What Did Bill Ackman Eat For Lunch The Day He Told MBIA's CEO To Stuff It?

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As many of you are aware, when Bill Ackman was just a young pup of a money manager, before he was coming up with genius one-stock funds, he placed a bet against MBIA, based on Ackman's belief that the company’s AAA rating was the stuff of bull shit. No one had ever dared question the bond insurer, so when its CEO, Jay Brown, got wind of the news, he demanded Ackman show up to his office to discuss the matter, probably referring to the meddlesome manager as "the little pissant" under his breath. Or something. Doesn't matter. What does matter is what Bill was noshing on before the meeting. It's something I've been thinking about for years as have many of you, as conversations with you leading lights would indicate. Today, finally-- finally!-- we have an answer.

Before his meeting with MBIA’s CEO, Ackman had lunch with Michael Ovitz, the founder of Hollywood’s Creative Artists Agency and a longtime investor in his fund. As they worked their way through six different versions of toro, the Japanese fatty tuna delicacy, Ackman asked Ovitz’s advice about the upcoming meeting with Brown. “It sounds like a very Japanese meeting,” Ovitz said. In other words, he said, “Just shut up and listen.”

Oh, and here's how the meeting went (spoiler alert: not great-ish. Because Ackman's hands smelled like fish. I'm kidding, it's because Jay Brown was raised in a barn).

“No one has ever gone to my regulators without my permission...This isn’t about the facts it’s about process,” Ackman recalls Brown saying. “You’re a young guy, early in your career. You should think long and hard before issuing the report. We are the largest guarantor of New York state and New York City bonds. In fact, we’re the largest guarantor of municipal debt in the country. Let’s put it this way: We have friends in high places.” The meeting ended abruptly. As the men filed out of the room, Ackman reached out to shake Brown’s hand.

“I don’t think so,” Brown said, refusing to extend his hand.

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