TABLE OF CONTENTS
August 2008
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FRIDAY AUGUST 29
So, You Think You Know Football?
All right, maybe you can pick stocks, but can you pick a football team that actually wins once in awhile? Test your wits against other great minds on Wall Street in our annual Trader Bowl. You know you want to.
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FRIDAY AUGUST 29
Bankers vs. Consultants?
From a trader’s standpoint, both of these guys are complete tools. These nerds were the ones that were bullied by their larger, football-playing peers on the playground as kids, and just to prove a point they feel they must chug bottles of Grey Goose and Red Bull to feel cool about themselves. You guys really want to throw down? Stop using Excel without the mouse and spend a day in the NYMEX crude oil pits. You won’t know what hit you.
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FRIDAY AUGUST 29
Not Quite SAC, But Might As Well Be
SAB Capital head honcho Scott Bommer just traded his apartment as if it were a short-term play. After buying a co-op on Fifth Avenue for $46 million in January, Bommer and his wife flipped the unit for $48.9 million earlier this month, besting the record for a co-op sale in Manhattan. And they say real estate is falling…
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FRIDAY AUGUST 29
What’s Left to Slash?
Lehman is looking at cutting some 1,200 jobs in its latest round of cost cutting, a person familiar with the matter said, as weak financial markets spur layoffs across Wall Street. The job cuts would amount to roughly 5 percent of the work force of the fourth-largest U.S. investment bank, which has already announced three other rounds of cuts totaling about 4,000 positions this year.
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FRIDAY AUGUST 29
“But It Doesn’t Matter Who Wins”
Jim Rogers is quite possibly more populist than Barack Obama. It’s easy to say that neither candidate will do much to change America when you’re worth billions and have fled to China. Jim, what’s your solution? Tell us, please. You don’t fix the problem by moving overseas.
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FRIDAY AUGUST 29
Hopefest Day Four: America, We Are Better Than This
Barack Obama is heading for the home stretch for the White House, accepting his party’s nomination Thursday night. He hopes to turn around a “failed presidency” and restore America’s promise. Traders fear he might be bad for business, but he sure does give a good speech.
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THURSDAY AUGUST 28
Hopefest Day Three: Obama Officially the Man. Bubba, Biden Awe Crowd.
Day Three at the DNC saw the party nominate their first ever black candidate, while the Bill Clinton and Joe Biden got their moment in the proverbial sun. Tonight Obama will accept the nod.
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THURSDAY AUGUST 28
Spy vs. Spy at Hermitage
Apparently the most recent investor letter from London-based hedge fund Hermitage Capital Management reads more like a spy novel than a summary why they were up or down for the most recent quarter. Thieves posing as Hermitage officials were apparently able to defraud hundreds of millions from the Russian government. You really can’t make this stuff up.
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THURSDAY AUGUST 28
Hedge Fund Managers Are People Too
The top ones make nine (sometimes ten) figures a year. But in the end, they are human like the rest of us. They have families, and with an opportune camera, they can appear just as vulnerable. From our friends over at Cityfile, we look at T100 member Mark Kingdon’s recent family trip to the Olympics in Beijing.
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THURSDAY AUGUST 28
Fannie Shakes It Up at the Top
Fannie Mae CEO Daniel Mudd is shaking up the executive suite to turn around the battered mortgage buyer. He’s taking a page from the sports world, as if he’s the general manager of a football team who by simply firing the coaching staff will change the fortune of the franchise. Sport is a business, but business is not always sport. If and when Fannie gets nationalized, how great will he look?
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THURSDAY AUGUST 28
“Because I’m a Bad Businessman, You Owe Me $11 Million”
Stuart Ross, estranged father-in-law of Blackstone Senior MD David Blitzer, was arrested yesterday, charged with trying to extort millions from his son-in-law. The 71 year-old former licenser of the Smurfs cartoon who along the way lost much fo his fortune, insists Blackstone worked with the Manhattan DA to ruin him. Says a firm spokesman, “Utter nonsense.” Sorry Stewie, Schwartzman and Company are far from being your Gargamel.
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THURSDAY AUGUST 28
Pickens to NBC: My Army Will Get to You and You Will Run My Ad
For those of you following the Pickens Plan these last two months, the legendary oilman turned de facto national energy policy director has not seen a camera he doesn’t like. And for good reason… no one likes paying $4 a gallon for gas. So if people in Iran are converting their cars to natural gas so that they can sell us more oil at triple digit prices, we ought to know about it, NBC.
