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Blackstone Will Be Profitable In 1-100 Years From Now

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Hey-o, we’re hearing from the Wall Street Journal, Bloomberg, CNN, the New York Times, MarketWatch and Claudia, our Starbucks barista, that Blackstone maybe didn’t have such a good third-quarter? That it maybe recorded a net loss of $113.2 million, or 44 cents per share, compared to a net income of $372.5 million a year earlier? (Voice getting higher pitched) That the loss is being attributed to $802.60 million of non-cash compensation charges and some stuff related to a so-called credit crisis? That Stephen Schwarzman wishes they’d “never gone public”? (Only dogs and people whose ears are trained to register extremely high pitches can hear me at this point) That he can’t even afford imitation crab meat anymore? Yeah? Yeah? (Voice returns to normal) How embarrassing. Doesn’t it suck when you’re a public company and are required by law to disclose your failures for the entire world to see? Merrill Lynch knows what we’re talking about. (A tip for next time: take a cue from Goldman Sachs and just lie.)
Honestly, though, don’t worry about BX and Stephen (and the shareholders who must be thrilled about Blackstone falling 8 percent this morning)—they’re going to be fine. Not just because the exceedingly wealthy always manage to land on their feet, but because they have a plan, and that plan is to do something so crazy and seemingly stupid-sounding that it just might work (or not work, it’s one of these two things). According to president and CEO Hamilton James, Blackstone took a vote between going bowling or believing in subprime, and the latter won. James says that while the “subprime black hole is appearing deeper, darker and scarier than [banks] thought,” the bottom is not far, which is why BX is “starting to go long the subprime market.” Sounds pretty different from what everyone else on the planet is saying/doing, but okay. We have to assume that Schwarzman is doing everything in his power to bring those $4 billion crab claws back into his life, and not just throwing a bunch of bad ideas against the wall and waiting to see what sticks.
Blackstone skids on quarterly loss [CNN Money]
Blackstone posts loss from IPO charges [Reuters]