With regard to a House bill that would swap the much-loved 15% tax rate loophole for a staggering 35%, White House flak Tony Snow said Wednesday that Bushie will veto any and all attempts to increases taxes on hedge funds y buyout firms. Snow, never afraid to go where no one else will, noted that “This is not an administration that’s predisposed toward tax increases.” This bill is separate from the one aimed at Blackstone, Fortress, et. al., though similar in nature, and one that Treasury chief Hank Paulson believes would have “unintended consequences on capitalism,” namely that the mind-blowingly rich would have to let some of its hired help go.
Bush Attacks Tax [New York Post]
Archive for June 2007
Goldman Sachs Morgan Stanley Banker Prefers Dinner Over Sex With Blackstone Debutante Novelist
By John Carney
But the rich really are different. As they say, they have sex less often. (The jury is still out on whether they do it with fewer clothes on.) Here’s the New York Post’s Liz Smith writing about Holly and her husband’s intimacy issues.
Holly’s handsome husband, Rick Kimball, thanked his wife for keeping her maiden name and not putting his on her novel. He has been trying to keep people where he works from finding out who he is married to.
He noted that Holly told him when slaving over the book: “From here on in, it’s either dinner or sex, but not both!” Rick quipped that it was lonely to eat dinner by himself every night. Holly grabbed and kissed him in the middle of his remarks.
Last time we checked, Rick Kimball worked at Morgan StanleyGoldman Sachs.
New Party Starts For Paris [New York Post]
The London-listed $908mm Caliber Global Investment fund managed by Cambridge Place Investment Management LLP is liquidating its remaining assets and shutting down within the year. The culprit – a majority of the fund is invested in US mortgage backed securities.
Former Goldman bankers Martin Feingold and Robert Kramer founded Cambridge Place in 2002. The Caliber fund reported a $9mm Q2 loss and retained Lazard to review strategic initiatives. The strategy going forward is that there is no forward. It’s that kind of out of the box thinking that makes I-banks useful (thank you, that’ll be $3mm).
The Caliber shutdown follows another UK fund shakedown from subprime issues. Earlier this week, Queen’s Walk Investment reported a $91mm annual loss. The fund is managed by Cheyne Capital Management.
Cambridge Place’s Caliber Fund Shuts on Subprime Loss [Bloomberg]
UBS charged with running ‘hedge fund hotel’ (Reuters)
Regulators in Massachusetts have accused UBS of engaging in unethical practices to win business from hedge funds. Such activities included offers of free Red Sox tickets and cheap office space. We’re not really sure what the problem is. Presumably, UBS shareholders got the better end of the deals, or else UBS probably wouldn’t have entered into them. As for the hedge funds, it’s also hard to see how anyone got hurt. Maybe some shareholder could be upset that management is making decisions based on anything but alpha, but why should Massachusetts taxpayers be ponying up the legal bill to look out for the millionaires invested in the funds?
A New Genre on Wall St.: Bailout Blog (NYT)
Apparently, the head of the Bear Stearns unit that managed its troubled hedge funds, Richard Marin, has launched a blog. Part of it is details his experiences at the unit, while other entries are about movies that he’s seen. But here’s the thing. The blog appears to be password protected, which is lame-o. We can’t abide by that. So, Mr. Marin, we’d love it if you could see fit to shoot us a password. Or if anyone else knows its contents, we’d love to hear about it.
Hanesbrands plans to send more work overseas (Chicago Tribune)
Underwear maker Hanesbrands (Hanes) said that it will close a number of plants in the US, Mexico and the Dominican Republic, moving that production into even cheaper locales across Asia and Central America. When critics of globalization decry the “race to the bottom”, this is exactly what they’re talking about. When even Mexican workers aren’t immune from cost competition, it would seem that the country is running furiously on a treadmill. But it’s also worth asking whether Hanes is getting anywhere. Does it really make good business sense to set up factories and then move on anytime you think you can get a labor edge somewhere else? While it might sound good on conference calls, it comes off as grossly inefficient.
Alitalia Seeks Another Suitor After Aeroflot Withdraws (Dealbook)
The European state airlines have always been troubled in some sense or another, but by all accounts, Italy’s Alitalia has been the worst of the worst. Not surprisingly, given what we know about government in Italy, the airline has been, simply put, exceptionally poorly run. It’s been trying to unload the damn thing for a while, but it doesn’t seem to be doing well. Russian firm Aeroflot had been interested in purchasing, but it pulled out after claiming that it hadn’t been given access to critical operating data. Our bet: the papers were probably just lost. So, it’s looking for new suitors. Good luck on that.
$$$ Money – Get it while it’s Hot [Long or Short Capital]
$$$ Bear Stearns appoints somebody to do something about it’s minor HF problem [Reuters via NYT]
$$$ Classy, Cerebral Beauty seeks Cultured, Magnate Dom CEO or hedgie. Please write “Genuine Alpha Male” in the subject heading of your email. [Craigslist]
John and Timothy Rigas, the father and son who used Adelphia funds for such opulent treasures as 100 pairs of bedroom slippers and two $3000 Christmas trees were ordered to prison after a four-year appeal process. Adelphia Communications collapsed in 2002 when the firm disclosed $2.3bn in off-balance-sheet debt.
