If you love a good conspiracy theory but find Ron Paul’s and Rick Perry’s calls to kill Ben Bernanke for counterfeiting a little played out, do we have some good news for you. The Carlyle Group, a mild mannered private equity firm by day that at night transforms into an evil conspiracy among George Bush, Skull & Bones, the Saudi royal family annd the Illuminati, is about to get a lot more public attention.
Bloomberg reports that Carlyle is shopping an IPO. While we do worry that IPOs by smart private equity managers have a pretty solid tradition of top-ticking (Blackstone IPOed in June 2007 and the market has never been the same since), we like David Rubenstein’s efforts to get valued for making good investments instead of just for having a ton of money:
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In 2008, commodities trader Todd Edgar made JPMorgan $100 million. Soon after, he and his 12-man team were poached by Bob Diamond at BarCap, after being offered a “$50 million cash and shares package” to jump ship. JPM was pretty pissed about it, and complained to the FSA, to no avail. BarCap, naturally, felt great about the situation, and consider the pounds money well spent. The Brits are less than thrilled with Edgar et al today, after it was announced that the last two years have been fun but they’ll be taking off now. Continue reading »
Abercrombie & Fitch Co. said Wednesday its second-quarter net income rose 64 percent, boosted by higher demand for its preppy fashions in the U.S. and Europe…But like all retailers, Abercrombie & Fitch Co. is facing higher prices of commodities such as cotton during the key back-to-school season. “Costing pressures will be greater in the second half of the year, and macroeconomic uncertainty has increased,” said CEO Mike Jeffries. The news comes a day after the New Albany, Ohio-based company issued a statement saying that it offered “substantial payment” to a Michael “The Situation” Sorrentino, a member of the cast of the MTV Reality Show “Jersey Shore,” to stop wearing its clothing, saying association with the cast member, known for boorish behavior, could cause “significant damage to our image.” Abercrombie said it had extended the offer to other cast members as well. “Management may be correct in asking (and offering to pay) the cast of `Jersey Shore’ to stop donning its logo-wear,” said Wall Street Strategies analyst Brian Sozzi. “It doesn’t need the infusion of MTV and side job dollars from the Jersey Shore crew, if the second quarter of 2011 was any indication.” [AP]
Fresh Plan For Europe Crisis (WSJ)
Meeting in Paris, German Chancellor Angela Merkel and French President Nicolas Sarkozy proposed that euro-zone leaders gather more often to better coordinate budget and tax policies across the currency bloc. They also recommended electing European Council President Herman Van Rompuy as euro-zone chief, but gave no indication that he would wield much power.
Perry’s Swaggering Tone Towards Bernanke May Not Play Well Outside Of Texas (Bloomberg)
“You just can’t run around shooting your mouth off and talking about the Federal Reserve and talking about treason and getting ugly,” said Cornelius Hurley, a law professor at Boston University and a former assistant general counsel to the Fed’s Board of Governors. “That’s just not appropriate.” Hurley, a self-described “disenchanted” supporter of President Barack Obama, says tension long has existed between politicians and the Fed, yet Perry took it to new heights. “I have never heard the rhetoric ramped up the way Governor Perry did,” he said. “That’s a very troubling development. We expect more of our president and should expect more of our presidential candidates.”
Rising Spending Holds Off US Double Dip (Bloomberg)
Reports last week showed retail sales rose by the most in four months and claims for jobless benefits dropped to the lowest level since early April. “There’s nothing in here to suggest the economy is slowing, let alone declining,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Production continues, and production continues because consumers are still making their purchases.”
