Global Financial Crisis (Was: Subprime Meltdown)

[ewmayer]

Originally Posted by Anonymous

Hey, come on, Olive Garden makes good food. (I haven't gone to Red Lobster much myself, so I can't vouch for their food.)

I agree OG food *tastes* good, but on the fat-bomb-a-rama front, it's decidely a mixed bag. [Look at the % of fat calories in that foregoing Fettucine Alfredo. Breadsticks are 140 calories, too, but at least relatively low in fat]. Still way better than a typical entree at Hobees or even the typical *side* dish at Outback Steakhouse, though. However, you'd better take the nutrition info from that linked site with a large grain of salt, as I suspect some of their numbers may be just a tad suspect. [Not that I'm saying there could not be such a thing as a 3-calorie rack of lamb ... I'd just like to see where they get those lambs].

-----------------------------

NY Governor Paterson Warns of Economic Crisis

In a rare, brief televised address, Gov. David A. Paterson announced on Tuesday afternoon that he would call the Legislature into an emergency session on Aug. 19 to address what he called an economic and budget crisis confronting New York State as a result of plummeting revenues and rising costs.

The new governor avoided any mention of new taxes, instead arguing forcefully for austerity. He said he was calling on the Legislature to reduce the size of the state workforce; cut agency spending; reduce property taxes for homeowners; aid New Yorkers with the soaring costs of home energy; and even consider public-private partnerships that would take over state assets.

“Revenues are dropping dramatically,” the governor added. At the start of May, the state budget office projected a cumulative deficit of $21.5 billion over the next three years. Now, just two months later, that estimate has risen to $26.2 billion — “a staggering 22 percent increase in less than 90 days.”

Mr. Paterson offered another example of the rapid deterioration in the state’s finances. In June 2007, he said, the 16 banks that pay the most on their business profits remitted $173 million to the state treasury. “This June, just a month ago, they sent us $5 million — a 97 percent decrease,” he said.

He vowed, “We will cut spending. Government will learn to do more with less.” He called for help from business and labor leaders and New York’s representatives in Washington to support him.

He added, “It is time for New York and other governments to cut up our credit cards. The era of ‘buy now and pay later, and later’ is over. The faster we address this crisis, the faster and stronger we will emerge from it.”

Wow - a politician who actually proposes a rational solution [in fact the only rational solution] to a massive budget shortfall - a rare breed these days. Perhaps the advantage Governor Paterson has over the run-of-mill pandering pols is that his "vision impairment" is strictly of the physical variety. He obviously sees very clearly what is going on with his state finances.


Merrill Gives Up Gains, Is `On Hook' for CDO Losses

July 30 (Bloomberg) -- Merrill Lynch & Co. gave up any potential gains on $30.6 billion of securities it sold this week while remaining ``on the hook'' for losses, Bank of America Corp. analysts said, revising their earlier positive view of the sale.

Merrill agreed to sell collateralized debt obligations to private-equity firm Lone Star Funds for about 22 cents on the dollar and to lend about 75 percent of the purchase price. Bank of America analysts, who said yesterday the sale ``suggests the endgame'' for banks' CDO risk, today wrote they had overstated the ``positive implications'' of the transaction.

A drop in the value of the CDOs by about a further 5 cents would wipe out the equity from Lone Star and ``leave Merrill back on the hook for the exposure,'' said the analysts, led by Jeffrey Rosenberg in New York. Lone Star bought ``the upside of the underlying subprime assets in the CDO pools'' while Merrill retained ``most of the downside,'' they wrote.

LOL, funny how it took the "high-paid eggspert financial anal-ysts" at BofA a couple of days to figure out what the rest of us knew all along, namely that MER's latest positve spin on its latest "previously unanticipated" capital-raising efforts was a complete load of bollocks. But for the smart insider [which I suspect the BAC folks may have been, their public "whoopsie!" notwithstanding], yesterday's HUGE RALLY IN FINANCIALS! WORST IS OVER!! MERRILLL OUT OF THE WOODS!!! ALL IS WELL!!!! ECONOMY IS FUNDAMENTALLY SOUND!!!!! BUY, BUY, BUY!!!!!! was a great opportunity to cut their losses in shares of their brethren they might have been holding, or to load up on short positions [of the non-naked variety, of course.]


Lawmakers Pressure Banks to Hide Losses Longer

NEW YORK, July 28 (Reuters) - The Financial Accounting Standards Board, under pressure from lawmakers, will reconsider its time line for a controversial rule change that may force banks to bring trillions of dollars in off-balance sheet assets onto their books at its Wednesday meeting.

