October performance. Continue reading »
Archive for November 2011
They see your firing and raise you a $25 million lawsuit. Continue reading »
As you may have heard, when the housing market collapsed, California was hit pretty, pretty, pretty bad. Particularly screwed was the town of Merced, which is third only to Las Vegas and Vallejo, CA in “metropolitan-area foreclosures,” where “builders were [once] coming into the area by the bulkload” and are now desperate to put warm bodies that can pay something, anything in the hundreds of empty houses. It’s obviously a very depressing situation, unless you happen to be a student attending school at the University of California-Merced, in which case, ka-motherfucking-ching. According to the Times, UC-M undergrads, whose school enrolls 5,200 but only has enough on-campus housing for 1,600, are moving into the nearby McMansions en-masse, creating a win-win for all.
The finances of subdivision life are compelling: the university estimates yearly on-campus room and board at $13,720 a year, compared with roughly $7,000 off-campus. Sprawl rats sharing a McMansion — with each getting a bedroom and often a private bath — pay $200 to $350 a month each, depending on the amenities…students willing to share houses have been “a blessing,” said Ellie Wooten, a former mayor of Merced and a real estate broker. Five students paying $200 a month each trump families who cannot afford more than $800 a month.
And for less than $100 extra a month, you can score yourself an even sweeter set up, new friends and the opportunity to have a major news outlet take gratuitous* pictures of you in the bath** where it appears as though you’re about to be electrocuted.
Heather Alarab, a junior at the University of California, Merced, and Jill Foster, a freshman, know that their sudden popularity has little to do with their sparkling personalities, intelligence or athletic prowess. “Hey, what are you doing?” throngs of friends perpetually text. “Hot tub today?”…Gurbir Dhillon, a senior majoring in molecular cell biology, pays $70 more than his four housemates each month for the privilege of having what they enviously call “the penthouse suite” — a princely boudoir with a whirlpool tub worthy of Caesars Palace and a huge walk-in closet, which Mr. Dhillon has filled with baseball caps and T-shirts…Jaron Brandon, a sophomore and a senator in the student government, does his homework in the Jacuzzi in his six-bedroom house, on a waterproof countertop that he rigged over the tub.
There are, of course, a few minor downsides to McMansion life, like the hobos (“Lance Eber, the crime analyst for the Merced Police Department, said vacant houses were frequent targets of theft, most recently of copper wiring. They also attract squatters, who sometimes encamp beneath covered patios, he said”), vying for parking spots (“one parks on the street, two park in the garage and two in the driveway. Whoever is getting up for an 8 a.m. class parks last”), yard work (“after an unsuccessful attempt at tending the yard with a hand mower, they now pay $50 a month to a gardener”), and the neighbors, who are having a hard time swallowing the fact that they’re living alongside kids when they were banking on stay-at-home moms of loose morals. Continue reading »
Downtown residents and business owners are organizing a protest of the protest after two months of Lower Manhattan being occupied by the Wall Street demonstration. Angry over all-day drumming, people urinating and defecating on the streets and verbal attacks from protesters, organizers say they will rally at City Hall Monday to send officials a message. [NBC, NYT]
Buffett Buys Into IBM (WSJ)
Berkshire Hathaway Inc. took a $10.7 billion stake in International Business Machines Corp. this year, a major shift for the billionaire investor, who has famously avoided technology stocks. Mr. Buffett said in an interview Monday on CNBC television that Berkshire has purchased 64 million shares, or 5.4% of the outstanding stock, beginning in March and building the stake throughout the year. Mr. Buffett said executives at IBM were unaware of the purchases, and that he’d never spoken to the company’s chif executive officer, Sam Palmisano. “They’ve done an incredible job” in laying out a road map for the future, Mr. Buffett said in the interview.
Merkel: Europe could be in worst hour since WWII (Reuters)
“Europe is in one of its toughest, perhaps the toughest hour since World War Two,” Merkel told her conservative party in Leipzig, saying she feared Europe would fail if the euro failed and vowing to do anything to stop this from happening. But in a one-hour address to the Christian Democrats (CDU), Merkel offered no new ideas for resolving the crisis that has forced bailouts of Greece, Ireland and Portugal, and has raised fears about the survival of the 17-state currency zone.
I’ll Be Back, Silvio Berlusconi Warns Europe (The Australian)
Berlusconi has warned that he is not yet finished as a force in Italian politics, insisting that the “technocratic” government of new Prime Minister Mario Monti would be at the mercy of Berlusconi’s supporters in parliament. Stung by the venom and rejoicing on the streets of Rome that greeted his resignation at the weekend, the 75-year-old billionaire told a hard-right group of his supporters that “I hope to resume with you the path of government”.
Obama: ‘Enough’s Enough’ on Undervalued Yuan (Bloomberg)
President Barack Obama kept up his pressure on China’s foreign-exhange policy and trade practices, saying “enough’s enough” on what the U.S. views as a too-slow appreciation of the yuan. While there’s been a “slight improvement,” China’s exporters “like the system the way it is” and are resistant to any moves to loosen the reins on the yuan, Obama said. “Changes are difficult for them politically, I get it,” Obama said at a news conference concluding a summit with Asia- Pacific leaders in Hawaii yesterday. “But the United States and other countries, I think understandably, feel that enough’s enough.”
