Archive for August 2011

  • 29 Aug 2011 at 8:28 AM

Opening Bell: 08.29.11

By Dealbreaker

Irene Leaves Trail Of Damage Far Inland (WSJ)
The huge size and slow journey of the storm along 1,100 miles of U.S. coastline left an extraordinarily broad impact. At least 24 deaths were attributed to Irene as devastation ranged from North Carolina to Vermont. Toppled trees, fallen debris and flooding caused hundreds of roads to be closed over the weekend. Up and down the coast, some 2.4 million people evacuated…Between 15 and 20 heating-oil trucks were pushed into the Ramapo River after a 9-inch torrent of rain fell near Tuxedo Park, N.Y., and the stream overflowed. “An environmental disaster is floating down the river,” said Mayor Tom Wilson in an interview. “There’s fuel spilling into the river. … It’s everywhere.”

Exchanges To Shed Sandbags As Irene Passes (Bloomberg)
Sandbags remained piled around the entrance to Goldman Sachs’s headquarters at 200 West St. yesterday, with security guards standing by. The firm’s buildings are “functioning normally” and will be open, Stephen Cohen, a Goldman Sachs spokesman, said in a phone interview.

Economist: Reconstruction Won’t Offset Irene Damage (CNBC)
“The first visible impact will be on jobless claims, which will likely rise next week, some effect is possible this week, but history suggests people fleeing major storms do not stop to file a claim for unemployment before they leave,” he wrote.

Central Bankers Worry Economy Still In Peril (WSJ)
The angst was underscored in a blunt speech by the International Monetary Fund’s new managing director, Christine Lagarde. “We risk seeing the fragile recovery derailed,” she said Saturday. Those risks have been aggravated, she said, by the public’s sense that policy makers’ response has been inadequate. “We are in a dangerous new phase,” the former French finance minister said.

German Finance Minister: World Facing ‘Lean’ 7 Years (Reuter)
“There might well be seven lean years ahead for the world economy,” German Finance Minister Wolfgang Schaeuble said, pointing to a “trade off between short term-pain and long-term gain”.

Shia LaBeouf melts down at Hollywood party, spits water on girlfriend, Marilyn Manson (NYDN)
“Shia picked up a water bottle and shot a mouthful of water all over his date’s legs,” says the eyewitness. “Then he put more water in his mouth and started spitting it all over his tablemates, including Marilyn Manson.” Although Manson tried to calm the actor down by offering him a fist bump, LaBeouf only grew more out of control. “All of a sudden, Shia started shouting at his date and getting visibly angry,” adds the eyewitness. He then decided it was time to leave and “lunged” through the very thick crowd. “They tried to hold him back, but he kept struggling through. “Shia had to climb over people and tear himself out of the grasp of various strangers who were trying to keep him from going crazy.” Once he broke free and bolted out the door, his panicked date chased after him. The two never returned. Continue reading »

  • 26 Aug 2011 at 6:33 PM

Write-Offs: 08.26.11

By Dealbreaker

$$$ “We can joke about this on Monday morning, but until then it’s a matter of life and death,” the mayor said at a news conference. (NYT)

$$$ Jackie Marino, a 25-year-old investment banker, hurried down Pearl Street with two yellow plastic grocery bags and what she described as “lots of wine.” (IBT)

$$$ Chris Christie: “Get the hell off the beach in Asbury Park and get out. It’s 4:30. You’ve maximized your tan.” (InOtherNews via Daily Intel) Continue reading »

  • 26 Aug 2011 at 5:55 PM

Nouriel Roubini Offers Natural Disaster Tips

By Bess Levin

  • 26 Aug 2011 at 5:46 PM

Goldman Sachs Gives Employees Permission To Break Out The Tassels And Chaps

By Bess Levin

The Firm has apparently told the staff they may “dress casually” on Monday, so long as they “exercise good judgment,” leaving things extremely open to interpretation. [via KevinRoose]

  • 26 Aug 2011 at 5:29 PM

Moving Off Gold Standard Responsible Not Only For Inflation, Deficits, Unemployment, But Also Fall Of Roman Empire

By Matt Levine

When I was at my last job, I tried occasionally to take a step back from deals and markets and get perspectives on the bigger picture. To that end, I once went to a talk given by the anthropological theorist David Graeber, who is perhaps best known for being fired from Yale just maybe because he was an anarchy activist who was occasionally arrested at protests. After this talk – about theories of value from a Maussian-Marxist perspective – Graeber took questions. The tone of the questions, which often began “when I was in grad school” and went on to cite Weber and Nietzsche, and the variety and topiary ambition of the questioners’ facial hair, led me to believe that I was probably the only investment banker in the room.

