidized (read Obama administration) profit generating racket for the remaining few I-banks (Goldman primarily after Merryl, Bear Sterns and Lehmann managed to go belly up with greed, as a sidenote the prestigious scumbag and asshole of the decade award goes to (Sloan) Harvard alum and ex Merryl CEO John Thain for managing to award himself and his fellow execs 100s of millions of $$ in performance bonus exactly 8 days before they had to go to the US government asking for a bailout).

Ok lets start:

The chief players: Goldman Sachs, SEC, White house
Cameos: Merryl, Bear Sterns, Lehmann
Comic relief: AIG
Act 1: The great depression of 09 aka how wall street managed to ass rape you

The story so far (quoted in green):

A former Goldman chief, Rubin, presses the Commodities Futures Trading Commission(CFTC, a federal government regulation and enforcing agency for the market) to deregulate a type of derivative contract whose chief benefit to an investment bank like Goldman is that it allows it to lend more — the CDS being most useful as a tool to move investment risk off a bank’s balance sheet. Then another Goldman chief, Paulson, pushes for further relaxation of lending limits. Then Goldman jumps head-first into the housing bubble, buying tens of billions in CDS protection to hedge their crazy investments. This massive explosion in lending by banks like Goldman, fueled in part by the use of derivatives like CDS and fueled still more by the 2004 change in rules, puts an enormous strain on the economy, leading to giant holes blown in its hull by the end of 2007 and on through 2008. It follows that when Goldman’s chief partners in those CDS deals, AIG, collapses as part of this wave of crashes, Paulson — now Treasury Secretary — rushes to the rescue, pumping billions in taxpayer money into AIG that is quickly funneled to Goldman. Then a Goldman alum is put in charge of AIG while another bunch of Goldman alums funnels still more bailout money to AIG, and yet another Goldman alum is put in charge of regulating the derivative market that is the focus of most of the bailout efforts.

In the midst of all of this, something amazing happens. Goldman Sachs, along with Bank of America, Morgan Stanley, and a host of other “troubled” banks, reports a profit for its first quarter in 2009! How and why that happened is another fascinating story, for another time. For now the only thing to remember is that all the same people who got us into this mess — Rubin, Summers, Goldman in general — are now being put in charge of the cleanup by a president who spent most of 18 months on the campaign trail pledging to end the influence of money in politics.

Add this together with the obscene giveaway that is the Toxic Asset program Geither has just devised (Goldman Sachs “expressed interest in participating in the plan as an investor,” according to the WSJ), and you have an amazing situation. Between the Bush and Obama administrations, you have a bailout program that has now figured three ways to funnel money to Goldman, Sachs: via AIG, via TARP, and now via this trillion-dollar “Public-Private Investment Program,” which basically lends huge amounts of money to investors and provides guarantees against heavy losses. It’s free money, state-subsidized profiteering at its most naked.

Hail Goldman, fucking assholes, all of you execs and b-school alums at Goldman should be lined up in a row and asked to eat shit burgers followed by a "thanks a lot, can I have one more and please can you piss on me while you are flipping those shit burgers".

In today's fun news: I played poker at the airport on saturday after my flight got delayed on a supremely dodgy Boingo connection, and managed to rip $8k off a huge donkish player in less than 2 hours.

EFF U WORLD: so says Citi and AIG and I-Banks

And the plot (conspiracy?) thickens. Those following the markets would know that there was a memo by Citi chief Vikram Pandit in early March, that got conveniently (?) leaked to the media and that shows that Citi was pretty profitable in the first quarter of 09, quoting Pandit:

"In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007. In January and February alone, our revenues excluding externally disclosed marks were $19 billion".

Of course soon thereafter other such news came gushing in from other I-banks (JPMorgan, BOFA, GS..etc etc) and all of them reported major profits in that time frame (first two months of 09). For the layman like me this was utterly puzzling, banks with garbage on their balance sheets suddenly should not, by any logical means, start raking in big profits in a market with ever widening spreads and a ultra tight credit market.

But spending a ton of time reading a ton of, usually useless information, does have its perks when I finally came up on these whistle-blowing bunch of writeups from Zerohedge, there is a followup post on Rortybomb as well.

Basically what Pandit and his clique at the I-banks are upto this time is the following, (I quote in green)

• AIG, knowing it would need to ask for much more capital from the Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this, for lack of a better word, fraudulent scam. (this happened in the jan-early march time frame of 09).
  

