Berkshire to Pay $4.5 Billion for Pritzkers' Marmon (Bloomberg)
WaBu's Berkshire Hathaway will spend $4.5 billion for a 60 percent stake in privately-held Marmon, a Pritzker-family held diversified services firm, whose businesses include hotels and rail services. Buffett describes Marmon as, "our kind of company." Sounds true. Nothing too splashy or flashy. Just some good old Graham & Dodd style operations. Now wait for the spate of stories about how Buffett is back, along with big lists of companies in play.
Retailers hope post-Christmas sales can save the season (USA Today)
And there you have it. More analysis here from Barry.
Amazon.com Wraps Up Its 13th Holiday With Best Season Ever
On the other hand, if you're Amazon.com, and you're the biggest e-tailer in the world, then you had a good season. If there's one statistic to keep in mind, this is it: "If you lined up all of the GPS units Amazon.com sold this holiday, they would make a trail from New York to Philadelphia; however, a new trail wouldn’t be necessary with the use of a GPS."
Home prices post record drop (CNNMoney)
Well, it looks like were were premature in calling a bottom. Several months ago, we said home prices were due to rise, since the Realtors had dropped their bullish spin. That's what you get for relying too much on contrarian indictors. Never again! Anyway, yeah, October. Record fall in house prices.
Luxury Air Travel: Still Not Proven (Felix Salmon)
On the decline of MaxJet.
Posted by , Dec 26, 2007 11:29AM
Every season is always Amazon's "best season ever"......all about wording.
Posted by Random Banker , Dec 26, 2007 12:33PM
Hilton gives fortune to charity (not Paris) (FORTUNE)
its a sad say for trust fund babies everywhere. LEt hope this shit doesn't catch on.
Posted by 1-2 , Dec 26, 2007 3:04PM
A serious, yet light post.
Has anyone else read the fact Blank-Check IPOs (SPACS) are the new stock du jeour? I find this interesting because it means that people are continuing to pay a premium for opacity instead of clarity.
-First we had our plain vanilla (Stocks/Bonds/ETFs) securities.
-Second, the major push for "yield" in CDOs and derivatives, where people have an idea what they own, but no assurance as to the actual underlying securities.
-Third (now) we have people who are paying money TO NOT KNOW what the securities they are buying are (SPACS). No way to analyze business model, operations, management, etc etc.
Needless to say this is another cyclical movement, but when people are seekign tax efficiency and unknown securities it's surely a bad sign because it means everything else is tapped out.
Just a thought. Anal_yst, any thoughts?
Posted by Random Banker , Dec 26, 2007 3:21PM
@1-2:
SPACS are not new. And now that the credit markets have frozen up I doubt anymore of these deals are getting done. There's no way a no name SPAC is going to compete for deals with KKR. Which means they'd have to over pay, which means they'd need access to more liquidity which is exactly what we have less of these days.
What've you been reading that "prince of wall street" kid? He's a clown.
Posted by 1-2 , Dec 26, 2007 4:38PM
Random...
I was not saying they're new. Nothing is really "new". I was only commenting about the rotation into them and their recent surge in popularity. This is on the back of (as you touched on) the fact that all the major PE firms have taken the low-hanging fruits out there. If a deal made sense in a buy-out kinda way it has probably already been done.
That's all.
Posted by Anal_yst , Dec 26, 2007 4:46PM
While certaintly not an expert with SPACs by any stretch of the imagination, in a general sense they reek of bullsh!t for reasons already pointed out, not to mention the incentives to the sponsors/management to take care of themselves at the expense of the "public shareholders".
If the credit (p/e) 'bubble" had lasted a tad longer I imagine that you'd have seen a larger flood of SPAC IPO"s pitched to joe & jane investor as a way for them to get exposure to the "superior returns available to wealthy P/e investors". Of course this would (was) the signal that good things were coming to an end, much like most bubbles of the past.
Posted by 1-2 , Dec 26, 2007 5:22PM
Well said Anal_yst.
Posted by TheUnrepentantGunner , Dec 26, 2007 5:29PM
Anyone want to have a go at what MBI will close at tomorrow?
I am scratching my head over it myself.
Posted by Random Banker , Dec 26, 2007 6:25PM
I never understood why anyone would ever invest in a company with no assets in the first place so I guess this is a non-question for me.
For that matter I consider the Blackstone BX partnership units to just be another form of SPAC, since the units holder have no vote and no claim on assets. The SPAC concept is, was and will always be ridiculous. I'd rather invest in pets.com .
Posted by spacitrage , Dec 26, 2007 6:26PM
"There's no way a no name SPAC is going to compete for deals with KKR."
That's just patently ridiculous. Does KKR have public currency with which to do a deal? If you do a deal with KKR, do you end up with a public company? I'm not saying a SPAC transaction is always superior, quite the contrary. But SPACs have a huge liquidity advantage in today's markets.
Posted by Random Banker , Dec 26, 2007 7:19PM
OK if the SPACs are using equity instead in stead of debt to do their deals then what's going to drive their returns? That's a zero sum game deluting you current share holders in order purchase new assets, creates ZERO value. KKR makes most of its returns form the debt tax shield on the interest on their high yield issuance.