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WEDNESDAY AUGUST 27
Hopefest Day Two: A Call to Unity
After a bruising primary season, Hillary Clinton has officially thrown her support behind Barack Obama. But many of her supporters, still disillusioned by her loss, have actually gone to McCain’s side.
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WEDNESDAY AUGUST 27
Uh Oh, the FDIC Needs Cash Too
When the agency that’s supposed to insure American’s hard earned cash up to $100,000 per institution needs to borrow money, you know you have a problem. We know we’re an overleveraged nation when the backstop to America’s fast-diminishing savings has to rob Peter to pay Paul. When mattress sales go up 50% next quarter, we’ll know why.
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WEDNESDAY AUGUST 27
Temasek Upping Merrill Stake
After taking a bath on their first stake, and receiving a reset payment, Singapore-backed Temasek is upping its stake in Merrill Lynch. Despite what Warren Buffett said last week, i.e. sovereign wealth funds are buying what is being sold to them, Temasek believes John Thain and company will right this ship. Kool-Aid be damned!
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WEDNESDAY AUGUST 27
Why Don’t You Take My Red Stapler Away Too?
Remember when presentations were made in black in white, with pie charts displaying every shade of gray? When silly little electronic devices called BlackBerrys didn’t get in the way of everyday life? When know-it-all McKinsey consultants didn’t watch over your shoulder to make sure you used Excel without your mouse? Well, Citi is returning to a simpler time.
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WEDNESDAY AUGUST 27
Hedgie Heavyweights Now in the Restaurant Business?
Funds controlled by David Shaw and Steve Cohen have their sights set on Orient-Express Hotels, owner of New York’s 21 Club. While Shaw is now focused on discovering the building blocks of life and Cohen probably gearing up for the next Damian Hirst auction, perhaps the two could celebrate their respective good fortunes in the famed wine cellar, with Cohen dragging in one of his formaldehyde enclosed animals just to compliment the dinner décor.
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WEDNESDAY AUGUST 27
Suitors Swoop in on Neuberger Berman
Nothing gets the financial public’s attention like a good bidding war. As Lehman seeks to save itself from, well, itself, it has lined up a host of suitors, including KKR. But one has to wonder… is Dick Fuld playing the role of Penelope from The Odyssey? Is he weaving a tapestry promising he will pick a mate when it’s finished, only to unravel it at the last minute to delay the process?
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TUESDAY AUGUST 26
Will Stevie Cohen Show Up?
By
Chris Gillick
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TUESDAY AUGUST 26
Hopefest Day One Ends With a Bang
The Democratic National Convention is to conclude with a resounding speech by Barack Obama this Thursday. The festivities warmed up on Monday though, with speeches by his wife Michelle and party stalwart Ted Kennedy, who despite illness insists he will be there in January for Obama’s would-be inauguration. Judging how Kennedy has a habit of cheating death, we should not put it past him.
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TUESDAY AUGUST 26
Falcone At It Again
This guy just does not give up. In 2008, Phil Falcone has become the activist of activists. First the New York Times, most recently Cablevision, but the nastiest yet to come is Cleveland Cliffs, who apparently had the nerve to make an acquisition WITHOUT consulting their largest shareholder first. One would hope the company is ready to do battle.
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TUESDAY AUGUST 26
Even the Best Lose Their Shirts
JP Morgan has been one of the more adept at skirting the credit crisis. While their peers have had their hand out for billions of petrodollars in the last year, Jamie Dimon’s crew stayed relatively above the fray. So much for that. On the brink of potential nationalization for Fannie Mae and Freddie Mac, JP Morgan is feeling the pain on the preferreds to the tune of $600M.
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TUESDAY AUGUST 26
Self-Policing
If there is any industry that cries foul whenever regulators come down too hard, it is financial services. Wouldn’t European-style principles-based regulation, i.e. less stringent rules, be better for all? Well, not necessarily. The question is, who is worse off for a lack of rules, the US or UK?
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TUESDAY AUGUST 26
So Much for the Dog Days
August is typically the time when you could hear a pin drop on Wall Street. Little volume with everyone on vacation. But chances are that fewer people are on vacation by choice this year. Fannie and Freddie are nearly toast, Lehman somehow keeps its head above water, hedge funds are closing, but at the end of the day, you can find a good beach read in Damn It Feels Good To Be a Banker, harking back to the days where bottle service was a little more common.
