Sometimes people get it right.
From one human race, irrespective of skin color, the condemnation and corrective action applied to Los Angeles Clippers owner Donald Sterling in four days -- four days -- is one of the broader, more public displays of a social conscience acting without equivocation.
Sterling had his defenders, of course -- Donald Trump had an excuse, Alex Jones’s website had an explanation, Rush Limbaugh got a key detail wrong -- but we’re going to count them as three-fifths of a human for purposes of this census. From Joe Sixpack to the president of the United States, a nation of people with a brain stepped up and said enough: You don’t get to be among us anymore. Technical foul, ejection, ostracized. The NBA’s reaction was the wildcard.
So then, standing up straight and tall and making all of us proud where David Stern never did, new NBA Commissioner Adam Silver did not waste time and did not try to nibble around edges or do anything that might be considered palatable to both sides. He exiled Sterling. The league’s team owners, of which Sterling is the most senior member, didn’t flinch either -- yet.
Now we have to see whether the owners can finish the job and force him to sell the team. Yeah, there’s a risk he could sue them on antitrust grounds, but it’s not an open-and-shut case. Sterling’s franchise has rarely seen better times, and he would probably get a fair price for the team, so any claims that a forced sale diminished the team’s sale value would be a stretch if the price was anywhere near competitive. Here’s hoping they kill the beast.
And what does a lifetime ban matter anyway when the guy is 80? Cash your chips, old man.
Criminals who take shelter behind human shields are the lowest, which may explain why the huge banks get away with the crap they get away with. Anxious about collateral damage to livelihoods and an entire financial system now riddled with banks like BNP Paribas (BNP) and Credit Suisse (CSGN) (today; tomorrow it will be some other institution), authorities have always had to negotiate and rarely get to take that shot.
This time, shots might get fired.
Those two banks are likely targets for criminal charges by federal and state authorities in Virginia and New York for operating with the apparent belief that laws apply only to those who can’t figure out how not to get caught or who can’t afford to build the financial penalties into the cost of doing business.
Credit Suisse’s alleged crime, helping Americans evade taxes, seems awfully quaint. No one minds when Congress does it. But that’s a topic for another day. (Yesterday, in fact.) However, being the banker to regimes in Iran, Libya, Sudan and Cuba (poor Cuba) -- something Credit Suisse has also done -- is very worthy of live fire from the Justice Department and its man in New York, Preet Bharara, as well as Benjamin Lawsky and others who have had enough.
There will probably be deferred-prosecution agreements. In the past it’s been HSBC, ING, Standard Chartered, ABN Amro, Barclays, Credit Suisse (again) who negotiate their way out of their misdeeds. Who will it be tomorrow?
Big day for data. First, about an hour ago euro-area inflation came in at 0.7 percent, trailing economists’ forecasts for 0.8 percent. Coming a day after Germany reported April inflation also rising less than forecasts, the data add more impetus for Draghi’s stimulus plans. In Asia overnight, the BOJ didn’t add stimulus because it predicts inflation will gather pace in the next two years.
GDP at 8:30 a.m. and the FOMC statement at 2 p.m. New York time are the highlights in U.S. economic data today, which also include mortgage applications at 7 a.m., ADP payrolls at 8:15 a.m., and Chicago purchasing managers at 9:45 a.m. Find the Fed watchers’ guide on what to expect today here.
According to the U.S. corporate calendar, 48 companies will report earnings today, which may sound like a lot until you see that tomorrow the number is 75. Today earnings include ADP, MetLife, Time Warner, IAC/InterActive, Carlyle Group, and WellPoint.
So much for that rally in Internet stocks. Nasdaq 100 futures are dropping this morning after the index’s 0.82 percent gain yesterday following earnings reports late in the day from Twitter (TWTR) and EBay (EBAY) that left the market cold.
EBay’s second-quarter sales estimate could trail analysts’ and its profit projection does. Its shares fell in after-hours trading yesterday, as did those of Twitter, which reported user growth slipped to 25 percent from 30 percent in the fourth quarter. Twitter CEO Dick Costolo is scheduled to be on Bloomberg Television at 10:45 a.m. today.
Back to your “edge” for a minute. U.S. regulators also appear to be ready to move on another flank in this battle, the one most susceptible: Your paycheck.
Getting paid in convertible debt doesn’t sound like such a great option to us, either, but the Fed’s giving it closer consideration, according to Caroline Salas Gage and Craig Torres today. The OCC also is sharpening its knife and might adopt a greater enforcement stance for oversight of boards of directors.
Regulators figure that if executives hold more debt -- which would fall in price if the bank approached insolvency -- they also would be inclined to conserve capital and manage risks better, Gage and Torres write.
Why does it have to be this way? We asked Arthur Levitt.
“The attractiveness of big compensation, the attractiveness of a lot of money that draws people into the industries that pay a lot of money, tends to make those people less concerned about the possibility of losing some of it,” the SEC’s former chairman tells us. (He's also a Bloomberg L.P. board member.)
“The emotional impact of it is less of a factor than the greed factor on the other side. I don’t think that this will totally overcome the pull of the greed factor motivating excessive compensation.”
Back to work, everyone.
It makes sense in some twisted way that the highest-paid chief executive in the U.S. last year works for a company that has never turned a profit.
Cheniere Energy’s Charif Souki’s 2013 pay was more than double his compensation in 2012 and more than five times what Exxon Mobil’s Rex Tillerson made last year, ace executive-pay reporter Laura Marcinek writes.
