Goldman Real-Estate Play Skirts Volcker Ban (WSJ)
The Volcker rule prohibits banks from owning more than 3% of a hedge fund or private-equity portfolio. So why did Goldman Sachs Group Inc. tell would-be investors that it would contribute up to 20% in a new fund that makes loans backed by office buildings, hotels, shopping centers and other properties? Because regulators excluded many real-estate loans from the tough restrictions on investment funds, allowing Wall Street firms to continue making concentrated bets—sometimes risky ones—with their own capital. Goldman has raised more than $1 billion for the new fund, according to people briefed on the matter. The fund aims to boost that total to $2 billion, and Goldman expects to invest “up to 20% of total equity commitments,” according to September marketing documents reviewed by The Wall Street Journal.
Banks Avoid Providing Bitcoin Services (WSJ)
Lenders are leery of dealing with virtual-currency companies because of concerns that the businesses could run afoul of anti-money-laundering laws or be involved in illegal activities, banking executives say. Regulators and central bankers around the world have raised similar concerns in recent months. The problem has grown so acute that some owners of fledgling virtual-currency businesses are trying to elude bank scrutiny by avoiding the words “bitcoin” or “bit” in their names, according to entrepreneurs and investors who actively track the industry. Patrick Murck, general counsel for the Bitcoin Foundation, a trade group, has been raising the issue in meetings with regulators and bank executives. “This is definitely causing a bottleneck in the industry,” he said in an interview. “The ability of companies to get bank accounts is necessary so that they can take the next step in building out the core bitcoin infrastructure.”
For a Hedge Fund Pioneer, a Tiger Fund Burning Bright (Dealbook)
Julian Robertson, the billionaire investor and an early pioneer of the hedge fund industry, is again proving to be a top picker of new talent. His $450 million Tiger Accelerator Fund, which invests in six hedge funds that Mr. Robertson personally has invested in, is up 22.6 percent net of fees as of Dec. 15, according to a person briefed on the matter. By comparison, the broadest hedge fund industry index is up just about 9 percent for the year…The six hedge funds that the Tiger Accelerator Fund’s performance tracks are Tiger Veda Globa, Cascabel, Long Oar Global, Tiger Eye, Tiger Ratan and Teewinot. The Accelerator fund’s $450 million investment is on top of the roughly $230 million Mr. Robertson committed of his own money to those funds.
Kanye Vuitton Jibe Shows Even Rich Balk at Luxury Prices (Bloomberg)
Kim Kardashian might as well be naughty this Christmas, because even if she’s nice her fiancé is unlikely to shell out for a Louis Vuitton handbag…Kanye West, who gave reality TV star Kardashian a diamond ring worth millions to celebrate their engagement, told a U.S. radio show recently that Vuitton’s prices are “just too extreme.” The criticism by West, who has collaborated with the Paris-based label on products including a range of $1,000 sneakers, is a signal some luxury companies may be charging too much, turning off even the wealthiest clients.
Russia Crisis Haunts Deutsche Bank’s Smith Seeing China Bust (Bloomberg)
When the Deutsche Bank AG equity strategist looks at the country, he says he detects some of the same signs of a financial meltdown that led him to predict Russia’s 1998 stock market crash months in advance. China’s expansion is being fueled by soaring corporate borrowing, a high-risk model that needs to be replaced by the kind of free-market measures and budget cuts that fed Russia’s growth in the aftermath of the country’s default and subsequent 44 percent monthly tumble in the Micex Index (INDEXCF), Smith said. “There is potential for a debt trap in industrial companies which can trigger an economy-wide financial crisis as early as next year,” Smith said in an interview from London on Dec. 12, a day after he issued a report predicting China’s slowdown will lead to a 10 percent decline in emerging-market stocks next year. “If I am wrong on China, I am wrong on everything.”