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MONDAY AUGUST 25
Redler's Rant: The Short Sale Rule is Not the Problem
By
Scott Redler
The entire housing problem was caused by the public, through a combination of greed and lack of common sense.
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MONDAY AUGUST 25
So What Do Olympians Do When Their Events are Over?
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MONDAY AUGUST 25
No More Olympic Primetime for Four Years
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MONDAY AUGUST 25
“Got Subprime Trash? We’ll Take It”
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MONDAY AUGUST 25
“Sorry, the Firm Sailboat Has to Go”
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MONDAY AUGUST 25
No Really, It’s “200 West Street”
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MONDAY AUGUST 25
Obiden, Here We Come!
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FRIDAY AUGUST 22
Friday Levity: Three Minutes You’ll Never Have Again…
And with these Kelis/Shoshanna Lonstein lookalikes, well worth it.
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FRIDAY AUGUST 22
To Russia (Without Love)
Maybe Mother Russia is still gloating over the Georgia affair, but its show of military might was not so tactical for its economy, where the smart money is leaving in droves (read: at a rate rivaling the 1998 ruble crisis). Is this only the beginning, or is the worst mostly over? (Note: don’t miss the “million-headed hydra of the bourgeoisie” quote in the story after the jump. So necessary.)
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FRIDAY AUGUST 22
Harbinger’s Hobgoblin?
Phil Falcone’s Harbinger Capital just scarfed down another sizable chunk of Cablevision Systems, according to filings released yesterday. But with the latter’s dual-class stock structure blocking him from ousting the company’s entrenched management, he has limited options in how he might pressure it. High-profile media battle, anyone?
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FRIDAY AUGUST 22
What Merrill Finds Poachworthy
Merrill Lynch has not been able to keep its hands off mortgage traders lately. And the resulting furor is making waves at top investment banks, not excluding Goldman, Citigroup and JPMorgan Chase. But who’s the guy behind all this newfound grabbiness?
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FRIDAY AUGUST 22
Mammoth? Mammoth!
What do you do when your $125K-a-year former assistant rips off your credit card to the tune of $45,000-plus? If you’re Frederick Iseman of New York’s Caxton-Iseman Capital you sue the pants off her (and win). Too bad the assistant, who plead guilty to the theft, is now trying to do the same to him – only in the form of a $24 million sexual-harassment suit that name-drops, among other things, ``The Mammoth Book of Erotic Fantasies.'' That’s right. You cannot make this stuff up.
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FRIDAY AUGUST 22
Lehman: Hostile Takeover In The Cards?
What happens when investors sharply disagree with corporate executives’ assessment of their own company’s worth? According to Richard X. Bove, the analyst at Ladenburg Thalmann who’s recently shot to fame for his blistering criticism of Wall Street’s banks, the unfolding events tend to go a little something like this.
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FRIDAY AUGUST 22
In The (Jackson) Hole
As the weirdly celebrated, if floridly macabre, author Annie Proulx releases her third installment of the “Wyoming Stories” books (a.k.a. Wyoming Is Hell) the world’s top central bankers convene on the mountainous region in hopes that its undulating hills might lend them a bit of post-subprime inspiration. We expect to see signs of whether this magic tonic is working during Fed chief Ben Bernanke’s kick-off speech today – but, given the following assortment of remarks from the peanut-munching crowd (including one from Myron Scholes) we can’t say we’re holding our breaths.
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THURSDAY AUGUST 21
Vinipedia: Fill In The Blanc
Don't know your Fumé from your Fuissé? At last, a lifeline for the vinously challenged.
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THURSDAY AUGUST 21
Shaking A Different Kind Of Moneymaker
Ever sit in your favorite champagne bar, the one with pictures of Garbo, Kelly and Sinatra staring down at you from gilt walls (a la “we are just the classiest Veuve Clic spot in town”) and think, “This bubbly is great, but why is Michael Jackson’s ‘Man in the Mirror’ on repeat?” Major buzzkill. It’s probably because the owners haven’t bothered to hire anyone to pick out any good music. Fortunately, the trend is not in their favor. Here’s how music is increasingly being used to manipulate you – and your grip on your wallet – when and where you least expect it.