Fannie Mae's Political Immunity

President Bush is poised to sign the housing and Fannie Mae bailout bill, after the Senate passed it with 72 votes on the weekend. But an underreported part of this story is that Majority Leader Harry Reid refused to allow a vote on Republican Jim DeMint's amendment to bar political donations and lobbying by Fannie and its sibling, Freddie Mac.

This is a rare parliamentary move for a body in which even Senators in the minority party have long been able to force votes. The strong-arm play illustrates how politically powerful these government-sponsored enterprises remain even after going hat in hand to taxpayers.

Consumer confidence in surprise gain

NEW YORK (CNNMoney.com) -- A key measure of consumer confidence rose modestly in July after declining for six months in a row, according to a report issued Tuesday.

Despite the small improvement in consumer sentiment from June, consumer outlook remains "very pessimistic," according to the report by the New York-based Conference Board, a business research organization.

The board said its Consumer Confidence Index rose to 51.9, up from a revised 51 in June. Economists had expected the index to decline to 50, according to a consensus compiled by Briefing.com.

Ooh - up a whopping, statisically insignificant 0.9%, from "really, really, really, really, really, really, really, really, really, really, really, really, really, really, really, really, really dismal" to merely "really, really, really, really, really, really, really, really, really, really, really, really, really, really, really, really, very dismal" Excuse me while I guffaw. Looks like the econo-pundits are really grasping at straws here.

[mdettweiler]

Originally Posted by ewmayer

I agree OG food *tastes* good, but on the fat-bomb-a-rama front, it's decidely a mixed bag. [Look at the % of fat calories in that foregoing Fettucine Alfredo. Breadsticks are 140 calories, too, but at least relatively low in fat]. Still way better than a typical entree at Hobees or even the typical *side* dish at Outback Steakhouse, though. However, you'd better take the nutrition info from that linked site with a large grain of salt, as I suspect some of their numbers may be just a tad suspect. [Not that I'm saying there could not be such a thing as a 3-calorie rack of lamb ... I'd just like to see where they get those lambs].

Yeah, I see what you mean. Of course, as with the lamb, I challenge anybody to show me any fettucine alfredo that's low in fat.

[R.D. Silverman]

Originally Posted by Anonymous

Hey, come on, Olive Garden makes good food. (I haven't gone to Red Lobster much myself, so I can't vouch for their food.)

They serve (yech!) frozen seafood.

I much prefer Legal's.

[jasonp]

Originally Posted by Anonymous

(I haven't gone to Red Lobster much myself, so I can't vouch for their food.)

I was surprised how good the (most expensive, non-fried) fish was at Red Lobster. You can get terrible food at all the restaurants Ernst listed, but they all have a little good stuff too. I do think that Bennigan's had the most thoroughly deep-fried menu though.

PS: Agree with Bob, Legal rocks.

[Xyzzy]

"There was a microwave that looked like it had come out of a Harry Potter movie. It was like someone had sprayed it with glue, doused three kilos of porridge oats inside, then shaken it up and lined it with things dripping from the inside."

[ewmayer]

U.S. Economy Shrank at End of 2007, Misses Second-Quarter Growth Forecast

July 31 (Bloomberg) -- The U.S. economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, signaling that the country is in worse shape than investors had anticipated.

``We're in a recession,'' Allen Sinai, chief economist at Decision Economics Inc. in New York, said in a Bloomberg Television interview. ``It's going to widen, it's going to deepen.''

...

``This confirms the general picture of weakness, but it is surprising that GDP declined,'' said Martin Feldstein, who headed the National Bureau of Economic Research until June and serves on the group's recession-dating panel. He added that today's figures underscored his estimate that a downturn began in December or January. The last time the economy contracted was in 2001.

This is "surprising" only to CNBC watchers [a.k.a. "investors"] and economists [a.k.a. "blinkered ivory tower idiots"].


Banks Allowed to Continue Hiding Losses

Nothing to see here, folks ... banks are adequately capitalized ... just move along...


Bill Miller: Party Like It's 1999 ... 1998 ... 1997 ...

