Bank Settlements

Shares of Deutsche Bank AG dropped significantly in the wake of the Department of Justice’s request for them to settle mortgage securities probes to the tune of $14 million. Deutsche Bank told them no, but still, shareholders weren’t pleased. There is a neat chart in that article that highlights previous settlements and shows what the DOJ asked for and what was awarded. The data seems to support the bank’s response. Having been involved in negotiations in the past I can tell you how I approach a ridiculous offer: I usually just laugh. I suppose you can’t do that with the Department of Justice but you do have to wonder about their thought process. It almost seems like a Craigslist scam. Like one day they will make a settlement offer with an older, more naïve bank this isn’t very familiar with technology and the bank will just pay it because they’re scared and confused. Then the DOL will just high five and shout “We got one! We finally got one!” 

BlackRock is Aladdin

Riff-raff? Street rat? I don’t buy that. And neither does BlackRock apparently. The New York Times recently published a profile on BlackRock’s CEO Larry Fink and their analytics software, Aladdin. I thought the piece would talk more about how a man with the last name Fink made it anywhere in finance the but the article didn’t mention it, not even once. They did mention Aladdin, a lot, which appears to be a reflection on the firm itself. “Aladdin fills the monitors of most BlackRock employees. One portfolio manager even went so far as to hang a nearly cinema-size screen on his office wall in order to get the full Aladdin experience. And at the company’s investor day in June, Mr. Fink and other top executives mentioned Aladdin 82 times — more than any other business line.” It was at this point that I began to really get disturbed. It’s also really hard not imagining that they are referring to Disney’s Aladdin and not the software. Go ahead, read the quote again, but this time picture the movie. Great right? I mean, you would have to hang a large screen but I doubt you’ll get the “full experience” without Dolby digital surround sound.  I wonder how many new hires quit when they find out the truth? No, we don’t spend all day watching Aladdin. Anyway, they go on to mention the creepiest marketing video I have ever seen which mostly consists of employees (actors?) gazing into the screen with dead eyes and stating “I am Aladdin.” By the end of the 2 minute video it’s easy to believe these people were forced to legally change their name to Aladdin. That may be related to what comes across as Fink’s violent distaste for human attributes. Aladdin is even an acronym: Asset Liability and Debt and Derivatives Investment Network, not a folksy nickname. Who knew? “The future of finance, Mr. Fink has argued, lies with rules-based, data-driven investment styles such as exchange-traded funds, which track a variety of stock and bond indexes or adhere to a set of financial rules. The idea is that such an approach eliminates at least some of the potential for human error, while lowering costs.” The first draft likely said “eliminates at least some of the potential for humans” but they added “error” later. Personally, I would be so embarrassed by the name I wouldn’t even worry about what the software did. 

Psychic Hotline for Accountants

BBY, an Australian brokerage firm entered bankruptcy proceedings. Normally this wouldn’t be a big deal except that the court documents show the chairman was using a “psychic and professed vibrational healer” to provide one last look at firm budget forecasts before they were approved. Obviously, this person did a bad job, because you know, they are bankrupt. Still though, having worked with business owners I know that they tend to be incredibly poor sources for revenue projections. Just because someone is good at running a business doesn’t mean they are good at predicting the future. However, psychics are supposed to be good at predicting things, so in that way, it kind of makes sense. Maybe all the big firms use a psychic? I’ll have to run that one by Jeff. 

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