And you also assumes the SPAC's public equity isn't worthless, who exactly is going to except SPAC equity vs. cash as consideration?
Posted by That Guy Drinks Beer , Dec 26, 2007 8:20PM
http://hosted.datajack.org/spacker/spacker.html
Posted by Anal_yst , Dec 27, 2007 9:10AM
Former Pakistani Prime Minister 09:04 12/27 WSJ UPDATE: Pakistan's Bhutto Killed In Suicide Attack-Reports
Benazir Bhutto was killed during an apparent suicide bombing attack in the military garrison town of Rawalpindi, according to her aides, throwing Pakistan's political system into a new round of turmoil.
Bhutto was emerging from a political rally in Rawalpindi when an attacker
fired shots and detonated himself, according to news reports from Pakistan.
While this really has little to do with normal DB topics, anyone who has been following the debacle going on in Pakistan should know how big of a blow this is to efforts at de-militarization, democrization, etc there. Huge surprise, Bhutto had criticized Musharraf for not doing enough to curb (islamic) terrorism while in office (as both military and political leader, none-the-less).
Posted by Anal_yst , Dec 27, 2007 9:15AM
Oh, and re: SPACs, which is more ridiculous, Bono "running" a P/e firm, or Dan Quayle leading a SPAC?
Either way the emergence of both should have been yet another sign that good times were coming to an end.
Posted by Bhutto on next Economist cover? , Dec 27, 2007 9:23AM
Pretty huge. Her family is like the Kennedys of Pakistan now...
Quayle is supposedly quite popular in Asia; Bono is a joke everywhere. So, I'd take Quayle.
Posted by spacitrage , Dec 27, 2007 9:53AM
What will drive their returns? A decent amount is created simply via the public/private valuation arb. The balance needs to be created via buying the company right, which is obviously hard to do. This would create decent returns on its own, except you need to overcome warrant friction and management carry.
What most people fail to realize is that there are 2 different groups buying these things. Hedge Funds buy 95% of the IPOs and are able to create returns in the interim by arbing the common/warrants/units. Once a SPAC gets a deal done, it passes to the standard universe of small-cap investors.
SPACs have a decent record of getting deals done, but the performance after the deal is much more suspect. Some older SPACs have 2 warrants out for every common share - try overcoming that dilution.
Posted by Yo! , Dec 27, 2007 10:03AM
Enough on SPACs for now. We have more Tobias news.
http://www.nypost.com/seven/12232007/gossip/pagesix/hedge_fund_sex_tales_denied_292392.htm
Posted by series7.5 , Dec 27, 2007 10:04AM
i'd have to go with Quayle too, figure he has picked up some tricks after almost a decade at Cerberus right?
Posted by 1-2 , Dec 27, 2007 10:04AM
Ok, so i know i opened up the SPAC can of worms, but let's put that to bed for a bit. More important questions are at hand.
It's a slow day for everyone, im sure, so let's have a little unscienctific poll:
Vote for your hottest CNBC reporter (and feel free to back up your answers).
My vote: Rebecca Jarvis
(Carney, you owe me for keeping your site traffic while you're still passed out from NagaSakes)
Posted by , Dec 27, 2007 10:22AM
Let me chime in with the gay man's perspective: None of the guys are even remotely hot. Obviously, they're not targeting anyone beyond straight men. That can't be a good business decision.
Posted by , Dec 27, 2007 10:29AM
becky quick .. schwing!! she looks like every chick i ever ended up banging after a frat party.
special mention to saijal patel, who looks a like like the few chicks i banged DURING a frat party
http://www.gogomag.com/cgi-bin/tvheads_viewer.pl?tvheads277294&277294&Saijal
Posted by , Dec 27, 2007 10:31AM
because so many gay men watch cnbc all day?
Posted by 1-2 , Dec 27, 2007 10:33AM
Move the cnbc reporters to today's opening bell...
Posted by , Dec 27, 2007 10:35AM
what about mitali mukherjee
look at those eyes!
http://www.discusstv.com/gallery/data/media/231/CNBC_-_Mitali_Mukherjee_7.jpg
Posted by , Dec 27, 2007 10:48AM
@10:31 No, not just for the gay guys, but for women too. Clearly the female talent is designed to arouse the male audience. Its short sighted to think that this doesn't cut both ways. There must be a decent sized female audience.
Posted by Anal_yst , Dec 27, 2007 12:20PM
It probably couldn't hurt having some 1/2 decent looking guys (perhaps thats why Cody has his show on FBN, although thats a stretch), but honestly what % of the demo is female? 20%, 25% tops?
Oh, and the hottest girl on CNBC is that british (or something) chick who was hosting OTM back in August while Melissa was out, forget her name, hot blonde though, and the accent just seals the deal.
Posted by no_slappz , Dec 27, 2007 3:26PM
Good news -- Buffett is buying.
Bad news -- he's buying private companies.
Next he'll probably buy that private muliti-billion-dollar roofing supplies company that will soon raise the for-sale sign due to the tragic but ironic death of the company's owner who died when he fell off his own roof.
Posted by dilo , Dec 27, 2007 7:29PM
all these gorgeous CNBC women are taken...but my vote for the hottest one's Erin Burnett.