• What this all means is that the statements by major banks, i.e. JPM, Citi, and BofA, regarding abnormal profitability in January and February were true, however these profits were a) one-time in nature due to wholesale unwinds of AIG portfolios, b) entirely at the expense of AIG, and thus taxpayers, c) executed with Tim Geithner's (and thus the administration's) full knowledge and intent, d) were basically a transfer of money from taxpayers to banks (in yet another form) using AIG as an intermediary.

So essentially AIG is a clearing house, it funnels in tax-payer money in billions and serves it up on silver platters to I-banks with a ton of garbage derivatives on their balance sheets as profitable trade opportunities. The sad part is that the banks then come up with blatantly false follow-up statements, on the back of these criminally-shady deals, announcing "Hello world we are profitable invest in us".

One wonders how much low can this supposedly respectable executives at I-banks stoop to? As I have alluded several times in this blog "Ethics for MBA, often publicized with vigor by B-schools" is an eye-candy meant for mary poppins.

Also to those disgruntled soul(s) who have spammed my mail box/comment section (comment moderation is now on) on the previous post regarding false claims and charges of plagiarism, which I-bank do you work for?

Some Observations on Goldman Sachs from a finance applicant's perspective

My weekend reading yielded some interesting titbit pieces of info that could be of interest to mba applicants as well as mba students interested in finance. The titbits however are not encouraging if you are thinking of I-banks/Wall street careers.

Background: What I will talk about is the so called derivative space in I/commercial banking, a particular member of this derivative space : credit default swaps (CDS) is now being accused of being the villain that brought down the financial sector.

The CDS for the layman is essentially an insurance against something (usually company bonds/debt etc). An underwriter (AIG) like your local auto insurer charges the insuree a monthly payment (coupon) determined by the CDS rate and if something bad happens to the insuree's holdings the underwriter ponies up the insured money just like an auto insurer pays for your wrecked car in case of accidents. Of course when all these CDSes started defaulting simultaneously (primarily because they were junk grade to start with, for example a pizza delivery boy in orange county,CA ,offered a 350k house loan on zero down, underwritten by AIG, packaged as CDS instrument by Lehmann... u get the picture), the insurer (AIG) was called upon by a myriad of insurees for the lumpsump payments causing the meltdown.

Now the derivative space has some more members besides the CDS notably :

1. interest rate
2. foreign echange
3. equities
4. commodities
5. CDS
   

Brief history tutorial for the layman: During the boom period in Wall street (1998 to 2007) , leading to the meltdown, the entire derivative space ballooned from $33 trillion to about $200 trillion, while CDS grew from about $150 billion to $5 trillion.

However another silent player in this dreaded derivatives basket seems to have risen in a more alarming fashion. It is the interest rate (1, in the list above, specifically swaps but also futures and forwards) that has grown from $24.8 trillion to $164.4 trillion!

In simple terms an interest rate swap (IRS) are merely contracts exchanging a stream of interest payments for another party's stream of cash flows, the underlying interest rate is often the Fed rate. Now associated with the IRS and derivatives is something called Total Credit exposure (TCE) which is essentially a metric that measures a bank's risky credit/risk eposure. Higher the number worse the bank.

Now for the bad news:
The Office of the comptroller of currency released a chart last week for the top 5 banks and the percentage of their total credit in relation to the potential toxic risky credits/derivatives arising from interest rate swaps (item 1 in the derivative basket above).


Table reproduced for better visibility:
Total credit exposure to risk based capital (%)
JPmorgan: 400(Q4 03), 384 (Q4 08)
Bank of America: 178(Q03,08), 179 (Q4 08)
Citi 260: (Q3), 278(Q4)
Goldman: 4(Q3), 1056(Q4)
HSBC : 664 (Q3), 550(Q4)

And drum-rolls please we have a winner. IT IS OUR OLD I-BANK PAL GOLDMAN SACHS WITH A STAGGERING 1056% % ratio of their total credit in terms of interest rate swaps.