Graeber now seems to be courting a financial-industry audience, however, with a well reviewed new book out about the history of debt, and an interview with Naked Capitalism today. It’s a good read, both because Graeber loves to be provocative and because it has things to like for both Ron Paul voters and Paul Krugman readers.

For example, think that paper money will destroy America and QE3 would be treason? Graeber’s takes a long-term perspective. Really long-term:
Continue reading »

  • 26 Aug 2011 at 5:13 PM

Take Cover

By Bess Levin

On any given day, we have a lot of fun fucking around these parts. Like to keep it light. Mess with you. This weekend though, is serious, and we want you to treat it as such. Take the appropriate measures. Prepare accordingly. If your home is located in a high risk area, leave. We mean it- do not try and be a hero. Promise us you’ll go somewhere safe to wait out the storm. Don’t have anywhere to go? That’s a bull shit. Of course you do. Continue reading »

  • 26 Aug 2011 at 4:01 PM

The New York Stock Exchange Has A Message For Irene

By Bess Levin

She can blow a park bench through the windows of the New York Fed, flood all of downtown Manhattan and rustle the papers on Maria Bartiromo’s desk but come Monday morning? That bell is getting rung. Continue reading »

  • 26 Aug 2011 at 3:05 PM

Buffett Got A Better Deal On BofA Than We Thought

By Matt Levine

People seemed to like our post yesterday calculating a mumbo-jumbo implied equity price at which Warren Buffett invested in BAC. Particularly gratifying was that some smarter folks than us came within a few cents of my $5.28 guesstimate. You could certainly quibble with some of my assumptions – in particular Bronte Capital points out that BAC’s TARP warrants imply a higher long-dated vol than I arbitrarily threw into the model, while some of their prefs imply a higher pref discount rate than the 8.25% I used – but that’s why there’s a spreadsheet. Quibble away.

Others used different valuation methods to get different numbers, but everyone basically used the same general approach as I did. That approach is pretty intuitive: you value the preferred shares at some discount rate. Then you value the warrants based on Black-Scholes or whatever. Then you add those two numbers.

Turns out that’s wrong.
Continue reading »

  • 26 Aug 2011 at 2:42 PM

Smart People Planned For This Weekend’s Event Almost 20 Years Ago*

By Bess Levin

As you may have heard, we might be getting a little rain this weekend. Some people are approaching the threat of Irene with an appropriate level of seriousness. Others, like the those who live and work in Connecticut, have not, according to Governor Malloy, who has apparently been telling his people to get their asses in gear, lest he be forced to say “told ya so” JUST LIKE LAST TIME.

Malloy urged residents to take the storm seriously and begin making preparations now. “I hope people are listening better to me than they did about removing snow from their roofs,” he said.

While there are some people who should very much take Malloy seriously, others can listen to him just as much as they did when he told them to remove snow from their roofs. If you happen to work for RBS, for instance, you might want to stay out of the lobby this weekend, seen in the green area below, which a Category 1 Hurricane will flood. Burning the midnight oil at UBS, seen in white just across the road? While it may come as a shock, you’re good! Continue reading »

  • 26 Aug 2011 at 10:19 AM

Bernanke’s Got Good News: Looks Like We Didn’t Scar The Economy For Life

By Bess Levin

Mr. Bernanke said the U.S. recovery, now more than two-and-a-half years old, continues to be “modest.” He conceded the pace of growth has been slower than what the Fed expected. But he was more optimistic about the long run, saying the economy hasn’t been permanently scarred by the financial crisis. “Although important problems certainly exist, the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years,” the Fed chief told the gathering, which this year focuses on long-term growth prospects for the global economy. [WSJ]

  • 26 Aug 2011 at 9:34 AM

Lenny Dykstra’s Cleaning Staff Didn’t Know Their Gigs Required Giving The Boss Massages, Getting A Glimpse At His Most Valuable Player

By Bess Levin

Back in January, Lenny Dykstra was accused of sexually harassing his housekeeper, who claimed that LD forced her to “give him oral sex on Saturdays.” At the time, Dykstra scoffed at the allegations, telling a reporter that he was the victim of extortion and “If she was assaulted on Saturdays, I’m a ballerina dancer on Sundays.” Charges were never filed (prosecutors cited a lack of evidence), which Nails apparently took as a sign that this kind of interaction with your cleaning lady is not in fact frowned upon and continued spending his weekends dancing Swan Lake on Sundays after dropping trou in various maids’ faces on Saturdays. Continue reading »