The chief executive of reinsurer Renaissance Re Holdings Ltd. said Friday that growing demand for its products and services and a need for efficiency prompted the acquisition of the firm managing its syndicate in the Lloyd’s market.

 

Bermuda-based RenaissanceRe (NYSE:RNR) said it has entered into an agreement to buy Spectrum Partners Ltd, the parent company of Spectrum Syndicate Management Ltd., a Lloyd’s managing agent for its RenaissanceRe Syndicate 1458.

Shares of RenaissanceRe rose 0.67 pct in early trading to $47.99 on the New York Stock Exchange.

 

Spectrum’s chief executive and its management team will remain in place but must be approved by Lloyd’s and the U.K.’s Financial Services Authority.

 

"We believe a combination would enable us to operate effectively and efficiently in London and to meet the growing demand for our products and services," said Neill Currie, President and CEO in a released statement.

 

RenaissanceRe’s businesses includes catastrophe reinsurance, specialty reinsurance and joint ventures managed by a subsidiary. The firm also provides primary insurance and quota share reinsurance.

Sheila Bair on Cramer today. Instead of pandering her flawed policies in front of a small (if any) cable audience, with such pearls as "insured depositors have nothing to worry about", maybe Ms. Bair can finally get back to Zero Hedge in its FOIA request attempting to obtain some/any information on just what is thecompensation/fee structure for FDIC's advisor, and the real man behind the curtain, Perella Weinberg. How is this private investment bank/hedge fund, whose succumbing to Ratner's bullying attempts recently was the main reason for the non-Tarp lenders to abandon their fight to block the Chrysler 363 asset sale, incentivized to advise Sheila and her henchmen when it comes to deciding which bank(s) to close. And not just that, but one would be interested in finding out just what role did Perella Weinberg play in the negotiations between Carlyle, Blackstone and Ross when they acquired BankUntied, and, more relevantly,what fee did P-W get out of that deal.
Please Ms. Bair - at least a flat out refusal to our FOIA request would be sufficient. In the meantime, if readers would like to join this effort, the FDIC's FOIA submission page is here. Listen to the interview below and focus on the language about economists and examiners (~2 minutes into the interview): these are the people on whom the fate of the financial system lies.

A man looks at a new exhibit tracking the financial crisis at the Museum of American Finance in New York March 25, 2009. (Reuters)

The Museum of American Finance opened an exhibit on the global economic crisis history on Wednesday.

"Tracking the Credit Crisis" looks at the events that led into and happened during the crisis as well as providing attendees with definitions of all those economic terms such as "securitization," liquidity," "credit default swap," and "derivative" for the average person.

"We are now entering what may well be the most challenging man-made calamity in modern experience, a global financial crisis of unprecedented size, speed, interconnectedness and complexity," said Lee Kjelleren, the chief executive of the museum.

The last date on the timeline is March 2, 2009, when American International Group Inc announced loss of $60 billion in the fourth quarter of 2008.

AIG Tower in Hong Kong (Bobby Yip/Reuters photo)

Jake DeSantis, an executive vice president at American International Group Inc has issued his resignation letter, published on the New York Times web site on Wednesday.

DeSantis feels let down by the company and its chief executive for not supporting employees who agreed to receive bonuses, in the form of retention pay, for staying on with the company in unstable times.

 

In the letter DeSantis says he was not involved with the part of AIG’s Financial Products unit that resulted in heavy losses for the company.

 

He worked in the commodity and equity division, not in the credit default swap section, which lost so much money that the government had to help with tens of billions of dollars.

 

“After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials,” he writes.

 

He said he would donate his $742,006.40 retention payment, after taxes, to groups aiding victims of the economic downturn.

 

 

The hedge fund industry still generated big profits in 2008 for top earners despite a 48 percent dropoff, according to a new survey by Alpha Magazine.

 

The top 25 hedge fund managers saw their average take home pay drop 48 percent to $464 million last year. The average in 2007 was $892 million.

 

James Simons of Renaissance Technologies Corp was the top earner, followed by John Paulson of Paulson & Co with $2 billion, John Arnold of Centaurus Energy with $1.5 billion and George Soros of Soros Fund Management with $1.1 billion.

 

The top 25 earners made a combined $11.6 billion.

