We’ve don’t mind confessing that we have a bit of a crush on Erin Burnett. She’s pretty, scrappy and holds her own every morning against both CNBC’s Mark Haynes and MSNBC’s Joe Scarborough. But we it looks like we’ve got a bit of competition for her these days. After yesterday’s full page spread in the New York Post, Burnett’s no longer the best kept secret of Wall Street.
We knew she was destined for greatness when she handily won our reader poll. But we had no idea she had become a full-fledged super-star. According to the New York Post, rating for “Squawk” are up 79 percent over last year in the crucial 25-to-54 year old demographic. And we’ve even heard rumors that sometimes people turn the volume up on the televisions when she comes on. And now she’s even got her very own nickname: Street Sweetie.
Erin has certainly come a long way since her humble origins as a political science major at Williams. She worked as an M&A analyst in Goldman Sachs, and left that job when CNN’s Willow Bay offered her a job writing for the network and booking guests. But it was at Bloomberg where someone had the sense to get her in front of a camera and she really began to shine. Even Bess Levin says nice things about her.
We already knew Erin was an early riser, getting up around 5 am to head down from the Upper West Side to the cluttered little CNBC booth at the New York Stock Exchange. But from Zach Kouwe’s New York Post interview, we learn that Erin is a bit of a gym rat—she’s there four times a week—and that her favorite restaurant is Henry’s End in Brooklyn Heights. Henry’s End is an unusual choice that marks her as well-informed about dining in our fair city. It’s a favorite of DealBreaker’s, located just a few blocks from our Brooklyn Heights branch office. (Note to Erin: When you are in the neighborhood, you should totally try Noodle Pudding and Jack The Horse.)
A word of advise, Street Sweetie. Don’t let this fame go to your head. Becky Quick, who has always been perfectly charming to us on the set of Squawk Box, gets up earlier than you do and we don’t imagine she’s going to rest easy with her second place showing. And you’ve got CNBC’s ace Hamptons reporter Margaret Brennan coming up fast. Who knows how big she might get if Stevie Cohen decides to open up a second front in the war against Jim Chanos’ beachside manse?
To tell the truth, we’re not too worried. You seemed to be taking it all in stride this morning when Joe Scarborough did his best to embarrass you on Morning Joe. You seemed, well, sweet.*
*So sweet, in fact, that we can’t think of anything nasty to say. Which is totally why we’re trying to stir up trouble between Erin and the other lovelies at CNBC.
Street Sweetie [New York Post]
Morning Joe with Erin Burnett [MSNBC]
CNBC
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Posted in:
CNBC
Philip Goldstein, Episode III: The Revenge of the Regulators!
On The Money Smackdown Tonight
By John Carney
It wasn’t quite the ‘shot heard ‘round the world’ that Ralph Waldo Emerson said set-off the Revolutionary War in Concord, Massachusetts, but Philip Goldstein’s rebellion against hedge fund regulators certainly seems to have caught their attention. And tonight the revolution will be televised.
Goldstein, who founded the Bulldog Investors hedge fund, was the money manager who sued the Securities and Exchange Commission over a requirement that hedge fund managers register with the commission. The rule overstepped the SEC’s legal authority, Goldstein claimed. And when a federal appeals court agreed, the rule fell by the wayside. The SEC declined to pursue the case further with an appeal to the Supreme Court, and hedge funds were relieved of the burden of government registration.
We’ve come to think of that as Episode I in the saga of Goldstein. It obviously annoyed some at the Commission who had sought the authority. But it bugged state lawmakers and regulators too. Many state lawmakers and regulators who would like to exercise authority over hedge funds suddenly found themselves without the shield of federal authority. Without that shield, state lawmakers wanting to regulate hedge funds risked driving them away in search of laxer regulatory environments.
In Episode II, Goldstein filed a lawsuit against mandatory disclosure provisions in securities regulation. This time he argued that the disclosure amounted to the government taking his intellectual property—meaning, his investment strategy—without compensation and without any real justification. That case is still making its way through the courts.
