Archive for December 2011

Write-Offs: 12.23.11

$$$ Muni Bonds: A Disaster That Wasn’t [WSJ]

$$$ The trader who is killing it at Cohen’s $14 billion SAC Capital Advisors this year is Gabriel Plotkin. The portfolio manager, who specializes in consumer products and the gaming and lodging industry, is one of the top producers this year at Cohen’s hedge fund, say several people familiar with the Stamford, Conn. hedge fund. Plotkin, who joined SAC Capital in late 2006 from North Sound Capital, is emerging as one of Cohen’s most reliable money men. [Reuters/Matthew Goldstein]

$$$ Owl Creek Falls 13% [Dealbook]

$$$ “Volkswagen AG’s BlackBerry-wielding employees now get a break at the end of the work day from the constant allure of the Research In Motion device’s blinking red light. Yielding to demands from its works council, Europe’s largest carmaker agreed to stop its e-mail server from routing messaging traffic to the smartphone 30 minutes after a shift and resume half an hour before the next day begins. The accord affects about 1,150 employees in Germany who use the device and are covered by collective labor agreements, the Wolfsburger Allgemeine Zeitung reported.” [Bloomberg]

$$$ Happy Festivus! [NYDN]

$$$ That’s it for us today. We hope everyone has a great break, celebrating the birth of Christ, airing your grievances at all the people you’ve got problems with, or however you’ll be spending your time. Very abbreviated scheduled next week starting Tuesday, with exceptions made for breaking news such as Lloyd announcing he’s retiring to start in a Broadway revival of West Side Story, the surprise appearance by a much-loved hedge fund manager playing Kris Kringle at your Christmas Eve party (and getting thrown out for snapping reminding him Santa drinks milk, not champagne), or Wilbur Falcone ringing in the New Year by hopping in his Bronco and leading the NYPD on a high-speed chase. Read more »

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  • 23 Dec 2011 at 2:00 PM

Dear SAC Capital Investors

Steve “Call him ‘Stevie’ and you’re a dead man” Cohen was reportedly up 8 percent after fees through the end of November. If anyone out there has been having a tough go of things this year and is looking for some guidance re: how he does it as we head into the last trading week of the 2011, don’t bother. It’s like saying to Pavarotti, “Teach me to sing like you.” Thank you and good night. [Reuters]

  • 23 Dec 2011 at 11:58 AM

When Do-It-Yourself Bonuses Backfire

Helen Kapoutsos, a 28-year-old West Hartford woman, was arraigned Thursday, charged with embezzling nearly $170,000 worth of checks and credit cards charges used to pay for a lavish lifestyle of shopping sprees, romantic getaways to Nantucket and a trip to Aspen, CO…Kapoutsos’ employer went to New Canaan police in September to complain that his personal assistant had written scores of checks and made many more credit card purchases without his permission, her arrest warrant affidavit states. Kapoutsos said her employer met her at a Manhattan strip club and hired her in April 2010. He would pay her $2,600 per month for 20 hours of work per week. Her job was to purchase day-to-day household requirements as well as taking care of the family and other daily tasks associated with being an assistant, the affidavit said. When pressed by police about the huge amounts of checks — up to $4,200 — made payable to her, Kapoutsos said she would write herself checks for her “services and time,” with the permission of her employer, the affidavit said…In April 2011, she paid herself $16,000 for “extra time,” the affidavit said. Kapoutsos said she would have sex regularly with her employer and his fiancee. When police brought the sexual allegation to the employer’s attention, the man admitted he and his fiancee did have sex with her a handful of times, but many fewer than Kapoutsos alleged. He said he did not tell police of the sex because he was embarrassed, but he was willing to go forward with the complaint even if further embarrassment would result. [Stamford Advocate]

  • 23 Dec 2011 at 10:53 AM

Phil Falcone Isn’t Finished Here

Let’s role-play for a second. You’re a well-known hedge fund manager who’s had a really, really shitty 18 months. Your investors hate you, because of petty little stuff like 1) you loaned yourself $113 million from a gated fund to pay personal taxes 2) you tied up a good chunk of their money in a walkie-talkie passion project 3) you will only let them leave if they can find a buyer for said passion project on the black market and you both know that’s not happening any time soon. It appears as though you’re somewhat past due on paying property taxes. The deal you’ve bet pretty much everything on may be fucked. Your singing and dancing pig, the one person you thought you could count on and who, even if you lost everything, would still make you feel like a rich man, has started not just considering her options but unapologetically flaunting them in your face. (You didn’t need Wilbur to have her date– a potential new benefactor and the third this week– pick her up just as you were getting home to see them leave and you really could have dealt without hearing him ask “Who’s that guy?” and hearing her cruelly laugh and answer, “Oh him? He’s nobody”?). So when the SEC, which has been investigating what you’ve been up to, offers you a deal to settle by agreeing to be banned from the securities industry, what do you do? Do you say, “You know what, that actually sounds great,” because honestly, what are you holding onto anymore? This way, you can start fresh. Give the double-finger fuck you to everyone and take off? Maybe that’s what you do if you’re you but in this scenario you’re Phil Falcone and you’re not going anywhere. Throw in the towel, his ass. Read more »

Opening Bell: 12.23.11

S&P Report on Euro Zone Ratings Seen Next Month (Reuters)
Standard & Poor’s is expected to release its eagerly awaited verdict on debt ratings for 15 euro zone countries in January, two independent European government sources told Reuters. “We have got an informal signal from Standard & Poor’s that they will come only in January,” said one source who declined to be named because exchanges with the rating agency are confidential. “In conversations we have had, they have let this be known if you read between the lines,” he added.