MF Global clients cry foul over JPMorgan tactics in bankruptcy recovery (NYP)
Smaller customers of MF Global believe bank giant JPMorgan Chase, run by CEO Jamie Dimon, is angling to cut ahead of them in MF’s long line of creditors. Some MF clients are planning to file a motion in Manhattan bankruptcy court today, led by James Koutoulas, chief executive of a Chicago commodities trading firm, in a bid to boost their chances of recovery from the eighth-largest bankruptcy in US history. At issue is a lien and other protections given to JPMorgan, MF’s largest lender, in exchange for an $8 million loan the bank gave to MF on its first day of bankruptcy…In an interview, Koutoulas called the loan “a farce” and “a cheap ploy for them to jump the line.”
Corzine Aide In Spotlight (WSJ)
Even before Jon S. Corzine had lured Bradley Abelow in September 2010 to serve as his top deputy at MF Global Holdings Ltd., the firm’s chief executive was already saving key decisions for his trusted aide. “Jon would even say, ‘Wait until Brad gets here,’ ” said Peter Forlenza, who served as MF Global’s global head of equities until last week. “It was almost like there was a messiah coming, and he was going to clean everything up.”…With Mr. Corzine’s Nov. 4 resignation, the spotlight has shifted to Mr. Abelow, and not just because he is the senior-most executive left at the firm. Mr. Abelow, as MF Global’s operating chief, had direct oversight of the firm’s risk management, technology systems, human resources and client services divisions. Some of these operations are now drawing scrutiny for failing to rein in the trading risks that helped tip the firm into bankruptcy and for allegedly misplacing customer funds. Several people who have spoken to Mr. Abelow recently said he is frustrated with MF Global’s bankruptcy and angry at the former boss who brought him to the firm. He has volunteered to slash his annual salary to $60,000, down from the $1.5 million he was slated to earn before the bankruptcy, a person said. “Brad was the voice of reason,” Mr. Forlenza said. “The frustration was we couldn’t get things done quicker.” Continue reading »
$$$ Euro Debate: Goldman Says Buy, Morgan Stanley Says Sell [Bloomberg]
$$$ Big Money Funds Pull $8B From Deutsche Bank [Bloomberg]
$$$ What Hedge Funds Can Teach College Students
$$$ Congress Members Took Part in Insider Trading: Abramoff [CNBC]
$$$ ‘Wall Street Wives’ Says It Has Landed Kenneth Starr’s Wife [Dealbook, earlier] Continue reading »
Here’s a thing that you probably know: acquirers pay a premium to do acquisitions. That tends to be why the target sells, with some exceptions. So it is no surprise that Kinder Morgan is paying a premium to buy El Paso. And, when they announced the merger last month, they talked up that premium pretty good:
The consideration to be received by the EP shareholders is valued at $26.87 per EP share based on KMI’s closing price as of Oct. 14, 2011, representing a 47 percent premium to the 20-day average closing price of EP common shares and a 37 percent premium over the closing price of EP common shares on Oct. 14, 2011.
This was not enough for some people, who are suing because EP isn’t getting paid enough – and also because of little things like how Goldman advised EP on the merger while also being a regular advisor to Kinder Morgan and owning 19% of Kinder and being on its board and stuff like that.*
Fortunately Kinder and El Paso have a chance to clear all that up in the merger proxy that they filed yesterday afternoon. Others have noted some of the fun in the “Background” section, including lots of back-and-forth on price and tactics and one-liners like “On September 23, 2011, Weil delivered a draft merger agreement to Wachtell Lipton, and on September 24, 2011, Wachtell Lipton delivered a revised draft merger agreement to Weil,” which, I can tell you from experience, captures a whole lot of human suffering in a single sentence.
But let’s skip that and talk instead about another source of immense suffering, the financial opinions disclosure, which is distinguished by being 45 pages long.
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On account of recent events. Continue reading »
Charlie Gasparino Almost Got His Brains Blown Out For Breaking News During The Financial Crisis, But Not Literally
By Bess Levin
During the financial crisis, the markets were on edge. This was before the big firms blew up, I remember saying on the air, “Well, you’re going to get some commentary from teh ratings agencies.” The companies that were insuring all the big banks just didn’t have the money to insure them. So basically they all lost their triple-A ratings. I said that and the market moved 200 points. I remember walking into San Pietro, a restaurant in Manhattan where a lot of these guys had lunch and I saw Jack Welch, who came up to me and said, “Charlie, you’re doing great but watch this whole notion of moving the markets. Just watch it or you’ll get your brains blown out.” I said, “Literally?” He said, “No, but it’s a dangerous, dangerous thing.” [New Canaan-Darien Magazine]
The chorus began quietly at a recent strategy session inside Zuccotti Park, with a single cough from a security team member, a muffled hack between puffs on his cigarette. Then a colleague followed. Then another. Soon the discussion had devolved into a fit of wheezing, with one protester blowing his nose into the mulch between clusters of tents. “It’s called Zuccotti lung,” said Willie Carey, 28, a demonstrator from Chapel Hill, N.C. “It’s a real thing.” “Pretty much everything here is a good way to get sick,” said Salvatore Cipolla, 23, from Long Island. “It’ll definitely thin the herd.” [NYT via Counterparties]
Comment Of The Day: 11.11.11
By DealbreakerBandersnatch on MF Global Customer Funds Were Not Used In Connection With This Portrait: Continue reading »
Tags: Comment of the Day, vodka