Levine on Wall Street: Talk Your Book, but Only When You Want To

Warren Buffett said some quotable things. And so did Dennis Kozlowski, which is way weirder.

Prominent financial company holds shareholder meeting in out-of-the-way place.

No, not Citi. I'm sure the Berkshire meeting was fun if you're into that sort of thing, and gosh darn it a lot of people seem to be.

David Einhorn talks when he wants.

David Einhorn, who has been known to ask the Securities and Exchange Commission for permission to delay disclosing his stakes in companies, asked for a seven-day delay last November before disclosing a 4.5 percent stake in Micron Technology. His stated reason was that "Mirror trading by 'copycats' could lead to unwarranted volatility and inflated prices in the security," but DealBook has a plausible alternative explanation:

The redacted letter does not mention that the seven-day window of secrecy was set to expire on the same day that Mr. Einhorn planned to appear at a charitable event in New York City where he was supposed to unveil his "best" investing idea. It was at that Nov. 21 investors conference, sponsored by the nonprofit Robin Hood Foundation, where Mr. Einhorn first disclosed that his fund had taken a big equity stake in Micron.

The stock was up 6 percent after Einhorn's presentation. I don't know, I mostly think that investors should have some leeway to build concentrated positions without letting everyone else copycat them, but this is a 13F, where the deadline is once a quarter (and 45 days after quarter-end), so it's not really that onerous. I guess if you're mad at the Ackman/Allergan thing you should be even more mad at this, though at least here there's no merger in the offing.

Credit Suisse is too big to be too small to be too big to jail .

I gather that U.S. prosecutors intend to test the proposition that an indictment won't destroy a large global bank by trying it out on a small unimportant bank like Credit Suisse or BNP Paribas. But Credit Suisse and BNP Paribas are huge important banks! They're just not American banks. Understandably, Swiss (and, one assumes, French) authorities are not happy, and the Swiss finance minister met with Eric Holder last week to make sure that "Swiss banks aren't treated worse than other banks." Which it kind of sounds like they are being? (I mean, treated worse than U.S. banks, not necessarily than French ones.) One could imagine some retaliation if the U.S. went around indicting foreign banks because, hey, their failure isn't our problem.

Companies don't like paying taxes.

So they move to Ireland or Switzerland. On the one hand, the head of "a Washington-based advocacy group that says corporations don't pay enough" says that this is "a lot of blarney," and I see what he did there. On the other hand, another guy says that it's the fault of the U.S. tax system, and that "The entire tax code needs to be looked at to keep the U.S. competitive." This argument is somewhat undercut by the fact that the guy making it is Dennis Kozlowski, though I would guess that there are people without financial fraud convictions who think along similar lines.

If you can't own it, finance it.

Banks are increasingly willing to provide leverage to hedge funds buying collateralized loan obligations. Why might that be?

Banks' increased willingness to lend follows new rules weighing on the $300 billion U.S. CLO market. Many banks own CLOs themselves, holding about $130 billion on their books. New regulations may mean some banks will be forced to sell some CLOs in the next few years. Finding new buyers would help them offload the debt, while keeping prices relatively high.

This is plausibly an intended result of the Volcker Rule interpretation that sort-of-bans banks from owning CLOs, in that providing 50 percent leverage on a given CLO tranche is safer than owning the tranche outright. Still what happens if the CLO market tanks and the banks need to foreclose? They're not allowed to own the assets, right? Meanwhile, U.S. banks have also cut back on exposure to Russia, for fairly obvious reasons.

Not everyone in L.A. understands the concept of interest-rate swaps .

This is a garden-variety story of a municipality that entered into interest-rate swaps on its floating-rate debt to reduce the risk of interest rates going up, and then got sad when interest rates went down. (To be fair, it's one city councilman, not the whole city.) We talked Friday about a ridiculous Portuguese swap that was basically this to the millionth degree. One of the defenses that the swap customer there raised was that unexpected changes in circumstances -- the fact that the European Central Bank had cut rates so much -- meant that the swap was no longer valid. This sounded like a very silly defense: The whole point of floating-rate contracts is that they, you know, float with the interest rate. That's pretty much this case too though -- "we shouldn't have to pay out on our bet because the thing we bet against happened" -- except that these swaps don't seem to be ridiculous. They just seem to be regular swaps, and they moved against Los Angeles.

Things happen .

The story of A123 Systems. Custody fights. Steve Wynn in billionaire hotel battle; also this article contains the phrase "Coachella of Capitalism." The right number of claims is three. The Norwegian Breakway did.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

    To contact the author on this story:
    Matthew S Levine at mlevine51@bloomberg.net

    To contact the editor on this story:
    Toby Harshaw at tharshaw@bloomberg.net

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