Italy To Kick The Cash Habit As Monti Cracks Down (Bloomberg)
Floriana d’Andrea, a Naples musician, carries rolls of euro notes when she buys instruments and audio gear, a practice she’ll have to change as Italy sets new limits on cash payments in a bid to curb tax evasion. “I bought some expensive sound equipment and the shop owner jacked up the price when I asked for a receipt,” said d’Andrea, 41, who paid 1,600 euros ($2,093) in cash in the transaction. She has a credit card, but rarely uses it, she said. Prime Minister Mario Monti, in office just over a month, wants landlords, plumbers, electricians and small businesses to stop conducting large transactions in cash, which critics say helps them evade taxes. The government on Dec. 4 reduced the maximum allowed cash payment to 1,000 euros from 2,500 euros. “If they force us to use credit cards, prices will go up,” said d’Andrea, noting that many retailers offer discounts to customers who pay in cash and don’t demand a receipt, in effect splitting with them the savings from evading the country’s 21 percent sales tax. She may curtail future purchases if she’s unable to use cash, d’Andrea said.

House, Senate Clear Payroll Tax Accord (WSJ)
The House and Senate on Friday approved a two-month extension of the payroll-tax cut, averting an increase that would have left workers with less take-home pay next year. Passage came after a nearly weeklong impasse that ended when House Speaker John Boehner (R, Ohio) bowed to increasing pressure from within his own party and agreed to the short-term extension. The $33 billion package also provides extended federal unemployment benefits for two months, avoids a cut in payments to doctors who treat Medicare patients and compels the Obama administration to act within 60 days on a permit for TransCanada Corp.’s proposed Keystone XL pipeline expansion. The deal, which forestalls a Jan. 1 tax increase on 160 million workers, represents a retreat for the House GOP, which had been at odds with Senate Republicans and party elders who feared a backlash in the 2012 elections if the tax break was allowed to expire. The agreement is essentially the same package negotiated by the Democratic-controlled Senate that Mr. Boehner’s House rejected earlier this week.

Fed’s Once Secret Data Now Release To The Public (Bloomberg)
Bloomberg News today released spreadsheets showing daily borrowing totals for 407 banks and companies that tapped Federal Reserve emergency programs during the 2007 to 2009 financial crisis. It’s the first time such data have been publicly available in this form. To download a zip file of the spreadsheets, go to For an explanation of the files, see the one labeled “1a Fed Data Roadmap.”

AIG’s Benmosche Extends His Stay (WSJ)
Mr. Benmosche said in an interview that he plans to run New York-based AIG beyond next year, his health permitting. The 67-year-old, who was diagnosed with cancer in late 2010, previously indicated he planned to return to retirement sometime in 2012. “I’ve talked to the board and said that if I stay healthy—and I’m still hopeful—I would like to stay on for another year,” he said. “I want to stay active and energized, and having too much time on my hands is not healthy, I think.”

Pigeons Can Learn Higher Math, Study Finds (NYT)
By now, the intelligence of birds is well known. Alex the African gray parrot had great verbal skills. Scrub jays, which hide caches of seeds and other food, have remarkable memories. And New Caledonian crows make and use tools in ways that would put the average home plumber to shame. Pigeons, it turns out, are no slouches either. It was known that they could count. But all sorts of animals, including bees, can count. Pigeons have now shown that they can learn abstract rules about numbers, an ability that until now had been demonstrated only in primates. In the 1990s scientists trained rhesus monkeys to look at groups of items on a screen and to rank them from the lowest number of items to the highest. They learned to rank groups of one, two and three items in various sizes and shapes. When tested, they were able to do the task even when unfamiliar numbers of things were introduced. In other words, having learned that two was more than one and three more than two, they could also figure out that five was more than two, or eight more than six. Read more »

Write-Offs: 12.22.11

$$$ House G.O.P. Leaders Reach Agreement on Payroll Tax [NYT]

$$$ Risk Is Out, and Goldman Sachs Cuts Ties With Brokers [WSJ]

$$$ Hungary Defends Economy After Ratings Downgrade [WSJ]

$$$ Lauren E. Weinberg, a 23-year-old ASU business student, told Sheriff’s deputies she survived in her car for nine days without cold weather gear and on nothing more than two candy bars. For drinking water, she used the sun to melt snow in bottles. [AZDS] Read more »

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  • 22 Dec 2011 at 5:29 PM

You Think You’ve Got Problems?

Yes, you might get fired next year. Yes, your only hope of not closing down 50% may be based on how charitable a fat guy and his reindeer are feeling. Yes, you might have career-hindering pores. But here’s a little reality check: you don’t know from problems. You want to talk about problems? About stress? About getting your face ripped off? Then talk to this guy. Read more »