In inflation-adjusted terms, Bill`s heralded Superfund is now back in the mid-1990s - "15 years of beating the S&P500!" wiped out by "2 years of betting the bull market will resume any time!". Think I'll hold on to my silver WW2 nickels a bit longer. ;)


Connecticut Sues Moody's, S&P and Fitch Over Ratings

July 30 (Bloomberg) -- Connecticut Attorney General Richard Blumenthal sued Moody's Corp., Fitch Inc. and Standard & Poor's parent The McGraw Hill Cos. for allegedly giving municipal bonds lower ratings than comparable corporate or structured debt.

``We are holding the credit-rating agencies accountable for a secret Wall Street tax on Main Street,'' Blumenthal said in a statement. The complaints, filed today in Connecticut Superior Court in Hartford, seek redress for what Blumenthal called the companies' ``unfair, deceptive and illegal'' business practices.

Blumenthal, the state's top law enforcement officer, has been conducting an antitrust probe of the three credit-rating companies. Last month, he said firms that rate U.S. municipal bonds ``knowingly and systematically'' gave the securities lower grades, raising costs for state and local governments.

Moody's, under pressure from regulators and state finance officials, said last month it would change the way it rates municipal bonds and rank them on the same scale it uses for corporate and sovereign debt. Blumenthal said the dual standard benefited bond insurers, investors and the agencies themselves.

``This rating charade created a Wall Street shell game constructed by the ratings agencies for the benefit of the bond insurers,'' he said, adding that bond insurers profited from unnecessary premiums and interest paid by taxpayers.

...

State officials and regulators have criticized New York- based Moody's, New York-based Standard and Poor's and Fitch, a unit of Paris-based Fimalac, for using a scale that raised borrowing costs by holding municipal bonds, whose 10-year default rate was 0.1 percent between 1970 and 2006, to a higher standard than corporate and sovereign debt.

Many issuers bought bond insurance to improve their rating, a strategy that backfired this year when some guarantors lost their AAA ratings amid subprime mortgage-related losses.

The Connecticut probe has included whether the firms rank debt against issuers' wishes, then demand payment, or threaten to downgrade debt unless they're awarded business to rate all of an issuer's securities, Blumenthal has said.

He has also been scrutinizing links between Moody's and its largest shareholder, Warren Buffett's Berkshire Hathaway Inc.

As I`ve said previously, these ratings agencies are nothing more than multibillion-dollar fraud, racketeering and extortion enterprises, moreover [and most importantly] ones operating with the imprimatur of the U.S. government. [Specifically with an SEC-bestowed special designation which confers a huge business advantage over their non-special "competitors" - same kind of conflict of interest and encouragement of monopolistic business practices built into the mortgage-market GSEs.] Blumenthal needs to tread delicately, however, lest he find himself getting the Elliot Spitzer treatment at the hands of the powers that be.

[ewmayer]

Schwarzenegger orders cuts amid fiscal crisis

SACRAMENTO, Calif. - With California's cash dwindling and legislators still debating a new budget, Gov. Arnold Schwarzenegger eliminated 22,000 part-time and temporary state positions Thursday and ordered that 200,000 state workers receive the federal minimum wage.

His signing of the executive order had been expected since last week but stood as a stark illustration of the cash problem facing the nation's most populous state. Schwarzenegger apologized to state workers but said he had no choice.

"Today I am exercising my executive authority to avoid a full-blown crisis and keep our state moving forward," Schwarzenegger said. "This is not an action I take lightly."

Lawmakers have yet to agree on a spending plan a month after the state's fiscal year began, leaving California without the ability to pay for contractors, the higher education system and legislative employees.

Note that the minimum-wage salaries are temporary - state workers will receive the balance of their withheld wages retroactively once a budget is passed. [Or perhaps better, *if* a budget is passed.]

Oh, the hue and cry from the pols and employee unions is gonna be shrill - tonight's evening news here in CA should be rather interesting to watch, though I'll probably have to turn the volume down. Dang, can't we just stick to our regular diet of news stories about Oakland drive-by shootings, Berkeley treesitter hippies, which-part-of-the-state-went-up-in-flames-today and gay marriage?

[ewmayer]

Dealbreaker.com | A Primer On The Mortgage Bailout Bill

On a related note, a Bloomberg writer does a forensic-accounting-style analysis of Fannie and Freddie's balance sheets and finds some "interesting" accounting going on there:

Nakedcapitalism.com | And You Thought You Could Quit Worrying About Fannie and Freddie For Now

By the government's main capital measure, Fannie had ``core capital'' of $42.7 billion on March 31, or $5.1 billion more than required, while Freddie had $38.3 billion, or a $6 billion surplus. Meanwhile, on a fair-value basis, Fannie said its net assets were worth $12.2 billion, while Freddie showed negative $5.2 billion.