In Episode III, the regulators struck back. Earlier this year, Massachusetts Secretary of State William Galvin sued Goldstein, alleging that he was soliciting ordinary, non-accredited investors to buy into his funds. Goldstein responded that he was simply exercising his rights under the First Amendment and accused Galvin of not understanding the concept of free speech. On CNBC’s On The Money, Goldstein took his challenge to Galvin a step further, offering to wager $100,000 that he will win his case.
“I’m not going to let some pompous ass sitting in Boston tell me I can’t talk to somebody or give somebody information when they ask for it,” Goldstein said in February. “This is not really about hedge funds; it’s about the First Amendment, and I think Galvin is just trying to get a trophy.”
Earlier this week, Goldstein’s lawyer launched a strongly-worded letter at the Secretary of State’s office. At a hearing, someone called James Cappoli from the Secretary of State’s office had accused Bulldog of soliciting investors with a brochure available through its web site. “Bulldog Investors has produced above average returns with below average risk, enticing the investor to invest with no risk,” James Cappoli said. Goldstein’s lawyer pointed out that Cappoli’s reading seemed to confuse the notion of “below average risk” and “no risk.”
It should all come to a head tonight, when Goldstein makes another appearance on CNBC’s On The Money. Our spies inside of the network tell us he will be up against Connecticut Attorney General Richard Blumenthal, better known as Connecticut’s answer to Eliot Spitzer.
The first time Goldstein offered to wager $100,000 on his case, both Blumenthal and former SEC boss-lady Laura Unger turned him down. We hope that Blumenthal will man up and take Goldstein’s bet this time. But somehow we doubt it.
Meet Mary Sue Williams. She’s a waitress at Undo’s, a restaurant that overlooks Interstate 70 in the sleepy town of St. Clairsville, Ohio, population: 5,057. She enjoys taking care of regulars, and has plenty of them, as she’s been working at the Italian eatery for nine years. She has two daughters, Jenni and Sarah, and a husband named Mark, who works as a cook at the local Denny’s. Mary Sue’s never bought or sold real stock in her life, though she may be the winner of CNBC’s Million Dollar Portfolio Challenge.
Currently in sixth place (Williams says she used the “Warren Buffett approach” and invested in things she knew about: lubricant manufactuerer WD-40 (WDFC) and Crocs (CROX)), there’s a good chance that she’ll be bumped to first place in the fake contest because the contestants ahead of her have proven themselves to (possibly) be lying cheaters who can’t even stop themselves from trying to scam a simulated game on the internet, run by CNBC and promoted by Tim Sykes. So far, nothing’s been said about players 1-5 doing hard time for their misdeeds, but this seems like punishment enough. Mary Sue Williams, we salute you.
The Million-Dollar Waitress [BusinessWeek]
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Posted in:
Bancroft
Pearson Mulls Offer For Dow Jones
But The Journal’s Newsroom Isn’t Crazy About This So-Called ‘White Knight’
By John Carney
Although Pearson PLC is being called a possible ‘white knight’ bidder for Dow Jones & Co, many in the newsroom of the Wall Street Journal are not enthusiastic about being bought by the publisher of the Financial Times. Reporters at the Wall Street Journal, many of whom regard the Financial Times as an inferior paper with low-quality “Brit journo” standards of fact-checking and sourcing, are worried that ownership by Pearson will deteriorate journalistic standards at the paper, a source at the Journal told DealBreaker.
“I took a straw poll around the office. A lot of people are worried about what this will do to the Journal’s reporting,” the source said.
Word began to circulate late on Friday afternoon that General Electric and Financial Times publisher Pearson were “in talks” about a potential joint offer for Dow Jones & Co. Over the weekend, the story ran in the Financial Times, the Wall Street Journal and the New York Times. A decision on whether or not to make a bid is expected to come within days.
A news of a possible bid from Pearson and General Electric may have the ironic effect of making the bid from News Corp more attractive. While News Corp chairman Rupert Murdoch has promised to spend more on the Wall Street Journal, expand its international presence and has announced plans to launch a new cable news network for financial news that may give Journal reporters more outlets for their reporting, a bid from Pearson and General Electric would likely involve mostly cost-cutting synergies.
[After the jump, the not-exactly-surprising news that Journal reporters aren't totally psyched about working for the publishers of the Financial Times.]
