We’ve been thinking more and more about what New York City might look like under Dick Parsons. We have no idea what his policy preferences are but looking over his work at Time Warner and some of our own DealBreaker reporting, we have a few guesses at how things might change.
• Increased M&A Activity: We’ll merge with Jersey City! They’ve already got half our finance jobs anyway.
• New City Crest: Replace our old stale one with the Parsons Family Crest.
• Ladies, ladies, ladies: Feel free to spend your time hanging around with whores!
• Free wireless cable and internet for everyone. (Okay. This last one is probably a stretch.)
John Carney
Posts by John Carney
So Pepsi named Indra Nooyi as it’s next CEO, succeeding former marine tough guy Steve Reinemund. She will be the fifth CEO in the company’s 41 year history. Everyone says she’s very smart, and smart for real—not just because they’re profiling her for being born in India and having that “brainy chick” look. She’s also supposedly good with people.
Pepsi’s done well recently by branching out into the wider junk snack food market, decreasing its dependence of sales of sugary-bubbly drinks for profits. Some folks were surprised at the timing of the announcement. Reinemund’s only been at the helm since 2000 and at age 57 is only seven years Nooyi’s senior. He’s generally considered to have had done an excellent job running the company. Word is that Pepsi was worried they’d lose Nooyi to a competitor if she wasn’t promoted quickly.
PepsiCo names Nooyi CEO, Reinemund to retire in May [Reuters]
A few years ago we almost supported Mike Bloomberg for mayor because greek shipping heir and poison penned essayist Taki persuaded us that New York City needed to be led by a rich man who understood business. We’re still not sure Taki was right in saying Bloomberg deserved our backing. There have been too many betrayals and too much bungled. But he may be right that it is New York’s destiny to be led by such men, and that they tend to be marginally better than the usual alternative—career political hacks who have never spent a day weaned from the tits of tax-payers.
All this is by way of saying that we suppose the entrance of Time Warner’s Dick Parson’s into the race for New York City mayor, which New York magazine says is almost certain, is not entirely unwelcome. Word is that he’ll run as a liberal Republican—along the lines of Bloomberg and what we used to call the “Rockefeller Republicans.”
Is Parsons the New Bloomberg? [New York Magazine]
Women live longer than men and it’s not fair. It may even be unholy. Why would God make men in his own image only to kill us off sooner than something he later made from our friggin’ ribcage? Fortunately, former NYSE honcho Dick Grasso found a way of compensating himself for the inequities of lifespans—when calculating Grasso’s pension payout, the NYSE used a ratio of 50 percent male and 50 percent female life expectancies. This gender bending effectively increased Grasso’s actuarial life expectancy a few years, upping the amount of his compensation by perhaps as much a a few million dollars.
The Sex “Change” at Stock Exchange [New York Post via Under The Counter]
Actually, the critic Frederick Turner anoints William Shakespeare as the poet of capitalism, not just high-yield bonds and interest. It’s worth reading in its entirety but we especially enjoyed this passage:
What they ignored is that Shakespeare did not disapprove, as his critics did, of the taking of interest. In fact, he evidently regarded it as the foundation of Venetian prosperity, and he has Antonio, one of his most positive characters, invest money at interest to support the newlyweds Lorenzo and Jessica, one of whom is Jewish. Most striking of all, Shylock is punished at the end for not taking the exorbitant interest he has been offered on his bond, but insisting on the worthless pledge of the pound of flesh. In other words, Shakespeare’s anti-business critics are completely blind to the implication that Shakespeare is the very opposite of the economic anti-Semite, that he regards the spread of “use” or interest as a creative and valuable, if not very exalted, form of real progress. Shakespeare himself was a large investor in bonds and other interest-bearing securities. His famous words “neither a borrower nor a lender be” are put in the mouth of the “wretched, rash, intruding fool” Polonius, the time-pleasing state bureaucrat in Hamlet who so richly deserves his rather nasty fate, stabbed while spying on a private conversation.
The Merchant of Avon [Reason magazine via Two Blowhards]
The John Mack led rebuilding of Morgan Stanley continues. Last week it made significant moves to rebuild its financial institutions group, hiring a pair of bankers away from Credit Suisse and one from Merrill. Today comes the announcement that it has hired two asset managers from New York Life—Kathy O’Connor and Jeff Sanders—to bolster its asset management business. The pair managed around $3 billion in assets for New York Life, and previously worked together at Towneley Capital Management.
This morning’s Palm Beach Post carries a lengthy article on Jeffrey Epstein. It mostly tracks what you’ve already read here or elsewhere but is worth reading if you haven’t followed all the details. Among the highlights:
Background.
• Jeffrey Epstein’s early career at Dalton and Bear Stearns.
• His earlier disputes with former business partners and Citigroup.
• Rumors that he left Bear Stearns under an SEC inquiry cloud.
• Also rumored to have been a spook of some sort.
• Mentored by Steven Hoffenberg “now serving a prison term after ‘bilking investors out of more than $450 million in one of the largest Ponzi schemes in American history.’
• His real estate: private island, huge townhouse in Manhattan, gigantic in new Mexico and a alleged teenage petting zoo mansion in Palm Beach.
• Powerful friends: top scientists, former Harvard president Larry Summers, Daily News publisher Mort Zuckerman and Bill Clinton.
• Thought to have 15 clients but only one is known—the Wexner family, founders of The Limited clothing stores.