One reason the core-capital figures are so much higher is that the government lets Fannie and Freddie exclude tens of billions of dollars of pent-up losses on mortgage-related securities they're holding for sale, solely because the companies have deemed the losses ``temporary.''

Another reason is that core capital includes deferred-tax assets. Commercial banks, by comparison, normally don't get to count these in their capital, because they can't be sold by themselves and, thus, can't be used as a cushion against losses....

Start with Fannie. As of March 31, it showed $17.8 billion of net deferred-tax assets on its GAAP balance sheet.

Fannie's fair-value balance sheet doesn't show a separate line for deferred taxes. Instead, Fannie included them in an item called ``other assets,'' to which it assigned a GAAP carrying value of $45.5 billion and a fair value of $60.7 billion.

Using the methodology described in Fannie's footnotes, I was able to estimate that about $14.3 billion of that $15.2 billion differential came from adjustments to the company's deferred-tax assets...

Without that $14.3 billion of tax adjustments, the fair value of Fannie's net assets would have been negative $2.1 billion, by my math. Exclude deferred-tax assets entirely, and it would have been negative $19.9 billion as of March 31. (Fannie raised $7.4 billion of additional capital in May.)

As for Freddie, it showed $16.6 billion of net deferred-tax assets under GAAP as of March 31. Like Fannie, it put deferred taxes in ``other assets'' on its fair-value balance sheet.

Freddie said its other assets had a GAAP carrying value of $31.6 billion and a $42.5 billion fair value. By my calculations, using the methodology in Freddie's footnotes, it looks like Freddie wrote up the deferred-tax assets on its fair-value balance sheet by about $10.1 billion.

So, take out the tax write-up, and Freddie's net assets had a fair value of negative $15.3 billion. Exclude deferred-tax assets entirely, and that falls to negative $31.9 billion....

In its latest quarterly report, Fannie said ``we anticipate that it is more likely than not that our results of future operations will generate sufficient taxable income to allow us to realize our deferred tax assets.'' Hence, no valuation allowance.

Freddie gave a similar explanation in its July 18 registration statement with the Securities and Exchange Commission. The company also cautioned that ``if future events differ from current forecasts, a valuation allowance may need to be established which could have a material adverse effect on our results of operations and capital position.''...

Brace yourselves, taxpayers. Uncle Sam soon may have to write a very large check.

Interestingly, neither of the 2 major-party presidential candidates cast a vote on the bill - that has "massive political hot potato" written all over it.


From the U.S. Treasury's own press room: They can't say they weren't warned:

June 26, 2006: Remarks of Emil W. Henry, Jr., Assistant Secretary for Financial Institutions

There are times when certain words or phrases are used or overused to such an extent that they verge on losing their meaning. As anyone in the room today with teenage children understands, the impact of a parent's drumbeat of cautionary words, on any topic, can over time, diminish with repetition. As the public GSE reform discussion crescendos, I fear we may be at such a point with the phrase "systemic risk". If you have followed the arc of the GSE debate for the past few years then you will note that the terms "systemic risk" and "GSEs" are inextricable. However, such repetition could make the likelihood of a systemic event occurring seem more the stuff of intellectual musing than hard reality.

...

There also appears to be significant misunderstanding about what it means and why we need to be concerned about it. So, the purpose of my remarks today is to clarify what is meant by "systemic risk" as it relates to the GSEs, why we think it exists, what might transpire in a GSE-initiated systemic event, and why these are unnecessary risks that can and should be easily avoided.

At the outset, let me be clear on the meaning of systemic risk: it is the potential for the financial distress of a particular firm or group of firms to trigger broad spillover effects in financial markets, further triggering wrenching dislocations that affect broad economic performance. Perhaps a useful analogy is to think about systemic risk as an illness that can become highly contagious.
...

To address such a looming problem, the Administration has consistently argued for meaningful reform of the regulatory structure of the GSEs. This reform must include mechanisms to protect the broader financial markets and our financial firms and counterparties from unnecessary risks. The core basis for our policy of reform is the systemic risk presented by the size of the GSEs' mortgage investment portfolios and the corresponding concentration of risk in these two federally-chartered enterprises. Simply stated, our financial markets would be safer if these assets and associated risks were broadly redistributed. And to add insult to this potential injury, these huge investment portfolios are much larger than what is necessary to accomplish the GSEs' mission.