The ramifications of this I leave to the readers, but just for fun imagine GS defaulting on these, ah wouldnt that make the AIG collapse look like peanuts. For those getting ready to join Goldman Sachs be sure to ask your bosses about these charts, Id love to have an explanation for their immense love of interest rate swaps. Also those in the class rooms do me a favor ask your fin-profs about these numbers, either way I'd love to know whats going on with this epic GS and IRS love saga. And a true love saga always needs a tragic ending, right ;-)

Charts Source :
http://www.occ.treas.gov/ftp/release/2009-34a.pdf:zerohedge :Office of comptroller of currency's quarterly report for bank trading and derivative activies

I am back --- with a whimper

• 8-6 has got boring, although I am still in research, our whole group has had a recent focus/image makeover, making us almost completely service- rendering bitches for our clients (internal and external).
• I don't like the projects I am supposed to work in 09-10.
• With oil and the economy in free-fall our lofty bonuses (announced Dec08 for 09) are going to be severely trimmed.
• I am feeling immensely strait-jacketed in terms of my career road-map.

Sum total of this bullet-based rant: I WANT AN MBA, again.

So after being out of the game for just about a quarter, I am back, back to play my part in that indy-500 of rat races aka Mba-admissions (drummrolls please) and that too at an unprecedented time.

My mood is sour and am feeling especially bitchy, so lets continue on the path of dourness and take a sneak peek into the current economic scene from an mba aspirant's perspective:

1. Sales and Trading : S&T was the reason I started looking into mbas. I wanted to be in a hedge fund running money like theres no tomorrow. Sadly investment research reveal total AUM for hedge funds have fallen to $965 billion in Jan from just about $1.9 trillion in May 08, an astounding 50%+ drop in just about 3 quarters. In may of 08 there were about 10,000 operational hedge funds, today that number is less than 6000, steamrolling towards the 5k mark, of course as hedge funds go belly-up hiring freezes, newly hired traders go over to cnbc and some audition for stripper jobs. Since I am feeling especially pissy here is the story of a hedge fund manager netting 750k anually who now works as a pizza boy at $7.95/hr,but he does deliver your pizzas in his leased Merc, soon to be repoed though.
   
   Former Morgan-Stanley junior banker/trader now working as a full-time NYC stripper netting 100k+.
   
   
2. I-banking : Sell side finance to start with (sell side is for the dummies btw), where you are essentially a middleman (akin to a pimp, pimping for money in expensive $2200 black suits and gelled hair, instead of the bing and glean that your average pimp puts on) putting together exotic products for your clients and often mixing in super-toxic little understood instruments into those product pools. But hey you still make decent dough, well you used to, if I was graduating today from a B-school I wouldnt touch an I-bank with a barge pole.
   
   
3. REITS (Real estate): I said I wouldn't touch I-banks with a barge pole if was graduating today, in that case I need to make a will forbidding my offsprings to use the phrase REITs in any source or form ever. A few charts for the pain that has now been re-christened Real Estate investment:
   
   
   What the first chart basically shows is the massive debt maturities that most REITs are now facing through to 2011. The problem is that REITs need to get financing/refinancing or some structural revolving credit line with their existing as well as new creditors to deal with these. Now those into Real estate will know that earlier this month Simon property group, perhaps the biggest player in this space (also the one with the best credit ratings on moodys and S&P), announced it was raising $500 million in bonds to take care of its debt at an astounding 10.15%!!! Pain anyone.
   

Now that my finance options are out of the way and the post is lit up in red, I'll retreat into my corner and sulk some more.

edit: I finished some catch up reading on mba related stuff and realized that there seems to be a shift in career focus towards clean energy, biofuels and stuff like that at most major B-schools. That is pretty surprising primarily because if you are rejecting Wall street based on your risk-averseness, then moving towards clean energy is almost surely suicidal. It is a sector that survives solely on subsidies and realistically has little chance to be a major/significant player anytime soon. The name though sounds chic and cool "Clean tech".

World blogger championship of online poker

I have registered to play in the PokerStars World Blogger Championship of Online Poker!

This PokerStars tournament is a No Limit Texas Hold’em event exclusive to Bloggers.

Registration code: 608823

Sign ahead: Crossroad

Oh yes I am alive !!!!

In a slight dilemma right now regarding the road ahead. So I'll spend this post outlining my current thought process (muddled obviously) and hoping that readers (if any are left) will come up with some constructive comments.

Right now I am stuck between deciding whether to pursue an MBA or pursue poker as my longtime career goal (MBA blogs maintain MBA parlance !!).

Each have their own pros and cons, but they aren't mutually compatible. Doing an MBA and getting into a long-work-hour job would essentially mean that between work and family (did i mention im tying the knot in Jan 09) time for poker would be extremely restricted if not completely non-existent. At the same time an MBA is a much much safer option than a high risk venture like poker.