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THURSDAY AUGUST 21
Auction-Rate Scandal’s Next Targets
Deutsche Bank, Goldman and Bank of America (and possibly brokers such as Fidelity Investments and Oppenheimer) are finding themselves in the crosshairs, as the long arm of the law steps up its action-rate shakedown. So, who’s bent on fighting to the last?
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THURSDAY AUGUST 21
Nice Day For It
The sun is shining, the birds are singing and there isn’t a cloud in the sky (okay, that’s a total lie, but indulge us). There’s something missing, though. Oh, yeah...wait. Of course. Wouldn’t it be the bee’s knees today if we could snatch up a bank for a song that’s going up in a giant mushroom cloud? But where to find one? Just ask Lone Star Funds.
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THURSDAY AUGUST 21
Andor Closes Its Doors
Why did Daniel Benton, co-founder of Andor Capital Management, decide to retire from managing outside capital after 24 years of trading?
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THURSDAY AUGUST 21
Fed On Line 3…
Even if Credit Suisse had planned on pulling a credit line from Lehman Brothers last month (this, according to the rumor detailed in the following story) did anyone really expect them to proceed after the Fed got on their red batphone to give them the hard sell? It’s not like we don’t all know what happened to that other Swiss monolith when it got another U.S. agency’s hackles up. We’re not trying to start something here. We’re just sayin.’
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WEDNESDAY AUGUST 20
Time Out With Ari Kiev: Short Stress
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WEDNESDAY AUGUST 20
Running Of The Running Mates
For your viewing pleasure from the always outstanding Barely Political (BP, marry us and have all our babies).
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WEDNESDAY AUGUST 20
How Esoterica Got Its Groove Back
As one disarmingly honest trader let slip to us, “Hey, if I could make money off of broken dishes, I would trade them.” Or, as it were, Madonna’s bra. Find out what people are making a mint off of while you laze about the West Village dropping dollars in all the wrong places.
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WEDNESDAY AUGUST 20
Deal Or No Deal
An inside look at the unusually rich terms Freddie Mac is being forced to offer investors as it seeks to auction off $3 billion of its debt. Clearly, this raises still more concerns about the health of the U.S. mortgage monster. But is it good for you?
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WEDNESDAY AUGUST 20
Targeted: Commodities Trader No. 8,236
A federal court in Philadelphia has ordered Paul Eustace, former president and founder of a Philadelphia hedge fund, to pay nearly $300 million for defrauding his clients. And if you need another reason why all commodities traders better watch their backs these days, you deserve whatever you get.
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WEDNESDAY AUGUST 20
Farmland Fever
Want to know why savvy portfolio managers around the world are making a land grab for, uh, land? Because of deep-pocketed countries like Saudi Arabia, that’s why. And if you haven’t the slightest idea of what we’re talking about, you, piker, need to read this.
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WEDNESDAY AUGUST 20
‘Dot Corn’ Days
Has the whole agricultural story been overplayed? It’s starting to look like it. Given the recent pullback from outsized gains reaped by stocks of that ilk since 2003 (which, by the way, outstripped even those of the dot-com boom before the crash to end all millennial crashes) here’s why the chatter is picking up in earnest among those looking to finally throw in the towel.
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TUESDAY AUGUST 19
Ethanol: The Biggest Scam That's Ever Come Along!
By
Chris Gillick
So says Texas governor Rick Perry. Some of his residents can't afford to buy groceries, yet 30% of corn production is going into 3% of the country's fuel. The solution: use every other legitimate source out there. "We have the wind and we have the land," he says.
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TUESDAY AUGUST 19
Hedge Funds: Total Cakewalk…Right?
Don’t worry if you can’t snap your fingers and just start up a hedge fund. It looks like CNBC’s Ron Insana couldn’t, either.
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TUESDAY AUGUST 19
'Icahn Of Sweden’ Elaborates
The man whom Sweden’s newspapers brand ``the butcher'' offers up some choice words on why it’s infinitely better to put deals together from Stockholm than any of the major cities.
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TUESDAY AUGUST 19
Quoth Of Noth: Scary Words From Ex-IMF Chief
Via Reuters: “I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come...We’re not just going to see midsized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one, one of the big investment banks or big banks…” (Uh, wasn’t Bear supposed to be the big one?...??)
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TUESDAY AUGUST 19
Just A Quick Stop At The ‘Poti’
It’s like when your significant other is thrown out of your place (by you) but always has to break something on the way to the door. Russia’s definitely pulling out of Georgia. Just as soon as it takes care of a couple things.