If you want to see Maria Bartiromo aggressively contradict Wilbur Ross (pause to let that soak in), click here and watch CNBC’s Closing Bell from yesterday. Ross was on CNBC joining the doomsday club of major PE players sharing his own not very unique vision of how the next downturn will play out.
Ross feels that the recent market surge is a result of the net reduction in the floating supply of equities due to high LBO volume, which is where Maria jumped on him to make a point he was getting to anyway. Maria interjected, “so the smaller float is going to push prices up, but that’s not quality Wilbur,” upon which Ross reacted as if talking to an over-eager granddaughter and gave a polite, “you’re worth less than an OEM that needs to scramble for A/R securitization facility increases every quarter just to stay afloat,” response.
Ross also thinks equities in China may catalyze a greater Asian market tumble. Equities in China are trading at above 30x earnings on average (which has been a bubble threshold in the past, as the last US bubble burst when the S&P was trading at similar levels (~33x)) and new investing in the country has been more the result of an uninformed public fervor than anything else.
Ross conludes by giving a LBO 101 lesson, and a reason for PE investors to worry. If entry and exit multiples are the same, which is a base assumption of many PE deals, usually things are swell (assuming the PE firm’s done its job), as long as interest rates are constant (or drop). Since Ross thinks rates are going to spike, along with defaults in the next two years, a lot of those projected returns in PE models aren’t going to pan out.
Wilbur Ross Sees Private Equity, China Bubbles [CNBC]
There comes a time in every Amherst student’s life when she must put aside the feelings of hate that stir in her body for the vile weed that is Williams College and say, in the face of Williams alum Erin Burnett: this chick is hot. And also, according to those tracking the not-yet-existing rivalry between CNBC and the Fox Business Channel, CNBC’s secret weapon in the hasn’t-happened-yet brouhaha with Fox Business Channel in an alleyway that has yet to be determined. Broadcasting and Cable profiles EB today for serious and fair-weather fans alike. We’ll get right down to it:
+ She wakes up at 5 am
+ Since making her debut on Squawk during its relaunch in December 2005, the program is up 142% over first quarter 2006 in adults 25-54; Street Signs is up 57% in the demo.
+ Erin is energetic
+ Erin is solicitous
+ Erin is not fawning
+ Maria 2.0 will take over for Maria when gravity takes its toll
+ Burns was voted “Most Likely To Host a Talk Show”
+ Had (has?) a crush on Dan Rather
+ Also had a crush on CNN’s Willow Bay, who offered her a job when she was working at Goldman.
+ Lives on the Upper West Side (no specs beyond somewhere between 66th and 79th/Central Park West and Riverside but we’ve got someone working on it. Inquire within after 4).
+ Favorite books: The Historian, Mad Money: Watch TV, Get Rich
+ Likes: short walks in the park, squash (the sport), Mark Haines, first-year analysts
+ Dislikes: bear markets, natural gas traders, quants, dill
Pretty hot stuff. But, thing of it is, everything’s a matter of taste. Some of you might now be making use of the handicapped bathroom, others saying, “Erin’s well and good, but I prefer to sink my teeth into Italian.” There was a theory going around these parts on Friday morning that Burns and a certain Times reporter had a wild night after co-hosting Kudlow and Company together, as they were both seen looking a little rough around the edges (compared to their usually sparkling selves) the next morning on air. We’re not saying, we’re just saying. Point is: we don’t tell anyone how to live their lives. We’re in the Burnett camp, you might not be. Some people (who are freaks) might not like a girl who rides bulls. We’ve asked this question once before, but people change, body parts sag, tides turn and sometimes, you just want some strange love. So:
[Ed's note: Alexis Glick-- that was a test.]
Fifth Estater: CNBC’s Erin Burnett [Broadcasting and Cable]
Among the possible insider traders in CNBC’s fake portfolio challenge are an investment manager (with an MBA—from Stanford!), a radiology resident in Detroit (shocker) and a retired chemical engineer from Bollingbrook, Ill. CNBC said yesterday that in order to drum up interest in the network beyond the comings and goings of man meat Charlie Gasparino, it would be looking into unusual trading in the simulated contest. Timothy Sykes, “hedge fund manager and blogger,” told the LA Times yesterday, “There are always going to be cheaters. You can try your best to make it fair for everyone, but sometimes a few people are going to try to find ways around it,” which may or may not explain how he turned $13,000 into a pre-tax sum of just over $2 million. Concidentally, CNBC just happens to be airing a six-episode series next month called “American Greed: Scams, Scoundrels, and Scandals.” The b-roll of the day-trading (with not-real money) cheaters should be incredible.