When it comes to taking up poker full-time, heres the kind of timeline based framework I have in mind. My girlfriend finishes her PhD sometimes in 2011-2012, my green-card application wont come through till maybe 2013ish. Thus the earliest I can quit work and start playing pro would be in the 2013-2014 range (remember without a green-card I cant quit work as I'd be booted out of the US in seconds). Also to rake in any kind of decent dough from poker, I would need a poker-bankroll in the 50-60k range, maybe even higher, possibly 75ksih is a good number. My current poker accounts have about 15kish in them, so I have about a 5 year time-frame to get to 50kish. Certainly doable if I dont keep taking my wiinings out and go on binge spending.

Also of great importance is the fact that if I do go fulltime in poker, it gives me the independence of settling down in any city I want, basically in the same place where my girlfriend/wife goes to work. Not to mention the enormous freedom/independence it brings in terms of flexi work-hours.

Just to put things into perspective in terms of numbers, heres this year's numbers:

• 9-5 job : 115kish
• poker: YTD tournament profits: 50k
• poker: cash game profits: havent worked it out yet, should be in 10-15kish range.
• poker: some other significant profits in the 30ksih range
  

I havent done the math regarding how an MBA degree will stack up in terms of ROI versus full-time poker, but might be close, especially if I factor in the feel-good feeling of doing something I love and the flexi-hours and the opportunity of settling down wherever I want. I know of atleast one person (Rizen, see blog on left) who left an accountant job to get into poker fulltime.

Sigh, I hate decisions. Comments welcome

Catching up

Its been a while since I've posted, but unfortunately for the readers of this blog I plan to put them through some more misery before I'm done.

First of: 'Grats to MBA-veggie and Middle of Nowhere for securing the first known admits of the 09 mba blogosphere, and almost surely this is just a start.

As for me life has been kind of meh over the past couple of weeks. Nothing even remotely exciting is happening except that the Indian cricket team is whipping some creamy Australian ass back home. Oh and I finally finished "Frasier" on Netflix. Frasier has almost always been my favourite sitcom, followed closely by Seinfeld, and frankly the deadpan, snobby/snootish, understated and most importantly the refined play-on-word-humor (compared to the blatant physical humor of friends) of Frasier has always had me cracking.

When it comes to the dreaded GMAT preps, much to my non-astonishment I havent made an iota of progress, ah but theres always tomorrow.
Random links/news away from this blog:
Some new priceless sites where I can be found wasting my time:
Engrish
Go-fug-yourself

For you Dark Knight junkies, theres a Bob out there (no seriously the guy's name actually is Bob) making the bat-tumbler and batmobile from scratch. Place your orders with Bob here. View of Bob's home-made bat-tumbler:


Finally some balla-timepieces that successful poker players love to flaunt at the table (snaps taken by Nat Arem at the World Poker Tour 08 Final table):

















Finally heres something that I decided to get for myself as a part of the me-too crowd (this is my first shopping spree of any kind in well over 8 months, so indulge me for a second)

Its a Breitling Super Avenger, waiting for its arrival with bated breath !!!

A quick buck=running good in life

Those of you who follow this blog might remember this post where I said:

In this week's OMG news: I won a seat via an online mega-satellite (1k buy-in) to the Europeon Poker Tour-London No-Limit-Holdem Championship event, starting October 5th at the Victoria Casino, London. By winning the satellite, I get my buy-in (10k) for the tourney waived, free hotel, free food, free air-fare. I only need to get the visa and everything else is pretty much taken care of, EXCEPT of course freaking work. With a bunch of projects being worked on, my manager is going to flip out if I ask for vacation, lets see how things work out. If I cant make it to London, then I can probably keep the value of the seat I won.

Well as it turned out I could not make it to LOndon due to work commitments, but being the degenerate gambler, I wanted a part of the action anyway. So after several back and forth PMs and emails and AOLs, I bought 10% of Eric Liu's action. In the poker world, in big-buyin (entry fee) live tournaments (such as the 10k EPT london), often players will try and get an insurance by selling a part of their action, that is a backer takes a 10% stake in the player's buy-in and whatever profits (if any) the player makes, the backer takes 10% of that.