Gerard Depardieu Urinates On Plane (NYP)
“Je veux pisser, je veux pisser,” implored Depardieu, according to Daniele, who was among the 127 passengers on board the Air France jet left reeling by the antics of the giant of the French screen. “The attendant said ‘I’m sorry, you’ll have to wait fifteen minutes, [when] we’ll be in flight. The toilets are locked’,” Daniele added. Depardieu said he could not wait, unzipped his trousers and proceeded to urinate on the carpet. Continue reading »
When we saw that three boutique banks represented Google and Motorola Mobility in their deal, we were a little puzzled about why. Not that it’s unusual to hire Lazard, Centerview or Qatalyst, but after reading Felix Salmon‘s lament for the breathless pre-market M&A scoop we wondered if that supplied the explanation. Maybe Google and Motorola left out the big banks because they have kind of a deserved reputation for leaking deals, and because keeping news quiet is easier at a smaller shop than at a place with thousands of public-side employees? But on further inspection that theory kind of fell apart, as trading in MMI suggests that the deal may have leaked last week.
The New York Post has what seems to be the correct explanation: Motorola had actually spent a lot of time with full-service bulge bracket investment banks recently, and had come to the considered conclusion that they’re all a bunch of dicks.
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If you walked by 388 Greenwich Street earlier, saw scores of Citigroup employees standing around and panicked that everyone had gotten laid off and/or they decided to just shut down the whole operation, do not worry. Continue reading »
Let peripheral bond investors shudder. The fate of the European bailout mechanism depends on unanimous approval by member states. The Finns have proven balky. Europe’s fate may rest in the hands of Finland’s political leadership. It’s good to see that the finance minister is so…transparent. This is not technically NSFW; but quite possibly not safe for your sanity. Continue reading »
We’ve noticed that some of the most vocal critics of financial industry pay are those who used to work at investment banks. We’re not sure why this is – maybe the former bankers know how grossly overpaid their ex-colleagues are, or maybe now that they’ve gotten their money they want to pull up the ladder so that their Hamptons vacations aren’t spoiled by crowds of current bankers.
That question came to mind as we read yesterday’s editorial in Bloomberg by William Cohan, former Lazard and JPMorgan banker and current advocate of killing bankers for their pelts. Cohan wants to end the “moral rot” in banking and get back to basics. Some of his suggestions are standard, like a vague Volcker-Rule-Glass-Steagall “Close the Casino” prescription. But more interesting is this:
We could start by creating a new security that represents the entire net worth of the top 100 executives at the remaining Wall Street companies. These people decide what business lines to be in, how to deploy capital, who to promote and how much to pay. This new security would be at the bottom of the corporate capital structure — below corporate debt and shareholder’s equity — and would be the first asset to be wiped out if the company performs poorly. This would ensure that today’s Masters of the Universe are focused on the risks their businesses are taking.
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Are you in the market for: a vintage 1980s General Hustler Pro Freestyle BMX Bike, 75 pounds worth of K’nex pieces, a skateboard, a Nintendo Wii Black Console in the original box with the controller and numchuck, a clarinet, a trombone, or a set of marching band drums? Would you like to be part of a movement that 1) “sticks it to evil corporations” 2) “tells them to shove it” and 3) “send the likes of Goldman Sachs and freebay back to H3ll!”? Do you have any gold or Legos on hand? Consider this your lucky day. Continue reading »
The leaders of France and Germany disappointed financial markets Tuesday by ruling out issuing euro bonds to fix Europe’s debt crisis. Instead, they agreed to float proposals in September for a tax on financial transactions and push for closer joint governance of economic policy. Many experts say the only way to ensure affordable financing for the bloc’s most financially distressed countries would be for the euro area to issue joint eurobonds. But both French President Nicolas Sarkozy and German Chancellor Angela Merkel said they believed euro bonds were not part of the solution to Europe’s debt crisis…Sarkozy and Merkel also proposed that all 17 euro zone countries commit to balanced finances and write that goal into their constitutional law by summer 2012. Among other measures announced, he said they would also seek to ensure better cross-border economic government for the euro zone via twice-yearly meetings of leaders and the creation of a two-and-a-half-year presidency to steer this forum. [CNBC, earlier]