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TUESDAY AUGUST 19
JP: Best Broker Ever?
The votes have been cast and the tally is in: here’s why JPMorgan Chase reigns supreme as the most effective broker at getting top-notch order fills for its traders (according to data compiled by a firm that monitors trading costs in 57 countries). If you’re sick of getting nothing but sass from your broker, this is the news you’ve been waiting for.
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TUESDAY AUGUST 19
World’s Biggest Derivatives Exchange Is Born
With the approval of the Nymex-CME merger, the Chicago Mercantile Exchange has now realized its dream of becoming the most sprawling derivatives market...ever! This transaction not only gives it control of the dominant venue for global oil- and metals-futures trading, but also adds emissions trading, freight derivatives and even a laggard Middle East exchange. Oh, and did we mention that this deal puts it in charge of clearing roughly 98% of U.S. exchange-listed futures? Yeah, that too. Plus, by the look of it, this is only the first stage in its plan for eventual world takeover.
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MONDAY AUGUST 18
Quoth Of Noth: Long Or Short Capital
Need we really say more?
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MONDAY AUGUST 18
‘Fake’ News Realer Than Real?
It’s a strange world we live in when American news junkies are telling pollsters that they trust comedian Jon Stewart of The Daily Show – ahem, the FAKE news anchor – more than real journalists. But, judging by this story, that appears to be exactly what’s happening.
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MONDAY AUGUST 18
Wanted: Hedgers Not Averse To Candy
They’ll work for food, but what about sweets? Why Brice Russell, chief procurement officer for food group Mars – the candy company that brings us Snickers bars and M&Ms – is increasingly seeing food and consumer-goods companies fight over commodities traders with each other, as well as top trading houses. Ready to get inside the chocolate-covered blood wars?
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MONDAY AUGUST 18
Dollar Doldrums Return
Remember how, not long ago, the greenback advanced to its strongest level in almost six months versus the euro? And a seven-month high against the yen? Well, the honeymoon appears to be over. A sneak peek at what’s getting its goat today and whether the beleaguered currency has any shot at turning things around. At least in the near term.
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MONDAY AUGUST 18
Rumors Of Cooldown Greatly Exaggerated?
Perhaps not. While gold and crude may have posted some gains today, the commodities boom is definitely showing signs of fatigue and with global economic growth winding down – including in China – and demand for raw materials ebbing, here’s your official cheat sheet on the likelihood of commodities retesting this year’s highs.
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MONDAY AUGUST 18
Some Such Gibberish
According to Goldman and Morgan Stanley, the end of the four-year, 83% rally in the real is nigh. Why? Apparently, it’s got something to do with Richard Gere, Sarah Jessica Parker and Sylvester Stallone commercials. We’re not even kidding.
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MONDAY AUGUST 18
And He’s Ouuuuuut!
Pakistani stocks jumped on the announcement of the resignation of the nation’s wildly embattled president, Pervez Musharraf, who took the time today to avuncularly remind us that he’s stepping down out of the kindness of his own sweet heart – but only after droning on in mind-numbingly infinitesimal detail about how his precious nine years in office were so very special. Uncle Pervy, all we can say is, don’t let the door hit ya. Now, on to the good stuff: any wagers yet on whether Musharraf will be going into exile later today? As usual, we will be giving away a free car wash.
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FRIDAY AUGUST 15
Patrick Bateman, We Hardly Knew You
Walk around Wall Street these days and gone are the bankers implicitly saying by the threads of their suits and shape of their collars, “Mine’s bigger than yours.” How did it get to the point where the CEO in “business casual” got to dress as well as the mailroom guy or nerd in IT? Stop being meek, and go to your tailor, dammit!
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FRIDAY AUGUST 15
Mad Dog Out
For those days when you could just no longer stand CNBC in the afternoon, a quick flip to the YES network would bring up WFAN’s simulcast of “Mike and the Mad Dog.” But after 19 years of fielding calls with his paesano-in-crime Mike Francesca, “Mad Dog” Chris Russo is out at WFAN. So Vito from Staten Island and Frank from Lindenhurst will have to do with one less talking out on their drive home.
