Clare Baldwin and her colleagues had a big scoop this weekend: An exclusive interview with former Lehman CEO Richard Fuld. Clare flew out to Ketchum, Idaho to interview the man nicknamed “The Gorilla,” where she got some unguarded comments about the Lehman anniversary, not to mention a hug.

It was the hug that caught the attention of New York Magazine’s Intelligencer blog. Their interview with Clare is excerpted below:

Okay, re-create the hugs for me. I want to feel like I am there.
There were two of them. The first one happened on Friday afternoon. We had been talking for about ten minutes. He had been kind of leaning against my car. He reached out to shake my hand, then he just kind of leaned in and gave me a hug.

Like was it a one-armed deal, or a full embrace?
Both arms. It was like a hug.

Was it a pervy hug? Did he press up against you in a gross way at all?
No, no. Not at all. There was no weird dynamic to it at all. I’d been asking him stuff that was personal. It felt natural, though I wasn’t expecting it, certainly.

Did he feel soft, or was he more wiry and muscular?
He’s very fit, and he has a very angular face, you know. But he was wearing soft clothes. A black fleece vest over a long-sleeved underwear top, shorts, and sandals.

Was he wearing socks with the sandals?
No, but he had a sock tan.

Was he scratchy or hairy-feeling at all?
He had a really short haircut, but he wasn’t hairy.

Did he have a scent at all?
Not that I can recall.

Really? Nothing? I suppose you were so shocked you forgot to bury your face in his collarbone and inhale deeply.
Sorry.

Read the rest of the interview here.

Witness: On Dick Fuld’s trail, no dinner but I got hugged

Exclusive: Fuld says being “dumped on” for Lehman failure

The Year Since Lehman: Times of Crisis

“Dear Timmy, we are happy to be able to pay back the $25 billion you lent us. We hope you enjoyed the experience as much as we did.”

That’s JPMorgan Chase CEO Jamie Dimon’s biting sense of humor on display yesterday as he read a  mock letter to U.S. Treasury Secretary Timothy Geithner before the Annual NYU International Hospitality Industry Investment Conference in New York. Dimon’s sarcastic tone shocked some participants and cheered others, according to sources who attended the meeting.

“I congratulate him not only for his candor but for his wit,” said Mark Grant, managing director of structured finance at Southwest Securities in Dallas. “The fact that Jamie Dimon had the self composure, the sense of humor and the fortitude to make such a statement in public not only made me smile but it reminded me of days seemingly long past when men stood up on their own two feet and played the Great Game with style.”

The Wall Street Examiner, a blog of financial analysis and commentary, characterized Dimon’s remarks in a different light, calling it “the new and taunting face of state capitalism in America. ”

Dimon, a combative executive who took up boxing lessons before he joined JPMorgan, has in the past referred to TARP funds as a  “scarlet letter” and also called the $25 billion that the Treasury forced JPMorgan to take as a “TARP baby.”

Dimon repeatedly has said the bank did not want to take the money. However, Wall Street banks including JPMorgan accepted the federal funds last year after the collapse of Lehman Brothers to help alleviate concerns about the health of bank balance sheets.

(Picture of Dimon at Business Council in Dallas by Reuters photographer Jessica Rinaldi; Geithner in China shown in pool photo)

Merrill Lynch’s losses shocked even Christopher Flowers, the private equity guru who advised Bank of America on its purchase of the Wall Street firm last fall.

“Yes, I was appalled. Yes, I was shocked,” Flowers said during a panel discussion in New York when asked about what he thought of Merrill’s losses. Merrill lost a record $15.31 billion in the fourth quarter.

Merrill agreed to be bought by BofA in a weekend deal in mid-September as the financial crisis peaked. Lehman Brothers went bankrupt the same weekend, and the U.S. government had subsequently to rescue AIG.

Flowers he got involved in the events beginning Thursday, Sept. 11 when Bank of America was looking at buying Lehman. By Friday he was looking into ways to save AIG, and then helping Bank of America buy Merrill.

“It certainly was an unusual weekend for me,” Flowers said at panel, which also had former AIG CEO Hank Greenberg and Blackstone’s Peter Peterson. “It was a busy weekend.”

The panel, “The Big Fix: Charting a New course for Wall Street,” was moderated by Vanity Fair columnist Michael Wolff.

(Photo: REUTERS/Toby Melville)

Yet another case of insider trading in the M&A space.