Anyhoo to cut a long story short, I had a 10kseat already that I couldnt play in, so I redeemed the seat value for money and bought 10% of Eric's action(incidentally I bought 10% stake in 3 other players for a net 4k investment). And while 3 of my 4 horses came out duds, Eric hit the motherload as he finished 4th --> results here , for a $470k payday for him and a $47k payday for me. I am running really really good in life at the moment, but my taxes are going to get super-complicated next year.

Good luck to all those waiting for your MBA admission results, godspeed.....

PS: I found this interesting blog post by Steve Jacobs (known in the online poker world as stevesbets), he is a Upenn undergrad who dropped out of penn's grad school to play poker professionally (over 1/2 a mill in winnings in 2 years he played pro poker) and last year had applied to several top b-schools (got into fordham, nyc), but was rejected by wharton. He went absolutely ballistic because of the wharton rejection and his follow-up with Wharton and the whole experience associated with that is a very very good read.

Quantum of Solace

On Black Monday markets worldwide collapsed by 20%, today we are down just about 9%. Not everything is bad in today's world see !!

In this week's OMG news: I finally managed to ride my first stock to $0.00. I had aggressively bought Wachovia bank-WB when it was part of the financial rally early last month, managing to make a killing as it moved from the 9s (bought a big chunk at 10.x) to the 20s. Even booked a big chunk of those profit, but still held onto a fair number of shares. And today it is at $1.84. Life is good. Oh and yes the market is a bitch.

Cuurently: On life tilt. And contemplating moving my whole equity-portfolio to my poker accounts. To put it in perspective, ROI in poker 35% (essentially it means that on an average everytime I play an online poker game I make $45, extrapolate that to well over several thousand games), ROI in stock (YTD): -13.5%. Did I say life tilt??

United Sovereign Socialist States of America and $700 B

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency”

Yes this is one of the lines in the current 700 billion USD bailout-bill that the Treasury Sec of the United Sovereign Socialist States of America, formerly known as USA, Henry Paulson (formerly of Goldman Sachs) has sent to the Congress for immediate approval. Please re-read the sentence and try for a second to grasp its ramifications.

What this means is that once the bill is passed putting 700B of the taxpayer's money at super-risk,neither the secretary, nor the financials institutes who would be bailed out, are in anyway accountable to the people for either their past actions (no judicial hearings, no congressional hearings on their shady dealings) or for their future actions (meaning we will have no idea where/how/whether the 700 B will be used).

Now for those who are still unclear of what some of these so-called "shady" dealings that the big financial instituions have been practising for so long (out of pure greed) heres a primer (for all you mba applicants/students/alumni/b-school adcoms/faculty, remember while reading , that business ethics is something that the mba machinery has preached like for-ever, to me at this point it looks like eye candy at best, at the end of the day what matters to the mba machinery is $$$$ and nothing else):

• Sub-prime : This is something we all know, but the real problem arose when Lehman and its clique developed financial instruments via which they started trading these mortages as equities.
• Credit Swap: AIG owns a piece of a $500 million sub prime paper (packaged and sold by Lehman), but it aint sure whether the mortagee can pay him back. They go to a $100 million Hedge fund and ask him to cover/insure this mortgage they are holding. Now the insurer (the hedge fund here) has to provide some collateral, usually of the same value as the object being insured (500 mill). But the hedge funds get greedy, AIG hopes no one will notice, and a 100 mill hedge funds acts as an insurer for a 500 mill package. This is credit-swap. Currently the credit-swap market is worth 45.5 trillion dollars (twice the enitre worth of the whole US stock market).
  
• Leveraging : A typical Hedge fund takes 2% of Asset under management (AUM) as management fees and 20% of all profit as benefits packet. For a 100 mill break-even hedge fund that means that 2mill is what the fund-runners get. But hey, thats monopoly money on Wall street. Sheeeeshh. Hold on, suppose we leverage 10:1, so now instead of 100 mill AUM, our books will show we have 1000 mill AUM. What about our management fees, oh yea they went up 10 fold too. Lehman. Goldman, Merryl and the whole brotherhood was leveraged upto 30:1.
  
• Coming soon to a Wall street near you: ARMs (adjustable rate mortages), credit defaults, retail non-housing loan defaults etc etc.
  