Wife rats out hubby’s illegal $600K Super Bowl pools (NYP)
A wife furious with her football-obsessed husband dropped a dime on a Staten Island gin mill — sparking a rare raid that shut down $600,000 in Super Bowl pools last week. “How can the SLA allow a $1 million illegal football pool at Talk of the Town?” the angry spouse wrote the State Liquor Authority on Nov. 13. “My husband spends all his money on these pools and not on our children.” The SLA put a rush investigation on the anonymous complaint. Last Sunday night, two investigators barged into the neighborhood saloon’s annual Christmas party. They flashed badges and snapped photos of pool boards taped to the mirrored bar back, witnesses told The Post. The Talk of the Town Tavern, at 24 Giffords Lane in the Great Kills section, was advised to shut down the gambling. SLA lawyers are now reviewing whether to slap the owner, Larry Burkert, 55, with violations carrying a typical fine of $2,500 for a first offense. The bar has told patrons the pools are dead and bettors will get refunds, sources said.
IMF will raise US economic growth forecast: Lagarde (Reuters)
The International Monetary Fund predicts the U.S. economy would expand at a faster pace next year, given positive economic data and some signs of compromise in Congress, the head of the Washington-based lender said on Sunday. IMF Managing Director Christine Lagarde also praised the U.S. Federal Reserve’s communication of its decision last week to start scaling back its massive monetary stimulus. “Growth is picking up,” Lagarde said on NBC’s “Meet the Press.” “And unemployment is going down. So all of that gives us a much stronger outlook for 2014, which brings us to raising our forecast.”
Guilty SAC trader’s pal after conviction: ‘ooooohhh f–k’ (NYP)
Convicted SAC trader Michael Steinberg had a real pal in former hedge fund exec Andy Heller during his four-week trial, which ended Wednesday. Heller, whose brother Sandy is an art consultant for SAC founder Steve Cohen, attended the downtown Manhattan courthouse proceedings regularly. And when Steinberg was convicted, Heller, 41, the former COO of Exis Capital, could be seen throwing his head back and moaning, “ooooohhh f–ck,” sources told On The Money.
Christmas Eve scramble on for LightSquared (NYP)
The tug-of-war over wireless start-up LightSquared continues to rage into the holidays. A group led by private-equity shop Fortress is seeking to raise $2 billion in debt to buy the Reston, Va., start-up out of bankruptcy, sources told The Post. Dish Network Chairman Charlie Ergen, meanwhile, pressed a bankruptcy judge this week to move on his competing $2.2 billion offer.
Hedge funds lose out to equities, again (Reuters)
For hedge funds that made money this year there was only one strategy that really mattered – latching onto the stockmarket rally. For everyone else 2013 proved another tough year as big-name funds as varied as global macro, commodity and computer-driven funds struggled to make money, eating further into the track record of these one-time ‘masters of the universe.’ So far this year the average hedge fund is up 8.2 percent – their best year in three but lower than a near 21 percent rise in the MSCI World Index .MIWD00000PUS for stocks.
Wienermobile serves as Cinderella’s carriage at wedding (QCT)
It wasn’t quite a sparkling carriage created by a fairy godmother out of a pumpkin and pulled by four white steeds. But newlyweds Erin Lounsberry and Jason Platt would not have been happy with anything less than the carriage for which they have been lobbying since September to carry them from their wedding at St. Paul Lutheran Church in Davenport to their reception at Black Hawk State Historic Site in Rock Island. Yes, it was Oscar Mayer’s Wienermobile, decked out with a sign on the back that said, “Just Linked,” and pulling a chain of empty ketchup and mustard bottles instead of the traditional tin cans. Lounsberry has a bit of an obsession with the red and yellow Wienermobile. Platt said he was aware of the obsession. “I’ve known her 17 years and I’ve seen her obsession,” he said.
Programming Note: We’re on an abbreviated, vacation-esque schedule. Opening/closing wraps and brief sprinkles of moral support should the urge to reach out and touch you strike us (or Goldman Sachs releases a holiday card featuring Lloyd as a naughty elf).