A Blackstone investment banker is alleged to have shared information on the buyout of grocery chain Albertsons with a friend, who went on to make $3.6 million from the friendly chats. (The lawsuit says the banker passed on the tips in at least 20 telephone calls and at least 18 text messages)

33-year-old Ramesh Chakrapani was a vice president working on the deal, advising Albertsons as part of a Blackstone team. Wall Street firms are teeming with vice presidents — relatively junior bankers who work their way up to the first coveted title of managing director. Chakrapani himself was subsequently promoted to managing director and sent to the firm’s London offices.

Media reports have cited senior bankers from the Albertson deal as barely remembering Chakrapani. Some told the Wall Street Journal Chakrapani played a junior role and did not have much involvement with the negotiations.

Insider trading, historically associated with traders, now seems to be spreading to M&A professionals.

In 2007, a Credit Suisse banker was convicted for leaking confidential information on several deals, including the $32 billion buyout of power giant TXU. The banker was charged with one count of conspiracy and 28 counts of insider trading for relaying information to a former boss. Authorities tagged the profits at nearly $7.5 million.

Last month, U.S. authorities said a former Lehman Brothers salesman was charged with sharing information about 13 impending mergers gleaned from his wife, a partner at public relations firm Brunswick Group. Two day traders, a lawyer and a brokerage salesman were also charged with illegal trades that the U.S. Securities and Exchange Commission said netted $4.8 million in illegal profits. 

It’s very unlikely insider trading will become a common phenomenon in the dealmaking space. Aside from the basic ethics involved,  bankers are usually keen on keeping the information confidential for fear of jeopardizing the deal. But it is certainly becoming more visible.

(Photo:  REUTERS/Romeo Ranoco)

Some in the financial industry apparently smell opportunity in the latest round of mergers and blood-letting among top banks.

Referring to the Wells Fargo takeover of Wachovia as the WWF and placing Bank of America CEO Ken Lewis atop a bucking Merrill Lynch bull are just a couple of the attention-getting devices financial sector recruiting firm RJ & Makay uses in its latest promotional You Tube video.

Branching out from a previous video aimed at Merrill Lynch brokers, the new “Billion Dollar Video” (the company claims assets from advisers brought to them via these viral recruiting tools represent billions of dollars) targets all financial advisers but specifically appeals to those currently at Merrill Lynch and Wachovia.

Those brokers are grappling with with the question of whether to accept a retention/transition package, move to another firm or go independent. RJ & Mackay is clearly hoping they’ll opt to walk and chose the firm to advise them on where to go next.

The just over four-minute short could help at least get their attention. It’s an equal opportunity stick poker, targeting all the big hits of this financial season. JP Morgan Chase, Bear Stearns, Fannie and Freddie are all in there along with Lehman, Buffett, Goldman, AIG, Morgan Stanley, Bernanke, Paulson, the government bailout, executive greed, executive kool-aide dispensers and dealing with those pesky gnats, known as recruiters.

Watch here:

After a couple weeks of just trying to keep up with developments in the financial crisis, reporters and bloggers are taking halting steps toward describing the mythos of the investment banker.

It’s been a while since Tom Wolfe and Bret Easton Ellis popularized the bespoke-suited arrogance commonly associated with the financial world’s anointed — the easy millions, the casual disdain for the rubes and the marks in the lower classes and the single-minded pursuit of money. Depicting the carnivore in his or her habitat is beginning to come back into vogue as taxpayers who may soon be on the hook to bail out their social betters in the investment banking world wonder why they’re getting stuck with a bill they didn’t incur.

New York magazine ran a story called, “The Rage of the Previously Rich: A Lehman trader copes with the sudden onset of income shrinkage,” featuring this choice nugget:

The collapse of the world’s most powerful wealth-creating engine required everyone to take stock of their financials. One Lehman executive in Rye Brook, fretting about paying off a Hamptons summer house and a ski chalet in Vermont, panicked on Monday morning and laid off her nanny, who had been with the Westchester family for nine years. “The nanny called me crying,” says Marla Sanders, who runs Advance Nannies and staffs Lehman homes. “One of the children she had brought home from the hospital.” Sanders knows more cuts for her clients are on the way. “They’re going to have to sell homes. The question is, will the homes sell? They’re cutting some of the children’s activities out, dance class, acting class. Are they going to have flowers delivered every day to their homes? I don’t think so!”

On Wednesday, ivygateblog featured comments from the pseudonymous “George”:

One of my friends at Bank of America texted me, ‘Hey, we might be buying you guys.’

I was in denial. You see, Merrill has a much better repuation than a commercial bank like Bank of America. I was shocked I would be joining a lower-tier commercial bank. There’s a feeling, ‘I didn’t go through this whole interview process to work at a commercial bank.’

More from George:

Changing compensation will obviously change the attitude of students toward the industry. They might go to med school or law school instead. … This is a sad week. … We may be losing the competitive advantage for getting the best talent.

