This is according to one of his best buds. Continue reading »
Archive for September 2011
Apparently selling buggy whips paper for newspapers, magazines and coupons is not as profitable as – wait, who thought it was profitable? Cerberus? Sadly, that did not work out for them:
NewPage Corp., the largest North American maker of coated papers, filed for bankruptcy six years after being bought by Cerberus Capital Management LP.
NewPage had $3.4 billion in assets and $4.2 billion in debt as of June 30, according to today’s Chapter 11 filing in Wilmington, Delaware. The Miamisburg, Ohio-based company was bought by New York-based Cerberus for $2.3 billion in January 2005, and issued $900 million in junk bonds to fund the purchase. It has been unprofitable since 2006.
A 2005-vintage leveraged buyout company crushed by an unsustainable debt load and operational failure is a good excuse to mention a neat paper posted today on Harvard Law School’s Forum on Corporate Governance and Financial Regulation. The authors, three UT-Austin business professors, use tax return data to examine what happens to 1995-2007 vintage U.S. LBO targets. And they are pretty confident that they can dismiss many of the traditional explanations for how private equity firms make money – both the flattering and the unflattering ones. From the paper: Continue reading »
There’s A Million Bucks With Your Name On It If You Can Beat The ‘Black Widow Of Eating Contests’ At Her Own Game
By Bess Levin
Perhaps you’ve competed in on the job eating challenges before, maybe even successfully. A few Double Downs here, a couple of vending machine items there. Probably felt pretty good about yourself, too. “I can shovel food down my mouth like a pro,” you might have said to a colleague who was equally impressed by your feats of gastrointestinal fortitude, right? WRONG. You have zero reason to be cocky about your so-called binge-eating abilities, according to Sonya Thomas, AKA the Black Widow. Continue reading »
As we mentioned a while back, part of my training as a new Dealbreaker editor involves getting a CFA charter so that I can use past returns to guarantee future results. To that end, I’ve signed up for the December Level I exam. Thanks for all of your helpful advice on studying, by the way – I didn’t get to read all of them, but I’ll just go ahead and assume that the overall gist was “read every hundredth page of the books, guess C when in doubt, and drink heavily before, during and after the exam.”
Nonetheless I did get the books last week, so I opened them up to see what I’m getting myself into. Study Session 1 is ethics. Coming from a job on Wall Street, this was all new to me. I was particularly interested to see the CFA’s a refreshingly straightforward fiduciary standard in its code of ethics:
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Did you know it takes 1,000 people to staff 6 Applebee’s? Continue reading »
Having said that, he’s still boss YTD. PJ is nobody’s bitch. Remember that. Continue reading »
Dick Bové Looks Forward To Getting Back In The Ring With Sallie Krawcheck, Estimates Bank Of America Will Lay Off 30,000 Employees
By Bess Levin
Earlier this morning, Rochdale analyst Dick Bové stopped by CNBC to chat about what’s been a’ poppin’ at Bank of America. First off, that report a few weeks ago about how the bank will be relieving 10,000 employees of their duties? According to Bové, that’s just the start. “You’re likely to see 30,000 people fired at Bank of America in the next 24 months,” he told the Squawk Box gang. Why the need for so many cuts? “The bank has made a policy decision to shift emphasis from the consumer bank to the commercial bank, because the regulations are more onerous on the consumer side, that’s why.” And what of yesterday’s unceremonious Krawcheck canning? Dick is sorry for his gal-pal but sees the firing as an opportunity from which they both stand to benefit. Continue reading »
George Soros: European Crisis Will Make Dick Fuld’s Recurring Nightmare Look Like Child’s Play
By Bess Levin
“This crisis has the potential to be a lot worse than Lehman Brothers,” said George Soros, the hedge fund investor, citing the lack of an authoritative pan-European body to handle a banking crisis of this severity. “That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.” [NYT]
German Court Upholds Bailouts (WSJ)
Germany’s Federal Constitutional Court on Wednesday ruled that the euro-zone’s 2010 bailout for Greece and subsequent aid granted through the currency bloc’s rescue fund is legal, eliminating a major hurdle to the sovereign-debt crisis response that’s been closely watched by financial markets. The constitutional court in Karlsruhe also ruled that Germany’s Parliament should have more say in major future euro-zone bailouts, but these would only need approval from the parliament’s budget committee.