But unfortuntaley the near Armageddon that these financial executives have brought in has not yet ended. With the govt sponsored free money (a mere 700 billion) that will soon be in Wall street heres how the bankers are reacting to it (via NYT)

• Wall Street is lining up at the trough for a piece of the action, lobbying to run some of the $700 billion fund — and take huge fees — for their own mess.
• And then there is the jockeying among the banks so they can sell their absolute worst stuff to the government — even loans that have nothing to do with mortgages — and change the rules in the process. The Financial Services Roundtable, which represents big financial services companies, wrote an e-mail message to members on Sunday suggesting, laughably, that “the government bid for the assets should not count as a mark-to-market value for accounting purposes.”

Next time some Bschool reps start preaching about their new course on the ethical business, be prepared for some chosen profanities coming your way. Oh and in the meantime, for those of you still writing your essays, please dont forget to leverage your lies 30:1 or more. I know I'll be doing it. After all its an excellent prep for the business world, especially the finances.

When pictures say a thousand words

For many of us wannabe MBAs, especially those interested in finance, the week of Sept 12-Sept 19th was a once-in-a-lifetime joy(?)ride. Call it a black swan, call it the beginning of the end for I-banks, call it a mere blip for the think-long-term advocates, call it whatever you want, but sure as hell this was one unforgettable week (actually this is turning out to be one unforgettable year !!).

If you fell asleep on the 12th. and are just waking up, heres a view of last week's mayhem (via tradermark):



Interestingly inspite of the absolute carnage in the market (driven almost in whole by the financial crisis), on Friday Sept 12th (week before the carnage) the S&P 500 closed at 1251.7 and on Friday Sept 19th it closed at 1251.3. So if you were truly asleep ala Rip-Van-Winkle, you would have woken up a week later, fired up google finance, and said to yourself "Blaaah, what a boring market, the indices havent moved an inch". Is anybody reminded of the Japanese markets of the mid 90s ?

As I get ready for my MBA apps, I wonder how this market will effect the ROI of a 150k+ MBA education. Will it be something like this for us fin wannabes:



In this week's OMG news: I won a seat via an online mega-satellite (1k buy-in) to the Europeon Poker Tour-London No-Limit-Holdem Championship event, starting October 5th at the Victoria Casino, London. By winning the satellite, I get my buy-in (10k pounds) for the tourney waived, free hotel, free food, free air-fare. I only need to get the visa and everything else is pretty much taken care of, EXCEPT of course freaking work. With a bunch of projects being worked on, my manager is going to flip out if I ask for vacation, lets see how things work out. If I cant make it to London, then I can probably keep the value of the seat I won.

Diamond and Kashyap from GSB on the current market

There is an interesting piece at the Freakonomics blog, where Doug Diamond and Anil Kashyap from the GSB give us a rundown on the current turmoil in the financial sector. They talk about why Lehman had to fail, Freddie and Fannie had to be rescued, AIG and the bleak scenario going forward for the fin service sectors.

A part of this post for the utter layman goes like this:

I do not work at Lehman or A.I.G. and do not own much stock; why should I care?

The concern for the man on Main Street is not the bankruptcy of Lehman, per se. Rather, it is the collective inability of major financial institutions to find funding.

As their own funding dries up, the remaining financial firms will be much more cautious in extending credit to normal firms and individuals. So even for people whose own circumstances have not much changed, the cost of the credit is going to rise. For an individual or business that falls behind on payments or needs an increase in short-term credit because of the slowing economy, credit will be much harder to obtain than in recent years.

Yesterday a friend of mine with a spotless credit record, super high credit score was denied a car lease, on the grounds that his credit history was not "sufficient for him to lease a second car when he already has one", his is a 150k income household.

Interesting times ahead.

Lehman Layman

The I-Bank behemoths have been crushed, the S&P has broken the 1175 mark (Bear-Sterns low of earlier this year), the Russian stock market has been halted, the retail investors have their hides nailed to the wall and on the back of these crushing news heres what the compensation/retirement/severence packages for the executives of these greedy, unregulated jackasses look like:

(1) The demi-god of I-banking Richard Fuld,CEO Lehman:
Awarded $71.9 million by his board for bringing down Lehman. Interestingly I learnt via Tradermark that in Lehman's board (supposedly in place to rein in rogue jackass CEOs like Fuld, who is best known for launching scathing public attacks on his executives in meetings) 9 are retirees, 4 are over 75, 1 is a navy admiral, 1 is a theatre producer, only 2 on the board ever had any direct contact with the finance industry. The board has a risk assessment commitee that has met atleast twice in both 06 and 07 (via SEC filings) and to them everything was fine.