And finally, regarding the proposed $700 billion bailout plan, courtesy of the United States’s 300 million would-be shareholders of bad debt:

It’s a good step toward stabilizing the turmoil. If the government can take the balance sheet pressure off the companies then the companies will look better going forward.

After all, that’s the only thing that counts in this whole story.

(Photo: Workers leaving Lehman Brothers office in London. Reuters)

From the Iranian coffee cart guy to the Italian graduate student, almost everyone who walked past Lehman Brothers’ headquarters on a  windy Wednesday morning in New York seemed to stop and mull its future.

Philipp Steiner, a graduate student in entrepreneurship from Italy, walked up to Lehman’s offices at 50th St. and 7th Ave after reading news about the investment bank’s $3.93 billion quarterly loss on the famous news ticker a few blocks south in Times Square. There’s never such big news in Italy, he said. Still, he didn’t think Lehman bankers had too much to worry about, despite its troubles.

“I would see that as a good experience, and then move on to another job,” Steiner said.

Moving on seemed a serious option to the Iranian coffee cart guy as well, who mulled Tuesday’s 45 percent plunge in Lehman’s stock price in an exchange with one of the firm’s employees.

“Can you believe the shares are now around $7?” he asked, as he handed the Lehman employee his coffee.  Seven cups would buy roughly one share of stock; last November, it would have taken 68 cups.

“It sucks,” the employee shot back, shaking his head as he retreated into the building.

Lehman reported its record loss on Wednesday, but sought to quell investors’ worries with plans to sell a majority stake in its asset management unit and spin off commercial real estate holdings.

But within the bank’s working ranks, its troubles have rocked the faith of more than just its old timers. 

“This is my first day at Lehman, I literally just signed my papers,” said one worried-looking man, as he smoked a cigarette.

And for a trader who’d joined Lehman from Bear Stearns just three months ago, it could not have been worse timing.

“Who would have known everything would collapse?” he said.

Some employees were steeling themselves for even worse news to come.  Some were preparing to move on to new employers.

“It is sad for anybody,” the coffee vendor said. “They just bought houses for a couple million dollars and now they are going to lose their jobs. How are they going to manage?”

“Things are pretty bad … there’s not much left to say,” said a Lehman employee who works for its capital markets unit. He said that between his anxious family and Lehman’s battered stock, he planned to decide this week whether to keep working for the 158-year-old company.

Hany Besha, who has run another coffee cart on the block for nearly 10 years, is already getting hit by Lehman’s troubles. Business is down 50 percent, he said.

“They are here today and gone tomorrow,” he said. “One of my customers told me, ‘I don’t know if I will see you tomorrow or not. If I don’t, have a good life.’”

(Photos: Reuters)

A day after Fox-Pitt Kelton analyst David Trone suggested Lehman Brothers Holdings Inc may be better off going private, the investment bank may be ready to do just that. Lehman Chief Executive Richard Fuld is considering ways to take the Wall Street bank private, but it’s not quite clear how such a move might work, the New York Post reported, citing sources. Lehman’s shares have plunged this year on the back of rumors and questions about its solvency. Talks of privatizing Lehman have got serious as a result, the papers said. The company’s shares closed down more than 14 percent on Monday, reaching their lowest level since August 1999. Lehman’s shares have fallen about 81 percent so far this year. Trone said on Monday Lehman may be better off going private to shake off short sellers that are spreading bogus rumors about the bank.

Those nasty rumors, if that’s what they are, may come back to bite some folks on the hindquarters. The Securities and Exchange Commission has sent subpoenas to more than 50 hedge-fund advisers as it investigates whether individuals spread false rumors to manipulate shares in Lehman and Bear Stearns Cos, The Wall Street Journal said, citing a person familiar with the matter. You remember Bear Stearns, right? You know, the one that initially sold for about $2 a share? No wonder Lehman may be thinking about getting out of the stock market limelight.

And now for something completely different (different from Lehman, anyway). Hong Kong phone company PCCW Ltd says it expects to shortlist bidders for its media and telecoms unit within a month. The deal could fetch more than $2.5 billion. Private equity firms are among those bidding for the newly formed unit, known as HKT Group Holdings, group managing director Alex Arena told reporters on Tuesday. Reuters reported on Friday that the Blackstone Group and Providence Equity Partners were among those pursuing a bid for HKT.

More deals of the day:

** Private equity firm Oak Hill Capital Partners purchased eight News Corp television stations for about $1.1 billion.

** Bank of Nova Scotia will expand its wealth-management business by buying the Canadian operations of U.S. online brokerage E*Trade Financial Group Inc for $442 million cash, the companies said.

