Archive for May 2009

Sure, the Greenlight founder is disappointed with Obama and Co, which he believes is “following the same path as the Bush administration,” as it attempts to bring us back to the heady days of 2006 (“by propping up asset prices and reflating the popped credit bubble, subsidizing bank creditors and shareholders, and delaying needed bank recapitalizations, while hoping for an economic recovery”). But! Einhorn is confident Bush II is smart enough to wake up and do the right thing. Here are his closing remarks from the Ira Sohn conference. Have to say, we are loving this passive aggressive side. Notice how throws the campaign’s favorite word back at them?

“I am optimistic because even though I believe that Secretary Geithner is leading us down the wrong path, President Obama has demonstrated an ability to change his mind in other areas. To me, this reflects the work of an intelligent pragmatist acting upon fresh understanding. I am optimistic that President Obama is capable of making similar reassessments of the economic rescue plan, and changing direction there as well.”

David Einhorn Strikes Again [Daily Intel]

  • 28 May 2009 at 3:16 PM

U.S. v. U.K. Cagematch Continues

runrunrun.jpgJust in case you had not yet gotten your fill of the Cross Pond Classic, another event is introduced: The 400 meter stress-test hurdles. GO!

Analysts Olivia Frieser and Andrea Cicone concede the test is a “real one”, in so far as the parameters – 12 per cent unemployment, 50 per cent fall in house prices and a six per cent decline in GDP from peak to trough – are reasonably demanding:
The assumptions seem severe enough to us and therefore the stress test seems real…
However, they note:
…if we were picky, we would say that they remain static tests, and that these assumptions are merely in line with the base case of our admittedly bearish economists.

The US and the UK stress tests have two very different objectives [FT Alphaville]

  • 28 May 2009 at 3:03 PM

You Can Take Your Bull’s Eye And Shove It!

Target Corp.’s shareholders have re-elected the company’s slate of directors, rejecting a hedge fund’s alternate slate, according to preliminary vote totals.
The head of Pershing Square Capital Management has argued that the struggling retailer needed new perspective, especially in the areas of retail and real estate so it can better compete with rival Wal-Mart Stores Inc.
Shareholders rejected those arguments at Target’s shareholder meeting outside Milwaukee on Thursday. Shareholders also sided with the company in approving a measure that sets the board’s size at 12 members.

Target shareholders reject Ackman board slate [AP]
Update: Margaret Brennan: “Reportedly Ackmann himself is very disappointed with the results; he in fact choked up during his presentation today.”

  • 28 May 2009 at 2:30 PM

Carlyle To Suck It (Natashas To Saturate Available Credit)

suckit.jpgThe Vuitton, Versace, Gucci, and Dior bags will have to wait, or slip into a slipping revolver, we suspect, as Carlyle group finally admits it got tagged. Takes a lot for a private equity firm to admit to such things without lots of excuses about being on the left side of the “J curve.” We’re thinking short-luxury-goods just became an (even more) interesting trade.

“After several years of unprecedented growth, product innovation, geographic expansion, capital deployment and investment gains, our world changed dramatically,” the Washington-based firm said in its annual report on its Web site today. “2008 was a humbling experience for us.”

Carlyle Says Returns to Shrink After ‘Humbling’ Year for Firm [Bloomberg]

  • 28 May 2009 at 1:55 PM

The Pad That Lies Built Up For Grabs

Picture 1426.png
Are you into impersonating executives? Inventing hundreds of millions of dollars out of thin air? Staging fictional conference calls? Have we got the place for you! Curbed reports that Marc Dreier’s One Beacon Court condo will be up for grabs this July. You’ll get: 3,000 square feet, four bedrooms, five baths, a 750 square foot terrace and the sense that you’re in the presence of greatness.

  • 28 May 2009 at 1:08 PM

Sad News From Barclays

We’ve been informed that a Barcap banking analyst (tech, a legacy Lehman employee) killed himself over the weekend of the 15th. One account claimed that he’d been up for three days working and was berated by a superior, but that has not been confirmed and may simply be a product of the rumor mill. The layoffs that went down yesterday were apparently supposed to occur last week but were pushed back because of the tragedy. Barclays has not yet returned calls for comment.

Picture 1425.pngBecause it’s unlikely Pequot’s going to need the room they took over at 187 Danbury Road just last month. Art Samberg and Co. had previously been bunking in a building shared with Bridgewater, but Ray Dalio needed the space to expand and apparently “made Art an offer he couldn’t refuse” (never took Dalio for the murderous type but sure, we’ll buy it) and off Art went. Sad news for the landlord in Wilton, who “did a ton of build-out” in preparation for the Pequot people but possibly happy news for those of you interested in taking over the four year lease? (Of course, the wind down of the funds will take some time, but we’re assuming Art and the Sambergettes don’t need more than a few thousand feet and the space for a crying room.) The digs are apparently “quite plush” and include “lots of fancy-schmancy artwork” and sweet furniture, though those items will likely not come with, but rather be sold to the highest bidders (we’re told John Mack has already called shotgun on the chaise lounge).

  • 28 May 2009 at 12:03 PM

Ira Sohn Conference

einhornseaglescouts.jpgWe are sure you’re like us and just skip to the David Einhorn section when it comes to the Ira Sohn Conference notes that Zero Hedge has posted, courtesy of BTIG’s Mike O’Rourke. Here’s the take on Einhorny:

The theme of Davd Einhorn’s presentation was the curse of the AAA. Obama administration is following the same policies of the Bush Administration. The administration is reflating the economy back to 2006 levels. For the economy to recover underwater entities need to restructure their debt. The willingness for banks to negotiate in this environment depends upon where the positions are marked. The Obama loan modifications lack the most important aspect of restructuring: debt reduction. The debate in the banks was too narrow with only two options discussed- Nationalizing versus Taxpayer Bailout. There is a 3rd option, debt or preferred equity conversion to common equity. Attempt to induce debt of equity conversions without creating a downdraft in the group. Banks are not materially more solvent today than they were two months ago. Regulatory forbearance has created this rally in banks. We should be overcapitalizing the banks and direct them to restructure the debt of their borrowers. The Government spending and guarantees put the U.S. AAA credit rating at risk. US debt needs to be managed responsibly.

Einhorn goes on to nuke Moodys, his short. Good play!
Ira Sohn Conference Notes [Zero Hedge]