(2) Merryl Lynch mariachies:

• Current CEO John Thain took up Merryl's reins in Dec 1 of 07, after being offered a 15 million USD signing bonus. Since Mr.Thain's first day in office Merryl's shares have fallen a mere 60% . If he decides to leave after the merger he is guaranteed another 11 million USD.
  
• Trading Chief at Merryl Thomas Montag who is at Merryl for less than 6 weeks (joined Aug 6th, 2008) is expecting 76 million USD in accelerated compensation of he decides to leave.
  
• Strategy head Peter Kraus who is at Merryl for less than a week now (yes you heard it right) will get 95 million USD for his hard work over the past week.

In the meantime 8%+ of my portfolio has been shaved off in the past 2 weeks. God bless Corporate America.

Apple geniuses now launch the iThing

Attention: All marketing MBA aspirants,students read and read and re-read this post.

Gotta hand it over to the marketing geniuses at Apple It started with the mac followed by the ipod, then a million versions of the iphone (a million models of which are now on their way to be re-called) and now ladies and gentleman :
#################################################################
APPLE LAUNCHES: iThing (image below)
#################################################################

From Apple's press release:
World renowned cool company Apple Inc. has launched their latest product, the iThing – a strange, minimalistic handheld device with no apparent features or uses. Now available in stores globally, the iThing is unbelievable sleek, sexy, desirable and useless. While even Apple has admitted that they have no idea what it actually is, this hasn’t prevented millions of Mac fans from lining up outside retail outlets from the wee hours of the morning to be among the first to own one.

Complete coverage and details can be found here. I am off to the Apple stores, how about you???

Vote for OMG

Since September is turning out to be a sucky horrid month, I decided to change careers, hoping for some serious support from the mba blogosphere

Dont forget to vote-->OMG

The Good, the bad and the ugly

I found this flowchart on things to say after sex depending on the quality of the said sex.

Some of the usable ones:

Good sex:
- Animal sounds ---> RAWRRR--> T-Rex mating cry
-Inner sounds------> Mmmmmm, Oh, Oh, Oh Yeaaa
- Romantic--> You are beautiful like the moon.
-Foreign/Subtitled Passion----> Anything french

Bad sex:
-Animal sounds---> Whoooliluii --> Whale mating cry
----> Baah Baaah-> Sheep
-Inner sounds--> Booooo, blaaaahhh, Yabba doobie Dooobe Dooo
-Romantic---> I love (not your partner's name) (not their gender) soooo much
-Foreign/Subtitled Passion-----> Heil hitler

Some addendums on the bad sex (via Amit Varma ):

-Can you atleast cook?
-I need to blog some pictures of this. Say cheeeeeese.
-Done. 100 girls in 100 days. I won the bet. I don’t need to do this any more.

Good luck picking.

World Championship of OP (WCOOP '08)

It is that time of the year, the time to burn a big hole in ones pocket. Today marks the start of the 2008 World Championship of Online Poker over at Pokerstars. It is a 20 day long series with more than 30 championship events and close to 30 million in prize money (schedule below in the image). Unfortunately the start times are horrendous (afternoons in the US) and I will defi not be able to play most of the weekday events (though I havent takes a day's vacation this year, hence ......)

Even then I am playing about 12-15 of the events and thats 15kish straight in buy-ins. Sigh.

Also there are a whole slew of sidebets and being the degenerate gambler, I am part of both the team and individual sidebets over at P5s. Rules for the sidebets :
(1) For teams: 3 memeber teams each team putting up 6k, top ten finishes by each player in a team will be tracked for points, currently there are 7 teams in on the sidebet, winning team takes it all (42k).
(2) Individual: 2k per person, same tracking rules as above, winner take all.

Now for the schedule (courtesy moorman):



Going to be a bad bad month of September, I already feel like a degen donkey. Oh well.

btw are I-bankers/hot-shot consultants allowed to write off gambling losses on their expense account?

Shipppp itttttttt sonnnnnnnn

Got my biggest online tournament score in poker yet---> on sunday--->on full-tilt,


Wait for it wait for it wait for it

$ 7 5 , 0 0 0 . 0 0 0 0

YUPPPIEE ....
SHIP IT ALL BABY
ZOMG
ZOMG

that should pay for a year's tuition at B school and cover one essay's material too right????

weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee, as you can see OMG has been zapped with an even bigger OMG, would be difficult to concentrate on any stuff over the next few days... forgive thys pottiness for the moment.... though a good part of sunday late night, after the win, was spent at a certain posh gentleman's bar blowing $1 bills with friends ;-), that 75k could have gone way bit lighter by the time the night ended ;-)

but still

OMG

Fit fitter fittest

Mirror mirror on the wall who is the fittest of them all

Reading this post about business school selection and a gazillion more posts of this kind, in which people fret and fret and fret yet again about finding their "fits" for a B-school, I decided to make a small post to highlight my thoughts on this issue.

