Archive for July 2006

  • 25 Jul 2006 at 2:50 PM
  • Chris Cox

Hedge Fund Hearings: Better Than Judiciary Committee

We’re not sure exactly how he survived the boredom (we did with the help of Adderall), but Gary Weiss, author of Wall Street Versus America, also watched the banking committee hearings. He thinks these were less stupid than the judiciary committee hearings. And he too found it surprising that not one word was voiced about Gary Aguirre.

The elephant on the panel was the whistleblower Gary Aguirre, who was fired after trying to question Morgan Stanely’s John Mack in a trading probe. Unless I missed it, as I may have dozed during the fascinating repartee, not one question about Aguirre emanated from the lips of the senators.
It’s important, by the way, to distinguish between Aguirre’s allegations and the effort to suppress him. As veteran financial journalist Don Bauder noted in a good wrapup on the subject, Aguirre’s widely publicized allegations have been attacked as “flimsy.”
Whether Aguirre is credible or not, this whole Mack business is troubling and should be investigated — by actual investigators, not the U.S. Senate.

Elephant on the Panel

  • 25 Jul 2006 at 1:40 PM
  • Chris Cox

We Watch the Hedge Fund Hearing So You Don’t Have To

chriscox1.jpgThat was it? The Senate banking committee held its hearing on hedge funds today and the only impression we came away with was that the perennial faith of Senators and bureaucrats that they can pass laws and regulations to protect investors from fraud and loss is, like, stronger than ever. It was like stumbling across a group of druids in the woods practicing a long-dead religion.
Some highlights from our viewing of the webcast after the jump.

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Investment Bankers in Matching Shoes

There’s this act certain New York ladies have where they pretend to be as hard and as cruel as characters in their favorite television shows. At least the young men who encountered Cruella from the WhyHeDidnt blog on Friday night will have the satisfaction that she’ll probably grow old and live in a Chinatown walk-up alone, of course, except for all her cats and sickly plants.

Investment Bankers with Matching Shoes: Three of the four I-Bankers we met had matching brown shoes from Holt Renfrew (except that one of them admitted he got a copycat pair at Wal-Mart). The fourth was clearly not an I-Banker, as he was wearing ratty jeans and black running shoes. Unfortunately, he was originally the most attractive of the four, until we found out that he was mute (by choice). Overall, I love I-Bankers, but they’re only good for their wallets. When asked whether he loved his job, one said, “Hell no!” and claimed he didn’t even get to sleep, much less go out. Lesson: I-Bankers are perfect target markets for the Cruella “Date ‘n Ditch” strategy – they won’t even have TIME to take you out again, much less fall victim to Saran Wrap Syndrome.

A Potpourri of Men [WhyHeDidnt.Com]

The Rise of Private Equity

The Wall Street Journal today has a nice timeline of the rise of private equity. Definitely worth reading in this new (again) era of the mega-deal. Don’t miss the sidebar with the dates of formation of several key private equity players.

Key private equity firms and the dates they were formed.
1966 — Warburg Pincus
1974 — Thomas H. Lee Partners
1976 — Kohlberg, Kravis, Roberts & Co.
1976 — Tracinda Corp.
1984 — Bain Capital
1985 — Blackstone Group
1987 — Carlyle Group
1990 — Apollo Advisors
1993 — Texas Pacific Group; Madison Dearborn Partners
1999 — Silver Lake Partners

The Rise of Private Equity
[Wall Street Journal]

Dealbook, The Abridged Version (07.25.06)

Senate Banking Committee to hold hedge fund regulation hearings [legal]
European Union okays Alcatel-Lucent deal [legal]
US government cracks down on online gambling [legal]
SEC investigating trades before HCA deal [legal]
Are more backdating indictments on the way? legal
Langone vs. Spitzer [legal]
Adelphia and bondholders reach deal; emerging from bankruptcy in Q4 [legal]
E&Y guy appointed chief accountant of SEC [legal]
M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Stornoway Diamond + Ashton Mining + Contact Diamond: ?
Mama Group meets with Sanctuary Group: ?
Lots of M&A activity in Texas banks
Nacco Industries + Applica
Barrick Gold + NovaGold Resources: ?? (hostile)
For Sale:
Bank of America’s FIA Card Services division prices offering of $375 million LINK
WNS, Indian offshoring firm, going up on London Stock Exchange LINK
Heritage Underwriting raising 50 18 million in London’s Aim offering LINK
Money Raising:
Prestwick Pharmaceuticals gets $60mm $$
Zillow, online home value estimator, nabs $25mm $$
NextMedium pulls in $6mm from VC’s$
Goldman fund of hedge fund on the London Stock Exchange LINK
Bearish and bullish on giant LBOs: LINK
Merrill pushing ahead with more private equity deals: LINK
Wilbur Ross staying the course after Amvescap deal: LINK
Juicy details from the Univision auction: LINK
Citigroup still hurting in Europe from Dr. Evil trading scheme LINK
Motorola’s $1.2 billion share buy back LINK

Barron’s Strikes Back

Eric Savitz on Tech Trader Daily (one of our favorite things at Barron’s—and not just because it’s free!) strikes back against the Barron’s critic who we linked to yesterday.