Earlier: CNBC: THIS Is What We Choose To Take A Stand On
CNBC probes stock-game claims [LA Times]
CNBC has announced an investigation into “complaints of unusual trading among some of the 20 finalists in the CNBC Million Dollar Portfolio Challlenge [sic],” which was mercifully taken out back and shot on May 25. Ooo, insider trading, how trendy, how scandalous, how very “you are a bad boy,” indeed. While it’s true that we don’t necessarily have any hard evidence that this isn’t a plot by producers to drum up page views (on CNBC.com)/excitement about the Challenge and CNBC in general during this “we haven’t had a reporter go down on a source in a while, we’ve got to come up with something” period, we are allowed to speculate that this is the case, are we not? When John “I Bleed For CNBC” Carney and Tim “Pre-tax Sum of $2 million” Sykes stop taking your calls, you know something’s got to be done.
Earlier: CNBC Continues to Be Nonplussed Over Ethics, Lack Thereof
CNBC Probing Alleged Violations by Finalists in Million Dollar Challenge [CNBC]
If a robot goes down on a source, is it still an ethics violation?
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Posted in:
Bancroft
The Dow of Murdoch: Rupert Murdoch Brings The Bancroft Family Together
By John Carney
The family that controls 64% of the voting power of Dow Jones & Co is reportedly meeting right now to discuss News Corp’s bid for the company. David Faber of CNBC reported just a short while ago that the Bancroft family, which controls Dow Jones through its super-voting shares, was holding a conference call “right now” to discuss the bid. This may be a sign that the family is re-considering its rejection of the News Corp offer.
Today Bancroft family members received a letter from Rupert Murdoch stating that he regrets the details of the offer had become public and promising to establish an “independent, autonomous editorial board” to oversee the paper. In the letter, Murdoch describes himself as a “first and foremost…newspaper man,” praises the Wall Street Journal’s “journalistic independence and integrity” and says his is “unwilling to contemplate” any interference with the paper’s integrity. He writes that he would like to appoint a member of the Bancroft family to the board of Dow Jones.
“This letter may give the Bancroft’s a way to accept Murdoch gold , if that’s what they’re looking for,” an investment banker familiar with the deal told DealBreaker. “They’re haven’t been any other bidders, which must put pressure on them to accept this offer.”
Murdoch probably hopes that this is exactly what effect his letter will have. He’s steadfastly refused to offer more money than his original offer. Last week, CNBC’s Charlie Gasparino reported that he had been advised not to offer more by his bankers at JP Morgan had told him not to increase the bid. As we explained on Friday, Murdoch’s strategy to win over the Bancroft’s now appears to rely on charm and promises to not ruin the paper.
Murdoch also promises to make efforts to keep the team of “journalists, editors, management” of the Journal and other Dow Jones properties, expand the Journal in Europe and Asia and improve the Journal’s New York headquarters.
Text of Murdoch Letter to Bancrofts [Wall Street Journal]
News Corp & DJ Update [CNBC.com]
We’re edging closer and closer to a tabloid culture for corporate executives, where every flaw and foible gets dragged mercilessly before the public until they are hounded from office. This was probably inevitable, as we’re already using this system to replace democracy for selecting our leaders and to replace talent to select our music and film celebrities. Last night DealBreaker’s John Carney went On The Money to debate whether the private lives of CEO’s should be matters of public concern, and he wound up defending the pretty much indefensible answer: ‘yes.’ His reasoning–so to speak–is that on occasion we can learn about the character and judgment of a corporate executive from what we know about their private lives. Although something might not affect their job performance immediately, neither do minor issues like small-time embezzling. But we throw embezzlers overboard nonetheless. So sometimes we know that character matters. Unrelated: John Carney is the editor of Dealbreaker.com, an online business tabloid and Wall Street gossip site that covers the personalities and culture that shape the financial industry, offering original commentary, news and entertainment.
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