Timothy Coleman of Blackstone

Leveraged deals will be back, although, not at the same levels as before, a senior executive at Blackstone said on Tuesday.

"The idea that it’s over and we’ll never see another levered deal is not good thinking. I don’t know when, but it will be back," Timothy Coleman, the co-head of Blackstone’s Restructuring and Reorganization Advisory unit told Reuters in an afternoon report.

He cited erroneous predictions after the last buyout boom of the late 1980s and early 1990s.

"The predictions -- that (it) was over for good -- were bigger than today," he said. "We know that didn't turn out to be true."

Federal Reserve Chairman Ben Bernanke will tell lawmakers today that providing billions of dollars in emergency loans to insurer AIG was a “difficult but necessary” step to support the U.S. economy and stabilize the financial system.

 

“We were very concerned about a number of other major firms that were intense stress,” Bernanke stated in prepared remarks for a hearing in Washington today.

 

The initial AIG loan for $85 billion was made on September 16, 2008, an “extraordinary time” when mortgage finance companies Fannie Mae and Freddie Mac had been taken over and Lehman Brothers had just filed for Bankruptcy, he said.

 

The firm faced severe liquidity pressures that threatened to force it imminently in to bankruptcy, Bernanke said. The company’s failure “would have posed unacceptable risks” for the global financial system and the economy he said.

 

“The banks’ combined exposures exceeded $50 billion. Money market mutual funds and others that held AIG’s roughly $20 billion of commercial paper would also have taken losses,” he said.

 

Direct damage to AIG’s counterparties was just part of the problem, he said. Like Lehman, AIG’s failure would have caused further problems in the money market mutual funds, raised uncertainties about insurance products and could have led to a run on the broader insurance industry, he writes.’

 

“Conceivably, its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income, and jobs,” he said.

Goldman Sachs is planning, "ideally within the next month," to give back a loan from the government's bailout fund which it accepted last year, people involved in the process tell Andrew Sorkin of the New York Time's Dealbook blog.

Some banks, namely Citibank and Bank of America, have already said they are making an operating profit for the first two months of the year.

"To some, these pronouncements can make banks look like an overzealous kid on a bike, claiming he really doesn’t need his training wheels, as he strains to keep from wobbling," Sorkin writes.

He believes other firms may want to give back their funds to avoid looking weak, when in fact they may still need the capital.

Goldman executives have held meetings about the issue, and have also privately held talks with Congressman Barney Frank, who heads the House Financial Services committee, Sorkin reports citing the same people.

Nine of the top 10 AIG bonus recipients have agreed to return the payments in full, New York’s top legal officer said on Monday.

 

Attorney General Andrew Cuomo, in a conference call with reporters, said that $30 million of $165 million in bonuses paid on March 15 has been returned, according to reports.

 

Out the top 20 recipients, 15 have returned the bonuses, he said.

 

He eventually hopes to receive $80 million in bonus payments, he said.

 

He said he would not be releasing the names of the bonus recipients.

 

Last week, AIG handed over the names of all 400 bonus recipients. At the time, Cuomo said he would be sensitive to safety concerns about releasing the names.

As the Federal Reserve and Treasury work closely to restore stability to the financial system in the midst of a prolonged recession, the pair of institutions issued a joint declaration of broad points that they agree on.

The statement comes as both agencies work together to help mitigate the effects of the current economic recession which officially began in December of 2007.

The following is a summary of their four joint points

1. The Fed will use “all its tools” and work closely with Treasury and other agencies to improve the functioning of credit markets, prevent failure of institutions which leads to systemic damage, and foster stabilization and repair of the financial system.

2. The Fed will aim to improve financial or credit conditions broadly, not allocate credit to narrowly-defined sectors or classes of borrowers. Fiscal authorities will make decisions about allocation of credit.

3. Fed loans or securities purchases must not constrain the Fed’s exercise of monetary policy as needed to foster maximum sustainable employment and price stability. The Treasury and Fed stated they are seeking laws which would give the Fed additional tools to “sterilize” its supply of bank reserves from the effects of its lending or securities purchases.

4. The Treasury and Fed seek a framework to allow the government to deal at an early stage with the potential failure of any systemically critical financial institution. This framework should detail the expected role of the Federal Reserve.