As we have previously discussed, when one grows up in Greenwich, CT, there are certain expectations. Prep school, college, Wall Street, death. And in the beginning, Garrett Hoelscher did what he was told. He attended the Brunswick school, then Emory and did a summer internship at RBS. But he was just going through the motions. “Nobody there [was] passionate,” he told Business Insider. “It’s all just numbers and spreadsheets.” (Also, people smoked “two packs a day,” which offended him.) But he still took a job working at Wedbush Investments in LA, where the unhappiness followed. It wasn’t until a transformative weekend in Stratton, VT that decided he needed a change. And that’s when Hoeslscher, whose favorite quotation on Facebook is “Don’t talk about it; be about it,” came up with a plan. To sell waffles in Aspen. Read more »
Archive for October 2010
Passionless, Cigarette-Smoking RBS Employees Inspire Summer Intern To Flee Wall Street For Waffles
By Bess Levin
The above photo is the header on the website for a firm called Ehrman-Loeb, the suggestion of course being that it is a shot of their trading floor. That suggestion, you should know, is a bald-faced lie and some people are not going to take it lying down. Read more »
For the ignoramuses among us, an Ironman is a triathlon that consists of a 2.4 mile swim, a 112 mile bike and a 26.2 mile run. Many who enter such races are forced to drop out and those who do end up finishing typically train for the event 6 to 9 months ahead of time, and have competed in triathlons of other distances for years prior. On a lark, Goldman analyst Brian Kuritzky, who had never participated in such an event, to say nothing of the fact that he had no experience in biking or swimming, decided three weeks ago that he would enter the Great Floridian triathlon in Clermont, Florida, and bet his co-workers he could finish in under 16 hours, sans training. Read more »
Warren Buffett Meant To Be More Specific When He Said Hedge Fund Managers Rob Their Clients Blind
By Bess LevinAs you may have heard, Warren Buffett has tapped a Berkshire Hathaway successor in the 39 year-old Todd Combs, the manager of Greenwich-based Castle Point Capital Management. Previously, the Oracle had this to say with regard to hedge fund managers:
[In 2006 Buffett opined] that hedge funds, which he described as “hyper-helpers,” overcharge investors. “Particularly expensive is the recent pandemic of profit arrangements under which Helpers receive large portions of the winnings when they are smart or lucky,” he said in an annual letter.
To be clear, however, he just meant to say that some, and not all hedge fund managers, are blood-sucking leeches. Read more »
Buffett Says Todd Combs Is ’100% Fit’ With Berkshire Culture (WSJ)
Mr. Buffett says he and Mr. Munger were sold on Mr. Combs not only because of his ability and intelligence but also because they were convinced he would fit in to Berkshire’s no-fuss culture. Mr. Combs, a Sarasota, Fla., native who is still partial to his alma mater Florida State Seminoles football team, struck a lasting impression, Mr. Buffett says. He and Mr. Munger arrived at the decision based on the same kind of “gut check” they make with acquisitions of companies. “He is a 100% fit for our culture,” Mr. Buffett says. “I can define the culture while I am here, but we want a culture that is so embedded that it doesn’t get tested when the founder of it isn’t around. Todd is perfect in that respect.” “He is smart, and he can adapt,” says Sheryl Lucante, who was the maid of honor at his wedding to wife April.
Deutsche Bank posts net loss on Postbank charge (MarketWatch)
The bank lost 1.21 billion euros ($1.7 billion), or €1.75 a share. In the same period a year ago, it earned €1.38 billion, or €1.92 a share. The loss did not come as a surprise to investors, however, as Germany’s largest bank had warned in September that it would slip in the red in the third quarter because of a €2.3 billion Postbank charge.
Deutsche Bank Pays Investment Bankers More Than Goldman Sachs (Bloomberg)
If you look at how much they can pay, on average, which obviously means nothing for top performers but nice try!