He’s also a quick seller. Souki has sold 2.8 million shares since the beginning of 2013. Tillerson, who runs the world’s largest publicly traded energy company with 2013 profit of $32.6 billion, has not sold shares since 2011. Plus, his name is Rex.
But the Cheniere stock has gained 1,320 percent in the past five years, so what shareholder is going to complain?
Was it any coincidence we learned that Hugh McGee was leaving Barclays (BARC) on the same day the bank announced it was going to quarantine the parts of the business it plans to exit and hand what it’s going to keep to Tom King?
Not to Otis Bilodeau, Bloomberg’s executive editor for finance.
“There’s upheaval in the upper ranks at Barclays as it struggles to figure out where and how it can compete, particularly in investment banking,” Bilodeau tells us. McGee “didn’t get the brass ring -- that went to Tom King, who’ll be running the entire corporate and investment banking business. So Barclays is trying to clean up and clamp down, not exactly an ideal environment for a big-money dealmaker like McGee.”
Elliott Management’s Paul Singer has some sneering words for the Federal Reserve and Yellen, according to the Wall Street Journal. In his latest quarterly letter to investors, Singer says the Fed is a river that has overrun its banks, “achieving total political power in a political vacuum, without the accountability of being elected,” the Journal quotes him as writing.
“The Fed (along with other central banks) is fully immersed in fiscal policy, arrogating more and more responsibility for the functioning of the global economy, picking winners and losers in purchasing financial assets, directing the allocation of credit and making ever-bolder predictions ever-further into the unknowable future,” he writes. The Journal story says he referred to Yellen as “Yellen the Magnificent.”
It’s possible the Fed’s actions in the past five years have been less than conducive to Elliott’s ability to make money. What good would cheap money do a hedge fund?
We always kept a tie in the desk for those days when an unexpected visitor was coming by. These days, it appears a comfortable pair of shoes is going to be needed more than wingtips or heels.
When once meetings were a guarantee of donuts and coffee, they now are increasingly being held in an atmosphere of health and exercise. Walking meetings is the thing from Silicon Valley to Washington to New York, as Margaret Talev and Carol Hymowitz report today.
“Having Stanley, who has to be walked every few hours, is one of my inspirations, but holding meetings outside is memorable, and no one complains in New York if they’re getting a little exercise,” says Nihal Mehta, chairman of mobile-advertising company LocalResponse Inc.
He’s not talking about his CFO. He’s talking about Stanley the dog, who provides a built-in excuse to get out from behind the screens and out into the fresh air.
OK, not fresh-fresh. Stanley doesn’t mind.
When “Star Wars” came out, we went to see it about six weeks in a row. So did you. As we grew older, though, we let go of the force a little. We saw the original first three, but by the time Natalie Portman and Ewan McGregor were running around in funny robes, we were pretty much long gone.
It was officially announced yesterday that Disney (DIS) has persuaded Mark Hamill, Carrie Fisher and Harrison Ford to reprise their roles from the start of the franchise. So will Peter Mayhew, who played Chewbacca; Anthony Daniels, who played C-3PO, and Kenny Baker, who played R2-D2.
The movie will be directed by J.J. Abrams, who has directed or produced some of the more successful movies and television shows of the past decade, including “Star Trek” reboots, “Lost,” the first TV show with a title that described its viewers, “Cloverfield,” “Super 8,” the TV show “Alias,” and even an episode of “The Office” (U.S. version). He’ll write it with Lawrence Kasdan, who was a writer on the second and third installments, “The Empire Strikes Back” and “Return of the Jedi.”
Sure, these old goats don’t run like they used to. Who cares? This movie is going to make Disney a lot of money. A lot.
Is there some kind of tape-recording fetish in the NBA?
Less than a week after Donald “Big Daddy” Sterling was revealed not to be the lifetime achiever the Los Angeles NAACP had somehow thought he was comes news that Darren Erman was fired from his job as assistant coach by the Golden State Warriors on April 5 for making secret recordings of almost everything -- coaches’ meetings, coach-player meetings, and banter among coaches hanging out in the coaches’ room, ESPN reports.
The story raises the question of what he was doing with the tapes and whether he had a client. “Was he taping it for himself or was he taping it for management? That’s not known,” a person familiar with the incident told ESPN. “But he had a lot of communication with members of the front office.”
Erman is the second assistant coach to be jettisoned from head coach Mark Jackson’s staff. Brian Scalabrine was reassigned to the team’s development-league franchise after failing to get along with Jackson and other coaches, ESPN says.
Erman is OK. He’s now at the Boston Celtics as director of scouting, working for Danny Ainge, which makes sense.
If Flyers Chairman Ed Snider, 81, is caught complaining about Canadians coming to his hockey games, we officially have a problem.
The Rangers went to South Philly last night with plans to wrap up their first-round playoff series. Instead, they plan to close it out tonight, at home, where the Flyers now also plan to close it out. Philadelphia forced a seventh game with a 5-2 win, led by Wayne Simmonds’s hat trick. Either team could be dangerous in the next round. Or completely exhausted.
In NBA playoff results, Washington advanced to the second round with a 75-69 win over Chicago last night to win their series 4-1. Memphis went up 3-2 in its first-round series with Oklahoma City after a 100-99 victory. And in Los Angeles, the Clippers beat Golden State, which would have been an underdog last night even if they had carried the Ark of the Covenant onto the floor of the Staples Center, by a score of 113-103 to take a 3-2 lead in their first-round playoff.
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