Well, it seems clear that whatever reform effort Mr. Henry referred to went nowhere. After all, "housing on ever goes up", right? I highly recommend the interested reader peruse the speech in its entirety, but note that the real kicker comes in the last few paragrahps:

Past history reminds us that serious financial problems in the GSEs are not only a possibility, but an unfortunate reality. And, I feel compelled to remind you that the federal government has taken steps to assist a troubled GSE in the past.

Do we really want to be faced with unwarranted and irresponsible calls for bailing out another failed GSE?

In fact, has it been so long that we have forgotten Fannie Mae's significant financial troubles in the late 1970s and early 1980s? During this time period, Fannie Mae's balance sheet looked a lot like a savings & loan. As interest rates rose, Fannie Mae's cost of funds rose above the interest rate it was earning on its long-term, fixed-rate mortgages. Like many S&Ls, Fannie Mae became insolvent on a mark-to-market basis. It lost hundreds of millions of dollars. Only a combination of legislative tax relief, regulatory forbearance, and a decline in interest rates allowed Fannie Mae to grow out of its problem.

Note that this recounting of not-too-distant history of GSE bailouts is not in itself "the real kicker" - no, the real kicker lies in the fact that since the 1970s, the aggregate size of the mortgage portfolios held by the GSEs has increased roughly a hundredfold, and gone from representing less than 5% of the U.S. residential mortgage market to nearly one-half, mostly on the unfair competitive advantage their U.S. government-backed special status gives them. That is the epitome of systemic risk.

[ewmayer]

GM's $15.5 Billion Loss Is 3rd-Biggest in Its 100-Year History

Aug. 1 (Bloomberg) -- General Motors Corp. reported a quarterly loss of $15.5 billion, the third biggest in its 100- year history, because of plunging U.S. sales and the declining value of truck leases.

The deficit of $27.33 a share compares with a profit of $891 million, or $1.56, a year earlier. Excluding costs GM considers one-time, the per-share loss was 4 times bigger than analysts projected. Labor strikes contributed to a $9.9 billion drop in North American revenue, and sales worldwide tumbled 18 percent to $38.2 billion. The shares fell.

A per-share loss nearly 3 times as large as the current share price! Complete disaster. However, given the delusional aspects of markets accustomed to "perpetual Greenspan asset bubble" mode, I would not be at all surprised to see this end the day in the green on buying from the "bottom is in!" crowd. As I write this, the shares are in fact only down 3% from yesterday's close, and have recovered smartly from an early selloff.


U.S. Jobless Rate Climbs to Highest in Four Years, Posing Economic Threat: he U.S. unemployment rate rose to the highest level in more than four years as employers cut jobs again in July, increasing the threat of a deeper economic slowdown.

Note that the Bloomberg article is based on the Government's fake employment numbers, which are useful only as a quasi-barometer of the overall trends: in other words the sign of the monthly change is usually right, but the magnitude is gerrymandered beyond recognition. More discussion on what the real numbers might look like can be found here.

Greenspan: Housing, Economy Still Far From Recovery: Former Federal Reserve Chairman Alan Greenspan said the US is “nowhere near the bottom” of the housing slump and is “right on the brink” of a recession.

Greenspan, who left the Fed in early 2006 and was succeeded by Ben Bernanke, has come under increasing criticism for allowing what many said was easy credit that set up the current financial crisis.

In the interview, Greenspan called the current crisis a "once-in-a-century phenomenon" that went beyond a liquidity crisis and was more what he called a "solvency problem."

Not that there ever was a "housing bubble" or anything, as Greenie likes to remind us. So the person who probably did more than anyone else to cause this "once in a century" crisis and who prematurely called a housing-market bottom way back when in Fall 2006 [right at the *start* of the housing meltdown] now correctly recognizes the problem, without accepting even the tiniest bit of culpability. What a hypocritical douchebag.


And Speaking of Fraud & Racketeering...

Merrill Lynch Defrauded Auction-Rate Bond Purchasers, Massachusetts Says

July 31 (Bloomberg) -- Merrill Lynch & Co. was accused by Massachusetts Secretary of State William Galvin of misleading investors about the stability of the auction-rate market at the same time the investment bank was marketing the securities.

New York-based Merrill ``co-opted'' its research department to help place the securities with customers, Galvin said in a statement from Boston today. The state's administrative claim asks the third-largest U.S. securities firm to ``make good'' on sales of now-frozen holdings, compensate investors who disposed of their bonds or shares at a loss and pay an unspecified fine.