** Barrick Gold Corp is launching a C$354 million ($350 million) hostile bid for Cadence Energy Inc as a hedge against oil prices to get control of soaring production costs, the world’s top gold miner said.

** Lawson Inc, Japan’s second-largest convenience store, will spend at least 3.98 billion yen ($38 million) to take control of discount grocery chain Ninety-nine Plus Inc, aiming to use acquisitions to grow in a mature market.

** China’s CITIC Resources Holdings has raised its stake in Australian miner Macarthur Coal Ltd to 20.39 percent, overtaking global steelmaker ArcelorMittal as the top shareholder.

** Hungarian drug maker Richter Gedeon said its takeover of Poland’s Polpharma was not completed as scheduled on Monday because Polpharma owner Genefar did not agree to the terms of the closure of the deal.

** French seeds company Vilmorin said it was taking a 25 percent stake in Australian Grain Technologies (AGT) for an undisclosed amount.

** Banca Popolare dell’Emilia Romagna has suspended plans to buy Banca delle Marche, it said in a statement.

** Irish billionaire investors the Quinn family said they would buy a 15 percent stake in Anglo Irish Bank which they saw as a long-term investment despite difficulties facing international banking.

As if having the U.S. Justice Department on your back because your bankers may have been helping wealthy Americans avoid tax wasn’t enough, Swiss banking giant UBS also has to deal with grumpy regulators at home. The head of the Swiss Federal Banking Commission, Daniel Zuberbuehler (pictured), tells us that singling out UBS and Credit Suisse for tough treatment is justifiable and has laid down a tight timetable for new rules to restrain the two. The banks will be required to hoard considerably more capital, which will surely slow them down on Wall St. On Monday, the DOJ said it had asked a federal court in Miami to authorize the Internal Revenue Service to request information from UBS about U.S. taxpayers who may be using Swiss bank accounts to evade federal income taxes. Coughing up tax fraudsters to the IRS could make the sell-off of UBS’s U.S. wealth management backbone - once known as Paine Webber - a tad trickier, but perhaps no less necessary.

A detailed blow-by-blow of the death of Bear Stearns by Vanity Fair’s Bryan Burrough casts current market rumors rumbling about the health of Lehman Brothers in an eerie light. The author, who DealBook notes co-wrote “Barbarians at the Gate,” takes aim at CNBC and hedge funds as it works to uncover what it posits could be the “murder” of the country’s fifth-biggest investment bank. This morning, CNBC’s Charlie Gasparino and DealBook editor Andrew Ross Sorkin are talking about the prospects for Lehman being “taken out”.

High in the “priced to move” column, commercial lender CIT Group agreed to sell its home lending business to private equity firm Lone Star Funds for $1.5 billion in cash to increase liquidity, and said it would take a related second-quarter charge of $2 billion. CIT also agreed to sell its $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance for about $300 million. “These sales complete our exit from all home lending businesses, removing the uncertainty surrounding this asset class,” Chief Executive Jeffrey Peek said. Lone Star will also be taking on $4.4 billion of outstanding debt and other related liabilities. Home lending may not be that far off the path for CIT, but getting out of the business certainly helped tax preparer H&R Block, which announced strong results and a better outlook yesterday, so any price is clearly worth it - CIT’s stock was up over 11 percent in premarket trade.

Manitowoc said it had beaten out Illinois Tool Works in the official auction for British kitchen equipment maker Enodis. Manitowoc said it will pay 328 pence for each Enodis share, or about $2.45 billion, not including the assumption of about $249 million of the U.K. company’s debt. Enodis, which makes fast-food fryers, became the center of a takeover tussle between the two U.S. diversified manufacturers this spring. The two bidders saw Enodis, which counts Burger King and McDonald’s among its customers, as a way to play on rising demand for fast food in markets such as Asia.

Other deals of the day:

* Italy’s third-biggest refiner, Saras, said it has bought a 30 percent stake in an Italian wind power company from Australian investment firm Babcock & Brown.

* InBev stuck to its proposal to take over reluctant bid target Anheuser-Busch and said it would seek to give the latter’s shareholders a direct voice if the U.S. brewer still refused to talk.

* Norwegian recycling equipment maker Tomra said it bought Australian peer Ultrasort for 160 million Norwegian crowns ($31.48 million) in enterprise value.

* State-owned National Bank of Egypt has sold its holdings in six companies for a combined total of 5.29 billion Egyptian pounds ($993 million), the financial daily Al Mal said on Tuesday.