Moody’s: US Companies Hoarding Almost $1 Trillion In Cash (Reuters)
Nonfinancial U.S. companies are sitting on $943 billion of cash and short-term investments, as of mid-year 2010, compared with $775 billion at the end of 2008, Moody’s said. This would be enough to cover a year’s worth of capital spending and dividends and still have $121 billion left over, it said. However, “we believe companies are looking for greater certainty about the economy and signs of a permanent increase in sales before they let go of their cash hoards, which they suffered so much to build,” Moody’s said in a report. Read more »
$$$ Buffett Successor Todd Combs’ Castle Point Capital Management Returns [AR]
$$$ Goldman Sachs Boosts Size of 50-Year Debt Offering [Reuters]
$$$ Air New Zealand to Offer “Cuddle Class” on Auckland-LA Flights [NBCLA] Read more »
Say what you will about 70 Pine Street– the headquarters of AIG, the most majestic insurance company/hedge fund in all the land, but we’ve all had some good times there, whether directly or as the indirect beneficiaries of stuff that went down. It’s incredibly emotional even just to think about the fact that the company is moving out of the building but in times of great sadness like these, we must put on a brave face, celebrate, and pay homage. To that end, management is throwing a little party next week to mark the end of the era. Refreshments– presumably alcoholic in nature, as is fitting– will be served and while the invite doesn’t say, we’re just going to assume that reenactments of the “best of” moments will take place. Such as:
- The day Hank Greenberg signed off on AIG-FP and Joe Casanno saying by calling him “one of the greats”
- The earnings conference call in May of 2008 when they announced they were raising capital AND raising their dividend
- The time Goldman Sachs sent two dudes over in the middle of the night to shove Ed Liddy’s head in a toilet while the following dialogue took place:
GS Thug: Where’s the money, Liddy? Where’s the fucking money, shithead?
Liddy: It’s uh… uh… it’s down there somewhere, let me take another look. Read more »
The other Swiss bank apparently did some bloodletting today and may have plans for more in the future. Read more »
We all have our own ways of getting in the zone– for Bill Gross, it’s shaking his money maker, for the Bridgewater founder, it’s 20-40 minutes a day of om. Read more »
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Communiqués
Ten Years Ago Paul Tudor Jones Had An Acute Case Of Plantar Fasciitis
By Bess Levin
This story and more in Tudor’s latest letter to investors.
Our extraordinary times offer extraordinary opportunities, but as with most opportunities, there will be winners and losers.
Economies in the developed world find themselves with unemployment levels not seen since the Great Depression. The response from respective governments has been massive fiscal stimulus in conjunction with monetary easing. And now many of these governments, having exhausted all fiscal stimulus measures that are politically feasible, are about to embark on another round of quantitative easing. The Bank of England, the Bank of Japan and the US Federal Reserve have implemented, or are considering implementing, significant rounds of government securities purchases.
Will these measures actually succeed in lowering the chronically high levels of unemployment? Or are the unemployment problems of these countries so structural in nature that these policies will have only limited impact?
We’ve enlisted modeling and forecasting firm Macroeconomic Advisers, LLC to assist with answers to these questions. But, first, a story: About ten years ago I had an acute case of plantar fasciitis in the left foot, a condition in which the fascia, or the covering right beneath the skin, had become highly inflamed. I asked Pete Egoscue (egoscue.com), a renowned postural specialist but one without medical training, to take a look at my foot. Pete had, after all, healed a number of people I knew, including my wife. Because Pete was self-taught, I was a skeptic— as any good trader would be.
Pete said that he did not need to look at my foot because my foot was not the problem— a response that suggested I was dealing with a quack. But I was patient and continued to listen. He proceeded to explain that the pain in my left foot was the consequence of a structural, postural deficiency in my hip alignment. My right hip was rotated in such a fashion as to make the left side of my body do all the work and bear all the weight, culminating in the inflammation of my left foot. “The pain you feel in your left foot is just the symptom,” Pete said. “If you treat it symptomatically and ignore the structural issue, you will never solve the problem.” I did not immediately grasp the full meaning of his words, but I followed his prescription,and in a few days the pain was gone. Some time later I realized that those words were probably the wisest I have ever heard from any human being, and that they apply to more than just the human body.
Study: Credit Credit Crisis Was Caused By Bankers Who Got Off On “Painful But Exhilarating Losses”
By Bess Levin
Were you one of the bankers whose firms racked up billions in losses and brought the global economy to its knees just two years ago? Have you been happy to let people assume that it was merely a matter of greed– that you didn’t set out to lose the money, you just saw the potential dollar signs and couldn’t help yourself? Well your cover is blown. We all know the truth now– you wanted to lose, big time, because you’re sick, sick fucks.
In an article published in Angelaki: Journal of the Theoretical Humanities, Dr Crosthwaite says that the willingness of banks to deal in subprime loans and related derivatives, which were bound to result in disastrous losses, can only be understood if the bankers unconsciously desired the destruction of their own institutions. Dr Crosthwaite argues that such catastrophic losses can be sources of masochistic pleasure for those who experience them.
Sure, it felt nice to make it rain in the years prior but after a while taking home fat paychecks no longer did it for you. You needed something more intense to get the tingling sensation. To feel alive again. So you came up with stuff like the the Merrill Lynch Enhanced Testicle Clamp CDO^4 Fund, strapped it on and said asked– no, begged– the market to make you its bitch. Read more »
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