``This company was aggressively selling'' the securities ``and its auction desk was censoring the research analysts to make sure they downplayed'' risks in the market, Galvin said in the statement. ``They knew the auction markets were in trouble, but the investors were the last to know.''

Merrill is the second bank sued by Galvin after Wall Street brokers abandoned their routine role as buyers of last resort for auction-rate securities in mid-February, allowing the $330 billion market to collapse. Massachusetts last month filed a complaint against UBS AG, Switzerland's biggest bank. A related investigation of Bank of America Corp. is ``still going on,'' said Brian McNiff, Galvin's spokesman.

Friday Funnies

On a more-humorous note to end the week:

SEC's Cox proposes "No Loss-Sale Rule"

"I was getting a pedicure the other day and I thought, 'Why not just short selling?' What about ALL selling?' Why not make a rule that prohibits selling a stock for a price lower than the last trade. We'd stop losses altogether. Everyone would make a profit. Unlike some of these other measures you've heard today, it wouldn't cost taxpayers a penny."

[ewmayer]

Originally Posted by Anonymous

Hey, come on, Olive Garden makes good food. (I haven't gone to Red Lobster much myself, so I can't vouch for their food.)

At the risk of being accused of "piling on", Yahoo! Health begs to differ as well:

America's Best and Worst Chain Restaurants

Grade: F
Applebee’s, IHOP, Olive Garden, Outback, Red Lobster, T.G.I. Friday’s

These titans of the restaurant industry are among the last national chains to not provide nutritional information on their dishes. Even after years of communication with their representatives, we still here the same old excuses: it’s too pricey, it’s too time-consuming, it’s impossible to do accurately because their food is so fresh. Our response is simple: If every other chain restaurant in the country can do it, then why can’t they?

Your Survival Strategy: Write letters, make phone calls, beg, scream, and plead for these restaurants to provide nutritional information on all of their products. Here are the phone numbers for each of the restaurants that refuse to tell us the truth!

[Click above article link for the contact info]

Interestingly, that same article gives McDonald's a B and Burger King a C - apparently less for their healthy menus than for the fact that at least least provide "nutrition" information. [And note I use the term very, very loosely].

[cheesehead]

Originally Posted by ewmayer

June 26, 2006: Remarks of Emil W. Henry, Jr., Assistant Secretary for Financial Institutions

Well, it seems clear that whatever reform effort Mr. Henry referred to went nowhere.

... and just what has happened, or will happen, to the perspicacious Mr. Henry nowadays?

Edit: from http://infrastructure.dowjones.com/D...spx?pageid=473 May 13, 2008

Understanding the inner workings of Washington is seen as a key element for investors wishing to tackle U.S. infrastructure opportunities. Few involved in the sector may have had a better perspective than Emil W. Henry Jr., who served for parts of three years as Assistant U.S. Treasury Secretary. While in the role, Emil was involved in such initiatives as reintroducing the 30-year bond, increasing the competitiveness of U.S. capital markets and evaluating the challenges presented by the growth in hedge funds and derivatives. When it came time for the veteran investment manager and investment banker to go back to Wall Street, he chose a slightly different route, joining Lehman Brothers’ private equity team and focusing on infrastructure.

Hmmm ... what were the circumstances of his time "to go back to Wall Street"?

On another search page I am directed to "Lehman Brothers bags former US Treasury Secretary" at http://www.altassets.com/news/arc/2007/nz11229.php April 7, 2007

Lehman Brothers Private Equity has hired Emil W Henry, Jr, former Assistant US Treasury Secretary for Financial Institutions, as a managing director. Henry, who will be based in New York, will focus on global investments in infrastructure and will report to Michael J Odrich, managing director and global head of private equity within Lehman Brothers’ Investment Management Division.
'Emil brings the right combination of skills and experience to head up this important business,' said George Walker, global head of investment management for Lehman Brothers. ‘With the skills of our private equity team and our global capabilities and platform, we are uniquely positioned to help our clients take advantage of the significant investment opportunities in infrastructure going forward.'

At the US Treasury from October 2005 until last month, Henry worked for Treasury Secretaries John Snow and Henry Paulson. Upon leaving the agency, Henry received the Treasury’s Alexander Hamilton Award. Before joining the Treasury, he spent approximately 20 years in investment management and investment banking, most recently as a senior partner, managing director and chairman of asset management with Gleacher Partners.

"the Treasury's Alexander Hamilton Award"? (not to be confused with many other Alexander Hamilton Awards)