A question that many have asked themselves and others since Bill Ackman announced he was shorting shake and supplement company Herbalife is, “Okay, but for how long? When does it end?” The Pershing Square founder and his team could very well be right in classifying the organization as a pyramid scheme, but central to their argument is that the government is going to shut this thing down, and that might not happen. Will Pershing keep its position forever? Long after Bill retires and for many years after that? Will CEO Michael Johnson ever be free from this man who haunts his dreams or will Ackman always be there, watching, waiting? In an interview yesterday, the most passionate hedge fund manager to ever live said basically yes to the latter. Read more »
As you’ve probably heard by now, hedge fund manager Ken Griffin is getting divorced, having served his wife Anne with papers at some point yesterday afternoon. So, it’s sad times at Casa de Griffin, made even sadder by the fact that the Citadel founder may be parting with a good chunk of his milkshake allowance at some point in the near future. Read more »
Harvard and Kellogg MBAs (well, four of them, anyway) love to make a few million by day and catch some college hoops/eat beef sandwiches together by night. Penn State, Princeton, UT and USC alums, too. For Whartonites, two years at West Philadelphia’s College of Capitalism were more than enough time in each other’s company. Read more »
SEC Sends McGraw Hill Wells Notice Tied to CMBS Ratings (Bloomberg)
McGraw Hill Financial Inc. (MHFI) said it received a notice from the U.S. Securities and Exchange Commission that the regulator may seek an enforcement action tied to six commercial-mortgage backed securities that its Standard & Poor’s division graded in 2011.
Calpers Pulls Back From Hedge Funds (WSJ)
Public pensions from California to Ohio are backing away from hedge funds because of concerns about high fees and lackluster returns. Those having second thoughts include officials at the largest public pension fund in the U.S., the California Public Employees’ Retirement System, or Calpers. Its hedge-fund investment is expected to drop this year by 40%, to $3 billion, amid a review of that part of the portfolio, said a person familiar with the changes. A spokesman declined to comment on the size of the reduction but said the fund is taking more of a “back-to-basics approach” with its holdings. The retreat comes after many pension funds poured money into hedge funds in recent years in hopes of making up huge shortfalls.
Billionaire Ken Griffin files for divorce (Crain’s)
Ken Griffin, the billionaire founder and CEO of Citadel LLC, a Chicago-based hedge fund and financial services firm, has filed for divorce from his wife of 10 years, Anne Dias Griffin, a French-born hedge-fund executive. A statement from Ms. Griffin’s attorney, Robert Stephan Cohen, indicated the divorce could be contentious: “Ken Griffin unilaterally filed a divorce petition today with no notice to either me or my client, knowing full well that she had just left for summer vacation with their three young children and would therefore be unable to respond. Anne’s highest priority remains her family, especially the wellbeing of her children. She is hopeful that this personal matter can be resolved privately and in the best interests of her children. We have no further comment at this time.”
‘Bring It On,’ Frank Tells Dodd-Frank Critics at Hearing
Barney Frank, the panel’s former chairman, returned to Washington Wednesday to sit before the committee and provide a feisty defense of that year’s regulatory overhaul, the Dodd-Frank Act that bears his name. The hearing split along partisan lines in support of and opposition to the wide-ranging law passed in response to the 2008 financial crisis. “I know the chairman said the financial reform bill is as damaging as the health-care bill,” the now-bearded Massachusetts Democrat said, referring to the current Republican chairman, Jeb Hensarling of Texas. “Well my recollection is this Republican Congress votes on a fairly regular basis to repeal the health-care bill. But where’s your bill to repeal the financial reform bill? If you have the courage of your convictions, bring it on.”
U.S. Considers Issuing Debt With Maturities of More Than 30 Years (WSJ)
The U.S. government has asked big banks whether it should issue bonds that mature in more than 30 years, as officials consider tweaking the types of debt they sell. In a questionnaire sent to dealers last Friday, the Treasury Department asked 22 primary dealer banks, which underwrite U.S. government debt sales, about possible demand for ultra-long-term sovereign bonds. A Treasury official cautioned that at this stage, the U.S. wants to get the views of market participants. “We would give significant heads up” if the Treasury decided to sell ultra-long bonds, said the official, adding that nothing is imminent. The Treasury regularly asks primary dealers about auction demand and supply. Selling longer-maturing debt could help the U.S. borrow at low rates for long periods, but it could also be an unreliable type of funding, said analysts and investors.
Moody’s downgrades Atlantic City general obligation bonds to junk status (CNBC)
The credit rating service cut the city’s underlying rating to “Ba1″ from “Baa2.” It affects $245 million in outstanding debt. “The downgrade to Ba1 reflects the city’s significantly weakened tax base, revenue-raising ability, and broader economic outlook,” Moody’s said in a statement, adding that its outlook remained negative.
Deep-Fried Doritos Debut at SoCal Fairs (LA Weekly)
Every year, Charlie Boghosian, aka Chicken Charlie, tries to outdo himself with his deep-fried concoctions sold at California fairs. The man began his arterial onslaught modestly several years ago with deep-fried Twinkies and deep-fried Snickers bars. Seeking ever greater challenges, he took on deep-fried Oreos, deep-fried cookie dough, deep-fried Spam, deep-fried Pop-Tarts and of course, the Zucchini Weeni. Many thought he had reached the apex of his hot-grease powers in 2011 with deep-fried Kool-Aid. But that was until a CBS News reporter’s daughter, along for an interview, recently challenged Charlie to deep-fry her bag of nacho cheese-flavored Doritos. “I did and it was delish,” Boghosian told the Weekly. “What’s amazing is the deep-frying made it more crunchy.” Boghosian explained his process: “I dipped the chips in a very watered down fish-and-chip batter, and after they were finished frying, I topped them with a season mixture of mine similar to Cajun seasonings.” He quickly added the new deep-fried discovery to his fair-food menu. Now a week and a half into the Orange County Fair, “It has become a fan favorite,” he says…The deep-fried Doritos aren’t the only new addition to Boghosian’s menu this year. Proving that they don’t call him Chicken Charlie for nothing, he’s also debuting deep-fried chicken skins. “You know people always say the skin is the best part,” he explains. “I thought one day, let’s just get to the best part and not waste any time on the rest of the chicken. It worked. It’s amazing and delicious. It’s like chicharrones, only better.” Read more »
$$$ Allianz, the German insurer which owns Pimco, wants to ensure that in a post-Gross era the asset manager he co-founded will not be so reliant on the investment decisions of one person. [Reuters]
$$$ The big money still loves hedge funds [NetNet]
$$$ World’s Biggest Wealth Fund Reviews $8 Billion Russian Holdings [Bloomberg]
$$$ Ex-Jefferies Managing Director Litvak Gets Two-Year Sentence [Bloomberg]
As you’ve probably heard by now, Bill Ackman gave a little presentation yesterday, on his favorite supplement and diet shakes company, Herbalife. Prior to the event, the Pershing Square founder appeared on CNBC hyping up the thing so hard that he came extremely close to promising video of CEO Michael Johnson threatening to fire employees who refused to snort lethal dosages of Formula 1 Healthy Nutritional Shake Mix (Wild Berry flavor) up their noses. So when the presentation failed to deliver, the disappointment across Wall Street was palpable. Pershing Square investors, however, know a good thing when they see it, and are unfazed. Read more »
Eliot Spitzer is back doing one of the things he is good at doing: Wall-Street sheriffing. (He may or may not be back to doing some of the other things he is good at doing, but neither we nor, to the best of our knowledge, the U.S. Attorney’s Office, is aware of it.) Read more »