Both Rigases must report to the slammer on August 13, Timothy for twenty years and John, who is 82, for fifteen.
Adelphia founder Rigas and son told to report to prison in August for fraud convictions [Boston Herald]
Were you affected by the five-minute blackout on the Upper East Side? Share your experiences here.
With construction of its new JPMorganChase tower at WTC Site 5, Jamie Dimon can resume his rightful place at the top of the Greek Orthodox Church. Never one to be called anything but a strict constructionist, the belly of the DimonDome plans to rest over St. Nicholas Greek Orthodox Church and 165 feet over Liberty Park.
The building concept (pictured left), from Kohn Pederson Fox and The Real Estate, is being criticized as not only a good picnic spoiler but a bit of an eyesore, and may be pared back, according to architect Gene Kohn. The cantilever is a “beer belly” according to the New York Post and a “tower of darkness” according to Curbed.
Despite public opinion (the JPMorgan way!), the cantilever will exist at all costs, and contain JPMorgan’s trading floors. JPMorgan plans on doling out a few million to the Greeks to keep them quietly in the shadow of the 42 story tower and amidst the whooshing lament of the vortex of lost souls.
One upping JPMorgan is the new Goldman Sachs World Headquarters (pictured right) at 43 stories down the street at West Street between Vesey and Murray (Battery Park Site 26). The tower, which has several more lateral bumps than a measly lone cantilever, is already 8 stories high under construction and expected to open in 2009. If the JPMorgan tower is the “tower of darkness” then Goldman HQ is the tower of light, or at least greenery, as the building is being prided as a marvel in green-tech and earning all sorts of eco-friendly certifications.
WTC Chase Tower Will Block Church’s Heavens [Curbed via DealBook]
Goldman Sachs New World Headquarters (West and Vesey Streets) [Lower Manhattan.info]
Were you worried there wasn’t going to be an update to the pettiest story of all time? Worry no longer. Here’s a quick recap for those of you who haven’t been keeping score, which seems ridiculous to us since this story is about shrubs, but whatever, that’s your journey. Anyway, Goldman Sachs MD Marc Spilker wanted to widen his path to the beach at his house in the Hamptons. Unfortunately, his neighbor, Kynikos founder Jim Chanos had a problem with this, since his row of hedges would have to be taken out in order for Spilker’s family to be able to “maximize their beach enjoyment.” Spilker cited a deed that said he could have 15 feet, Chanos produced one that said otherwise. Then this week they went to court to negotiate; Spilker claimed to only want a few feet (i.e. 6-7), Chanos gave it to him and asked for it to be put in writing.
The (soon-to-be-promoted?) Goldman Sachs employee apparently then had a change of heart, re: abiding by the terms of the agreement, and yesterday afternoon decided he’d rip down the remaining hedges on Chanos’s property. Oh, and new neighbor Stevie Cohen, who shares the path to the beach, has thrown his support to Spilker.
After yesterday’s announcement that an “agreement” had been reached to secure the editorial independence of the Wall Street Journal, Rupert Murdoch said that he would not raise his current, $5bn bid for Dow Jones. “Everything is done. We are just waiting for a final approval of the Bancroft family. The final approval is in the next two, three week’s time or not at all,” Murdoch said today from Poland.
This, of course, doesn’t mean a modest bid increase is out of the question. One can hardly expect a perspicacious dealmaker like Rupe to tell Reuters, “I probably will up the offer, I just want to see if the Bancrofts will take the five billion first.”
It also seems that yesterday’s agreement on the Journal may have been prematurely announced. Parts of the deal remain, “sketchy or not yet written,” the New York Times is reporting. “The nuts and bolts are there, but not all the details,” a source involved in the negotiations said. Only a few of the Bancrofts, who have ultimate veto power over the deal, have been briefed on the still-unreleased Dow-NewsCorp. agreement.
Dow Jones Accord In Place, But Incomplete [Dealbook]
Murdoch: No plans to raise Dow Jones bid [Reuters]
For the first time ever, the words “former VP Dan Quayle and former Notre Dame football coach Lou Holtz,” are not the setup to a joke (punchline – because I just gave the lineman a potatoe). Instead Dan & Lou, and CEO of K2 Richard Heckmann, are planning to raise up to $500mm for a SPAC (Special Purpose Acquisition Company). Heckmann is planning on leaving K2 by August 1.
SPACs are publicly raised entities that provide a virtual blank check for a management company to make an acquisition. The acquisition doesn’t have to specified beforehand, although there are strict limits on when a target must be designated, and when a SPAC needs to spring into action (or else it would be the greatest scam ever). Why investors would want to give Quayle and Holtz a blank check is anyone’s guess. I guess a few companies could use more heart and less brains (Quayle plans to make “Rudy” a managing director).
The largest SPAC is Freedom Acquisition Holdings, which raised $528mm last Decemember. SPACs have raised $4.1bn in 33 IPOs this year, taking advantage of the blank check fervor created by the planned and executed IPOs of hedge and PE funds.
Quayle has been busy as chairman of the global investment unit at Cerberus since 1999 and Holtz has been saying nonsensical things on ESPN since retirement.
Quayle joins ‘blank check’ firm’s IPO [Los Angeles Times]
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