* Indonesia’s largest lender, PT Bank Mandiri, said it had acquired a 51 percent stake in automotive financing firm PT Tunas Financindo Sarana (Tunas Finance), for an undisclosed amount.

* U.S. pork producer Smithfield Foods Inc said that COFCO Limited, China’s largest agricultural trading and processing company, will buy a near-5-percent stake in the company.

* Israeli holding company Koor Industries said it has accumulated 100 million Swiss francs ($98.23 million) worth of shares in Credit Suisse Group.

* Major Chinese engine maker Weichai Power said it has agreed to take a stake in Beiqi Foton Motor under a deal to expand its business ties with the truck maker.

* British telecoms company Cable & Wireless said it was in talks with rival Thus Group about a potential 180 pence-per-share offer for the company.

* Malaysia’s TM International and Indian mobile operator Idea Cellular will launch an open offer on Aug. 22 to buy up to 20 percent of Spice Communications, their investment banker said.

* New Zealand rural services firm PGG Wrightson said it would pay NZ$220 million ($167 million) for a 50 percent stake in meat producer Silver Fern Farms (SFF), sending its shares lower.

* South Korea’s POSCO said it had agreed to buy a 10 percent stake in coal mining firm Macarthur from the Australian group’s shareholder Ken Talbot at A$20 a share.

(Picture: Director of the Swiss Federal Banking Commission, Daniel Zuberbuehler, at a news conference in Bern. 27/03/2007 - Reuters)

Once upon a time, bank analysts were uniformly upbeat on investment banks. “Sell” ratings were nearly unheard of, and potholes in balance sheets were never as big as the huge, routine earnings beats. Now, with Goldman Sachs’s sector u-turn perhaps at the apex, there is plenty of mud to go around. Today’s hit list includes Barclays, the recipient of 4.5 billion pounds in balance-sheet aid this week. Citigroup says Britain’s third-biggest bank may need to raise a further 9 billion pounds and could take more significant write-downs. Lehman Brothers analyst Roger Freeman took aim at Merrill Lynch, saying the big broker will probably see $5.4 billion of write-downs in the second quarter, mainly from its exposure to monolines. Freeman raised his write-down view by $3 billion for Merrill, making his estimate the highest among Wall Street analysts.

Merger activity in the United States dropped 29 percent in the second quarter, faring better than the 40 percent global slump, as corporations filled the void left by buyout firms and targeted big consumer brands such as Anheuser-Busch and Wrigley. “Strategic buyers see an opportunity here due to the absence of the financial buyers. For the last 24 months, prior to the downturn, strategic buyers were getting outbid by financial buyers. That’s not happening now,” said Bob Filek, a partner with PricewaterhouseCoopers’ transaction services. During the first half of the year, private equity deal volume dropped 85 percent in the U.S. and 76 percent globally, according to Thomson Reuters data.

A couple more European banks have increased their China exposure. Deutsche Bank signed a deal with Shanxi Securities to set up an investment banking venture, a source with knowledge of the deal said on Friday. Deutsche planned to take 33 percent of the envisioned Beijing venture, the most allowed. Beijing this year re-opened its coveted but shuttered securities industry to foreign firms after a hiatus of more than a year to let local players merge and strengthen. Several banks, including BNP Paribas, have since expressed an interest in setting up local ventures. Chinese stock markets have shed nearly half their value this year, but foreign banks remain keen on securing a foothold there with an eye on the longer term. Royal Bank of Scotland has won approval from Chinese regulators to buy a nearly 20 percent stake in Suzhou Trust as it expands in corporate banking and wealth management services in China, sources with direct knowledge of the situation said. Suzhou Trust is a mid-sized trust and investment firm.

Other deals of the day:

* French insurer Groupama said it had bought Turkish insurers Guven Sigorta and Guven Hayat for 350 million lira ($287 million) from the TTKMB association of agricultural credit cooperatives.

* Telstra, Australia’s largest telephone firm, expects strong revenue and profit growth at its newly acquired Chinese online advertising websites.

* Mexico’s KOF, the world’s second-largest bottler of Coca-Cola drinks, said it acquired Brazilian soda maker and brewer Refrigerantes Minas Gerais Ltda for $364.1 million.

* New Zealand dairy cooperative Fonterra and National Foods have had talks about a possible joint bid for Australia’s Dairy Farmers, which is valued at up to A$1 billion ($961.5 million), a source familiar with the situation said.

* Russian mid-sized bank InvestTorgBank said its Russian owners had sold just under 40 percent of the bank in two stakes for a total of 5 billion roubles ($213 million).

* Australian-listed miner Herald Resources advised its shareholders to decide themselves on which of two rival takeover bids to accept.