S&P Met With Bond Firms (WSJ)
S&P officials visited large bond firms including Allianz SE’s Pacific Investment Management Co., Los Angeles-based TCW Group Inc., Legg Mason Inc.’s Western Asset Management and New York asset-management giant BlackRock Inc., according to people who either attended the meetings or were briefed on them afterward. Some of these investors say they came away with a stronger sense the nation’s debt rating would be cut. At the meeting with Western Asset Management on July 20, S&P officials noted that “70 to 75% of the countries that are put on watchlist for downgrade, get downgraded,” said Stephen Walsh, Western Asset’s chief investment officer, who was briefed on the gathering. He said Western Asset officials “came out unambiguous that the odds were much higher than 50-50.” The view at the firm, Mr. Walsh said: “Wow, that was a sobering meeting.”
Obama Said to Seek $300B Jobs Package (Bloomberg)
The main components of Obama’s jobs plan, though not its scale, have been largely telegraphed by the administration. For weeks, people familiar with deliberations have said the White House is considering tax incentives, infrastructure and assistance to local governments. Obama has stressed construction and tax cuts in recent public speeches. Obama has pressed Congress throughout the year to renew the payroll tax holiday along with extended unemployment benefits, which also expire Dec. 31. Backing for a reduction in the employer contribution to the payroll tax has been under consideration since at least June.
Greek Debt Swap Take-Up at 75 Percent: Report (CNBC)
Private sector participation in a Greek debt swap has so far reached the 75-percent mark, far below a 90 percent target, newspaper Imerisia reported on Wednesday without naming its sources.
Bartz Fired as Yahoo CEO Amid Plans for Strategic Review (BW)
Under Bartz, 63, who took over as CEO in January 2009, Yahoo has frustrated investors and failed to keep Google Inc. and Facebook Inc. from siphoning off Internet users and advertising revenue. The management change and strategy overhaul show the board is listening to shareholders, said Ken Sena, analyst at New York-based Evercore Partners. … “I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board,” Bartz said in a memo sent to staff and obtained by Bloomberg News.
Treasuries, TIPS, and Gold (Wonkish) (Paul Krugman)
“(Yes, it’s 4:30 AM where I am. I found myself wide awake, thinking about gold prices. You got a problem with that?)”
Suspected bank robber who called himself ‘Willie Sutton Jr.’ on Facebook busted by FBI (NYDN)
Hippolite offers a glimpse of a motive on his Facebook page which, if true, would hardly earn him a spot in the pantheon of prolific bank robbers. “What If We All Got Fed Up With This Recession And Started Running Inside Every F—— Bank T0 Give Us The Money That Belongs To Us???” he wrote on July 29, according to an affidavit unsealed Tuesday in Brooklyn Federal Court.
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$$$ Franc Plunges Most Ever Versus Euro as Central Bank Draws Line (Bloomberg)
$$$ Snoop Dogg nominates himself for Yahoo CEO following Carol Bartz’s firing over the phone (Twitter via Heidi Moore, Reuters)
$$$ Former Goldman Partner: Break Up Goldman (NetNet)
$$$ “It’s a real blessing to have friends like this,” said Chris Solarz, a 33-year-old hedge fund analyst (and endurance athlete who also holds records for navigating the subway, climbing and marathon running), of the pals who helped him and his wife set the Guinness World record for “Most Pubs Visited in 24 Hours by a Team” to commemorate their 3rd anniversary. (NYDN)
$$$ Ex-Citigroup exec pleads guilty to embezzling $22M
$$$ JPMorgan explains the Euro crisis with Legos (Felix Salmon)
$$$ Breaking: Bernie Madoff Told The Truth About Something (Dealbook, earlier) Continue reading »