Warning : this post does not not apply to anyone who is going for a very narrow particular focus, that only a tiny handful of schools might offer, but for the rest of you read on. Note: binge drinking, bar-hopping across Europe, social treks to somalia, mount everest expeditions dont interest me, so all that would be left out of of the fit equation as well.


To begin with I am fairly simple person with fairly simple needs when it comes to a MBA program. First and foremost it needs to be a top 10 program, a top 15 at worst, there would be no justification for me to leave my current job (which I like, not love as most of us mortals have a hard time finding jobs that we are doe-eyedly in love with) if its not a top 15 program atleast.

Now as soon as you set up this filter what happens is that most of everything else that you want from a MBA program (salary, strong alum network, good courses, plenty of diverse opportunities), kind of fall straight into your lap.

After all a top 15 MBA program will NOT in God's worst day have a dismal placement record, it will almost always have a decent balance between grads it sends out to consulting and finance (2 of the most commonly sought after post-mba professions), it will have a strong alum network, courses offered by them will be more or less on an even keel in the ball-park sense, yes some may be more strong in a p'lar field, and some in another, but that is again way over-exaggerated. Believe me a couple of course in a p'lar subject/concentration/field is not going to make you an expert in that. Having specialized in a particular field myself take it from me that specalization in any field comes from research work and not course-taking, courses give you an idea (note that it is just an idea not even an in-depth grasp) of the fundamentals, and an expert then builds on those fundamentals through independent research. And anyway an MBA is not designed to make you a specialist, go for fin PhD for that.

So why the all the hulaboo about finding schools that "fit" you or as it is more popular to say "Finding my fit in schools" ??? Barring the most miniscule of subtleties, what the effing difference does a MC wannabe MBA applicant care if he is going to Wharton/Kellogg?? If you have a festish for the Kellogg campus, well and good, good for you (I btw have negative fetish for HBS, in the sense that I absolutely loathe them), but apart from that, from a holistic big-picture MBA point of view it doesnt make an iota of difference whether you land up in either of the two.

A much better, more practical question and more realistic question is the following:
"Given my interests, background, my so called profile etc etc, in which school do I have a realistic chance of getting in".
Once you've identified schools based on the above filter, you can then go about in a logical fashion trying to decipher the school's other vital stats of interest, which, again, if its a top 10 school, the subtleties with be 19-20 at best. And I guess in a way many applicants mix and mash and muddle up the question of their chances of getting in with the "fit" factor.

In other OMG news: I have gone through Montauk !! Maybe I 'll review that bible sometime down the line, reviewing bibles though are oft considered to be the work of heretics !!!

Till next time, cheerio baby.

New badass setup

Finally this weekend I got around to setting up a kind of formal office at home for playing poker. My current setup looks like this:

I have 2 dual screens with 1600X1200 resolution, this will confortably allow me to play 8 tables at a time without any kind of overlap or glitch in resolution. The box itself is pretty standard and nothing fancy except that it has a kickass graphics card.

And now for your visual pleasure here are some real real badass poker setup from the pros:

This is Tiller's setup, he has a TV hooked up to his desk as well, the two right screens are where he is playing online (8 tables, the 8 ovals).

This is Dag "dmikkel" Mikkel's setup. He is a high stakes cash/tournament player playing at nosebleed levels of $100/$200 and above (meaning at ay given time he is sitting with 30k+ plus on the table).

This is Cole "cts" South's setup, you can see the number of tables (the ovals on the left screen) he is playing at a time. And on each of those tables he is sitting with atleast 20k. (do the math)

This is Tom "Durrrr" Dwan's (guy on the right) new office, on the process of being setup. Durrrr is currently the most prolific high-stakes player on the net, winning and losing a ferrari a day.

Here is a recent 150k worth hand between durrr and phil ivey on full-tilt (this is what the online tables look like, the ovals in the pics above):

Ok, lets play some poker now!!! I can almost hear the money train going CHI-CHINGGGGGGG !!!