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FRIDAY AUGUST 15
So Much for “Flight to Quality”
Dollar down? Buy gold. Stock market down? Buy gold. Running to the bathroom too often? Buy gold. When there appears to be a return to normalcy? Sell. Down over 20% since its peak on March 17th, the world’s number one safe haven is proving that even the most staid investment can lose money too. And you have to wonder now, where is real estate and silver bull Robert Kiyosaki hiding out now?
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FRIDAY AUGUST 15
“If It’s Cheap, He’ll Buy It”
What isn’t Phil Falcone buying these days? After making a bundle in Cleveland Cliffs earlier this year, the face of Harbinger is going after another undervalued name, Cablevision. You have to be an absolute idiot son to run this cash cow into the ground… Oh right, we’re dealing Jim Dolan here, the poster child for the inheritance tax.
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FRIDAY AUGUST 15
Merrill’s UK Tax Bill? Zero
Sure, we can’t hire anyone. Sure, we said we didn’t need new capital before issuing the largest secondary stock offering in the history of the planet. Sure we sold some “cacata carta” (for you Latin geeks) for 22 cents on the dollar. BUT… We won’t be paying taxes in the UK for years!
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FRIDAY AUGUST 15
Somewhere Soros Is Smiling
After running up to a $2.11 last fall, the sterling is having one of its worst runs in decades, as the dollar strengthens and the traders speculate that the BoE will cut rates. Like the carry trade breakdown of last summer, the perfect storm has knocked the pound back to earth. But it has a long way to fall before tourists stop raiding retail shops stateside, as it’s still roughly $1.85.
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FRIDAY AUGUST 15
One Hand, One Million Dollars...
… Or, Meriwether, you could just pay my tax lien. What would John Gutfreund do for a hand of Liar’s Poker with John Meriwether right about now? Goodness knows he could use some quick cash to pay a $430,000 federal tax lien on his Fifth Avenue co-op. But knowing ex-LTCM boss, he’d up the ante to $10 million, forcing Gutfreund to cower, and pay the lien himself.
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THURSDAY AUGUST 14
The Truth About Georgia
First off, we have just discovered it’s not in the United States. Heh heh…just kidding. Kind of. But seriously, just how much do you know about the nation’s tacit role in ensuring that enriched uranium remains affordable for blue-collar Americans? Yep, that’s exactly what we thought. Good thing it’s Long or Short Capital to the rescue (again).
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THURSDAY AUGUST 14
European Economy Backs Up
For the first time since the launch of the euro nearly a decade ago, the European economy is backsliding. Gross domestic product edged lower by 0.2% from the first quarter, when it rose 0.7 percent, according to the European Union statistics office. But we’re over it already. Next up, a U.S. report on the state of consumer prices, which may or may not have some interesting things to say about whether July marked a mythic peak.
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THURSDAY AUGUST 14
That July’s Over, Thanks Be
If you believe the following accounts, hedge fund returns have been almost as disappointing so far this summer as the weather. But think about what happened last August – at least that can’t happen again. Can it?
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THURSDAY AUGUST 14
Merrill To Cut Dividend?
In the wake of $19 billion of losses, Merrill CEO John Thain vowed last week to maintain the firm's 35-cent quarterly dividend. Here’s why options traders don’t believe him.
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THURSDAY AUGUST 14
Nice Book ‘Pickens’
On the heels of the announcement that the first authorized book on Warren Buffett, the world’s richest man with an estimated $62 billion, will be out this autumn, comes oil man and billionaire investor T. Boone Pickens’s own life story, aptly titled "The First Billion is the Hardest." (And how.) More on the “chatty vignettes” Pickens believes represent key turning points in his climb to the top – defeats and triumphs alike.
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THURSDAY AUGUST 14
Bumps In Nymex-CME Deal?
Shareholders of Nymex, the world’s benchmark oil market, are supposed to vote on a hook-up with the world’s biggest futures exchange next Monday, but with an 11th-hour revolt afoot, coupled with a stock that’s moving like someone definitely thinks this deal is not happening, will the vote now be delayed?
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THURSDAY AUGUST 14
Wal-Mart Scores
When the going gets tough, the tough go shopping. At Wal-Mart. Get all your stats here on how this monolith faired during the fiscal second quarter (well) not to mention a great example of how American consumers never actually stop spending (ever). They just quit raiding Barneys for awhile in favor of Walton clearance sales. Expect the food-stamps-n-Prada look to soon be back in full effect – and not just in Newark’s Ironbound district.
> read more
WEDNESDAY AUGUST 13
T Bammed!
