The Man Behind Activist Investors’ Biggest Bets (WSJ)
When an activist pitches a new idea, Mr. Hymowitz doesn’t grill him on valuations or specifics, managers said. He leaves the detailed vetting to others at the firm and focuses on the manager and the idea. “He’s there to smell you,” one activist said. Also see: Trian Launches Proxy Fight Against Procter &Gamble
France is actively seeking to punish the City of London during Brexit, according to a leaked memo (BI)
"The meeting with the French Central Bank was the worst I have had anywhere in the EU. They are in favour of the hardest Brexit. They want disruption. They actively seek disaggregation of financial services provision... The clear messages emanating from Paris are not just the musings of a rogue senior official in the French government or central bank. France could not be clearer about their intentions. They see Britain and the City of London as adversaries, not partners."
From $2 Billion to Zero: A Private-Equity Fund Goes Bust in the Oil Patch (WSJ)
EnerVest Ltd., a Houston private-equity firm, manages the fund. The firm raised and started investing money in 2013, when oil was trading at more than double the current price. But the fund added $1.3 billion of borrowed money to boost its buying power. That later caused it trouble when oil prices tumbled. Now the fund’s lenders, led by Wells Fargo, are negotiating to take control of the fund’s assets to satisfy its debt, according to people familiar with the matter. “We are not proud of the result,” John Walker, EnerVest’s co-founder and chief executive, wrote in an email to The Wall Street Journal.
New U.S. Subprime Boom, Same Old Sins: Auto Defaults Are Soaring (BBG)
It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud. Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017. A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide.
A Fanatic is One Who Can't Change his Mind and Won't Change the Subject (AQR)
It goes without saying that I may indeed be wrong. But, if so, Rob [Arnott] and team should demonstrate it. Frankly, he should either retract his oft made assertions or support them. But, at this point I’ve been beaten down and would settle for something much weaker than those two alternatives: just stop repeating the falsehood anew! That has yet to happen.
- “Sponsor a leading computer science department with endowed professorships and extensive grants to graduate students in the field of formal verification”
- “Acquire mainstream print and TV media outlets to promote and defend the use of cryptographic ledger in society”
- “Negotiate with a small nation-state the recognition of Tezos as one of their official state currencies, which would immediately give Tezos favorable treatment in terms of financial regulation. Attempt negotiations to purchase or lease sovereign land”
What tally sticks tell us about how money works (BBC)
Tallies were a way of recording debts with a system that was sublimely simple and effective. The stick would contain a record of the debt, for example: "£9 4s 4d from Fulk Basset for the farm of Wycombe". Fulk Basset was a Bishop of London in the 13th Century. He owed his debt to King Henry III. The stick would be split in half, down its length from one end to the other. The debtor would retain half, called the "foil". The creditor would retain the other half, called the "stock" - even today, British bankers use the word "stocks" to refer to debts of the British government. Because willow has a natural and distinctive grain, the two halves would match only each other.
As a Guru, Ayn Rand May Have Limits. Ask Travis Kalanick. (NYT)
“Rand’s entrepreneur is the Promethean hero of capitalism,” said Lawrence E. Cahoone, professor of philosophy at the College of the Holy Cross. “But she never really explores how a dynamic entrepreneur actually runs a business...She was a script and fiction writer. She was motivated by an intense hatred of communism, and she put those things together very effectively. She can be very inspirational, especially to entrepreneurs. But she was by no means an economist. I don’t think her work can be used as a business manual.”