Women.
• Long linked to media mogul Robert Maxwell’s daughter Ghislaine Maxwell.
• Said to have also dated a former Miss Sweden and a Romanian model.
The Case.
• Investigation began after a mother heard her daughter discussing trips to Epstein’s place and contacted police.
• Private investigators working for Epstein contacted witnesses during the investigation.
• Disputes arose between prosecutors and police.
• An early plea bargain which would have kept Epstein out of jail fell apart.
• Alan Dershowitz flew to Palm Beach to paint the girls making the allegations against Epstein as lying, thieving, drug and alcohol abusing and unreliable.
• The “Heidi Fleiss” of Palm Beach is alleged to have brought six girls between ages 14 and 18 to Epstein’s house for massages.
While admitting that Epstein had girls over to administer massages, Epstein’s camp maintains he is innocent of any criminal wrong-doing. One of his lawyers even insists Epstein will emerge from the case with his reputation untarnished.
Jeffrey Epstein craved big homes, elite friends – and, investigators say, underage girls [Palm Beach Post]
Because you never really can have too much money, you’ll be glad to hear that Wall Street bonuses are headed upward. Johnson Associates, a compensation consulting firm, predicts an average increase of 15 percent this year. Investment bankers and equity traders are expected to see the biggest gains, with bond traders coming in behind them and brokers and asset managers brining up the rear.
Wall Street Bonuses to Rise 15% This Year, Pay Consultant Says [Bloomberg]
That’s what the new blog, Capital Chronicles, says.
The bomb, the threat of US anti-gaming legislation, appears more Vanuatu than Iran-like. Not only is there too little legislative time in the Senate to read and pass the proposed bill but said bill was already being watered down. This speaks to the question is a huge gambling nation like the United States really going to put a moral “anti-scourge” law on the books?
So maybe new laws might not make it on the books. But if you run one of these companies, you might still want to avoid any layovers in the US.
PartyGaming plc & US anti-gaming legislation [Capital Chronicle, no permalinks]
Crime/Fraud/Legal/Investigations/Inquiries:
KPMG blames accounting oligopoly on PWC [legal]
Philip Morris sues tiny, native American rival [legal]
FCC inquiry into XM Radio FM signals [inquiry]
Defense lawyer argues evidence is slight in Coke theft case [legal]
Cinematic aspects to Comverse backdating case [backdating]
Liberty mutual is the first insurance company to fight Spitzer [legal]
Apple wants hearing with NASDAQ regulators [legal]
Prosecutors want Skilling to pay back co-conspirator ken Lay’s gains [crime]
No jail for Wal-Mart fraudster [fraud]
M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Ventana Medical Systems + Vision Systems
CommScope+ Andrew
Alinta + Thames Water: ?
Cleveland Browns + Aston Villa: ?
Cisco + Nuova Systems
For Sale/ LBOs/ Going Private/ Auctions/ Offerings:
Alliance Atlantis Communications: Bidding
Two hedge funds call for sale of Ahold: For Sale?
Baugur to bid on House of Fraser: Bidding
Hedge fund shareholder in Signet rejects KKR bid: Bidding
Bain takes Applied Systems off hands of Vista Equity: LBO
IPOS stall in Q3: Offerings
UrAsia Energy goes public on London exchange: Offerings\
Euro hotels going public: Offerings
Southern National Bancorp: Offerings
State owned Telestra headed for privatization? Offerings
MEDecision IPO: Offerings
Health South considers selling some units: Offerings
Ford Motor CreditFor Sale
Money Raising:
Zennos raises $5M $
Motricity gets $15M $$
Miscellaneous:
VCs poured money into companies in Q2 2006: VCs
DE Shaw to offer traditional asset management: Hedge Funds
Slow exit by private equity shops: Private Equity
Lehman leading London electronic trading: LINK
Goldman fees lower: LINK
Bank of America closes in on Citigroup: LINK
Alright. It’s just about time to head out for what promises to be the best weekend ever. Or at least the best since sometime in mid-July, before we got hit by the Wrath-of-God heat wave. On tap: fishing, drinking beer at a picnic table, forgetting all about business and finance for a couple of days, crashing the party being thrown by Starbucks Chairman Howard Schultz and his wife Sheri where we plan to tell people we think Jane Goodall should have just left those friggin’ monkeys alone.
Till Monday!
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Posted in:
Warren Buffett
Warren Buffett Makes Money the Old Fashioned Way: Hypocrisy
By John Carney
We’re returning to all the classic DealBreaker themes today—Plotkin, Cuban, Ken Lay, horny traders—so might as well bring our old friend Warren Buffett back into the mix.
The occasion? Last Saturday Buffett’s Berkshire Hathaway announced giant first quarter earnings. And what’s wrong with that? We’ll get to that in a minute. But we just want to note how agile DealBreaker is—not only can we bash him for being charitable, we can bash Buffett for being profitable too. Moving along, here’s JerryBower on how Buffett profits from his hypocrisy:
Last Saturday, when Warren Buffett’s Berkshire Hathaway company revealed that its boffo first quarter was due partly to high returns from its investment in corporate jets, the cycle of irony was finally complete. Buffett, a well known critic of executive perks, has been particularly hard on CEOs who use private jets — that is, until he had his company buy one. At least he had the good humor to name it “The Indefensible.”
More where that came from through the link below.
The Warren Buffett Paradox [National Review]
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