Filed under: American Express (AXP), Goldman Sachs Group (GS)

The New York Times reports that former hedge fund manager and CNBC commentator Seth Tobias left quite a lurid tale before he allegedly drowned in his Jupiter, FL., pool in September. Tobias' wife has been accused of murdering her husband, while his brothers are the beneficiaries of a disputed will.

Before getting into the details, this story has a distant connection to BloggingStocks. After all, blogger and Mad Money Host Jim Cramer was Seth Tobias' boss at Goldman Sachs (NYSE: GS). As Cramer said: "I don't understand why this hasn't ended up on CSI: Miami yet."

Here are the key details:

• Hedge fund and CNBC host. Tobias ran a $300 million hedge fund called Circle T out of offices near Palm Beach's Breaker's Hotel and was a commentator on CNBC's Kudlow & Company -- hosted by Larry Kudlow, a former cocaine addict and partner of Cramer's on CNBC who would be a good fit alongside Fox's Bill O'Reilly.
• Gay bar. Tobias was known to frequent a gay bar called Cupids in West Palm Beach where he met a go-go dancer named Tiger who "is blond and covered with tattoos that look like stripes."

• Big spender. Tobias made, and spent, millions of dollars a year. Outstanding expenses at the time of his death included $52,532 on his American Express (NYSE: AXP) Centurion Black Card, and his mortgage payment for one of his homes was $35,000 a month.
• War over will. Tobias' brothers are the beneficiaries of his will and have accused Tobias' wife of one year -- Filomena Tobias, who was seeking a divorce alleging Tobias had "an adulterous affair" and that he "gambled away tens of thousands of dollars and used other funds on illicit habits" -- of luring Tobias to take cocaine, and then dive into the family swimming pool. At the pool police found a Ziploc bag with a white powdery substance and a small baggie and a straw, as well as two empty plastic prescription bottles.
• Wife's confession? Tobias' wife reportedly confessed to murdering her husband, according to a tape from Bill Ash, a former Tobias assistant, who has been arrested at least 11 times on charges ranging from larceny to prostitution.

There may be a writer's strike on, but it looks to me like this story could write itself into a great movie.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in American Express and Goldman Sachs securities.

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Filed under: Goldman Sachs Group (GS), Morgan Stanley (MS), Economic data, Bear Stearns Cos (BSC), Housing

Last week, Citadel Investment Group, a Chicago hedge fund, bought E*Trade Financial (NASDAQ: ETFC)'s collateralized debt obligation (CDO) portfolio for 27 cents on the dollar according to The Wall Street Journal [subscription required]. If this price was applied to the Level 3 assets of nine of the largest banks, it would wipe out the capital of three of them.

It's important to point out, before presenting this analysis, that the 27 cents on the dollar price that Citadel paid applied only to E-Trade's CDOs. It may represent a worst case scenario price for these banks. Furthermore, the Level 3 assets of these nine banks include other illiquid securities besides their CDOs. Finally, the calculations I'll show are based on the most recent Level 3 assets and equity of these banks as of last month.

Having said that, here are the three banks whose capital would be wiped out if that 27 cents on the dollar valuation was applied to their Level 3 assets and written off from their mo