What a load of bull. I have been hearing this kind of nonsense almost from the day I joined Barron’s 18 years ago. If we’re really doing something wrong – aside from periodically giving you bad stock picks – I’d like to hear it. Shameful, indeed, Roberto. Shameful, indeed.

And while you’re over there, read Eric’s old boss on why YouTube is not worth a billion bucks.

Did Barron’s Trigger Monday’s Rally? Or Are We “A Compromised Rag?”

  • 25 Jul 2006 at 9:03 AM
  • Pfizer

Fighting Terror With Egg Yolks

friedegg.jpgOur non-stop coverage of the cholesterol conspiracy continues. Today we bring you CPA Karen De Coster’s LewRockwell.Com article arguing that we should strike a blow against what she calls “the “cholesterol scare” by eating tasty things.

In the end, the cholesterol scare has become yet another health hoax foisted upon an unsuspecting public, courtesy of the heavy hands of government and its statist corporate devotees. And what makes it so appalling is that, via pharmaceutical lobbying efforts, the middleman that is used to peddle this rubbish, and the lies that go with it, is that one person whom most of us place very high on our “most trusted” list – the family doctor.
Would you like to help stamp out the establishment’s terror campaign on cholesterol? Next time you eat an egg, don’t throw the damn yolk out – eat it! Most likely, your only risk is being tagged as someone who “is not with them, and therefore against them,” consequently making you a part of the seditious, anti-cholesterol insurgency. Nothing wrong with that. In my mind, the real “war on terror” is the battle that needs to be waged against the State and its terror campaign on the people, which comes to us disguised as a pretty nursemaid.

Cholesterol, Lipitor, and Big Government: The Terror Campaign Against Us All

  • 25 Jul 2006 at 8:33 AM

Opening Bell: 7.25.06

rollingblackouts.jpg US heat stretches energy supplies (BBC)
As a heatwave engulfs the entire world, power is running low in the US. Of course parts of Queens remain without power, last we heard, while the state of California has declared a power emergency. It’s been urging consumers to reduce their use of air conditioning and other power-intensive devices. Even the local tech industry has been hit by a lack of power to computers. But if the lights go out, who are they going to blame this time? There’s no Enron to kick around. There’s no (aptly named, to use the cliche) Gray Davis either. Will Arnold take the fall? Seems hard to imagine. It’s always a tough spot for politicians when something bad happens and there’s no obvious criminal.
Betonsports Ousts Carruthers After His Arrest in U.S. (Bloomberg)
As if getting arrested weren’t bad enough, David Carruthers has been canned as the CEO of Betonsports. Of course, one can hardly blame the company as it hasn’t had contact with Carruthers since being taken in while changing planes on the way to Costa Rica. Still, it would seem only fair to allow him some honorary position, CEO emeritus perhaps. And it turns out there’s more to the arrest than just a desire to take shots at online gambling. Apparently, back in its pre-IPO days, the company held wild parties at its Costa Rica offices. We’re not sure what about these wild parties were illegal, though perhaps the logic is that only law-flouting companies have wild parties, so there must be a crime somewhere.
Trade Talks Fail Over an Impasse on Farm Tariffs (NYT)
Honestly, it wasn’t hard to see this one coming. Negotiations among six economic blocs primarily centered around agriculture subsidies were suspended, with WTO chief Pascal Lamy declaring little hope to resolve the impasse. Naturally, the powerful farm lobby opposed any deal that would have cut subsidies more than it opened new markets for export. While the Bush administration would like to spin this as a defeat, it’s probably relieved that it didn’t have to make any tough choices, or spend political capital lobbying congress to ratify a deal. If the administration wanted to, it doesn’t need a WTO agreement to push for agriculture subsidies. It could just attack, and attempt to repeal the farm bill. Don’t see hit happening.
Behind $21 Billion Buyout of HCA Lies a High-Stakes Bet on Growth
There are a some differences between HCA going private this time, and the last time it was taken private back in 1989. Back then, it was only worth $5 billion, so the company has grown a bit since then. And as Christine Hurt points out, we know longer call them leveraged buyouts. The leveraged is implied, and if you ever said the word leveraged at a cocktail party, or on CNBC, you’d be laughed at for being painfully quaint. And we don’t call the buyers ‘raiders’ anymore, perhaps for good reason. The acquirers of HCA claim they’re not looking to slash costs in a bid to juice cash flow. Instead they’re focused on HCA’s potential as a growth engine. Instead they hope to capitalize on the aging boomers, and their frequent trips to the hospitals. Of course, every healthcare company in the world has been banking on the aging boomers. Why do they think they’re so special that they can pull it off?

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