By
Chris Gillick
We can't get it right all the time. 80 year-old T. Boone Pickens, who has amassed a fortune in oil, hostile takeovers, and hedge funds, took a bath on falling oil prices in July. And it's not just other people's money like most hedge fund; half of it is his. But his philanthropy remains strong regardless. He continues to press forward with his Pickens Plan initiative to rid America of its dependence on foreign oil.
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WEDNESDAY AUGUST 13
Credit Suisse: Vengeance Is Theirs
What do you do when it takes you more than a month to figure out a bunch of your trusted structured credit traders have played a little price trick on you? We say you should play a little trick back. But maybe take care of that resulting multimillion-dollar fine and multibillion-dollar loss first…
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WEDNESDAY AUGUST 13
Corn: What’s The Rumpus?
Contrary to what some believed, the worst flooding in 15 years of the U.S. corn crop does not a cruddy corn yield make. In fact, if you believe the latest stat out there, we’re in for the second-largest avalanche of corn ever. So take that, you tortilla-eating naysaying moaners.
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WEDNESDAY AUGUST 13
Buffett Bio Countdown: 48 Days
Get ready to pee all over yourself: the greatest story ever told will be out Sept. 29. And not to overfroth, but we’re already putting the finishing touches on the red velvet pillow and surrounding red velvet ropes in the offices of Trader Monthly where our copy of the book will lie.
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WEDNESDAY AUGUST 13
Hunter To Hunted To Hunter, Again
Add to the list of the top commodities czars (and at least one czarina) a guy you never thought you’d hear good news from again: Brian Hunter, the guy universally blamed by the quote-unquote powers that be for the felling of Amaranth, seems to have scored himself the kind of big win that helped him make his name before his fall from grace.
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WEDNESDAY AUGUST 13
Cotton-Pickin’ Conundrum?
Imagine the stunned silence of cotton merchant, Alan Underwood, upon waking up, flipping on his computer in the middle of the night and finding that cotton had unexpectedly climbed into the stratosphere – far above the price at which he had agreed to sell. And yet for days, he could find no news to explain it, no changes to the underlying fundamentals. What to do?
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TUESDAY AUGUST 12
Don't Mess With Texas!
By
Chris Gillick
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TUESDAY AUGUST 12
Arisen From the Ashes
By
Chris Gillick
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TUESDAY AUGUST 12
Kissing Up To McCain
Because making fun of one presidential candidate is as good as making fun of another…
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TUESDAY AUGUST 12
Quoth Of Noth: Ex-Enforcement Lawyer
"On CSI Wall Street, the options are the DNA," says Brent Baker, former lawyer with the Securities and Exchange Commission’s enforcement division, to Bloomberg News (referring, obviously, to the television series, "Crime Scene Investigation”). And yet you know that combing through this so-called DNA behind the felling of Bear Stearns is going to be no small cakewalk. Inside the debacle – and what will have to happen before anyone can get to the bottom of how the bank met its maker (or, suffice to say, its taker).
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TUESDAY AUGUST 12
UBS: A Little Experiment?
Science has proven that splitting the right and left hemispheres of the brain in seizure patients doesn’t really much change their behavior – but then again, that’s not really the same thing as a bank dividing its investment banking and wealth-management divisions…Is it?
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TUESDAY AUGUST 12
Debt Market Tremors
Like to play with fire? Nothing wrong with that. Probably it’s why you became a trader in the first place. But if your poison of choice happens to be the leprous corporate bonds and securities backed by consumer loans and mortgages, here’s the sectors where you might want to exercise just a smidgen of extra caution.
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TUESDAY AUGUST 12
The Indefatigable Rise – And Fall?
The ruble leapt the most in seven years, as Russia's Micex Index punched higher and the cost of protecting the nation’s bonds slumped after President Dmitry Medvedev ordered a halt to the military operation in Georgia. Great. But what the heck is up with oil prices? A breakdown for your edification.
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TUESDAY AUGUST 12
Not To Get All Negative, But...
After the latest on UBS and Wachovia (and Bear and Morgan Stanley and Lehman – eh, need we go on?) the best thing we can find to say about the banks today is that although they are still slashing jobs at a head-spinningly brisk pace in New York and London, they are also adding to positions in India, China and parts of the Persian Gulf (so if you still want to find work, try going there). Not good enough? Billionaire value investor Michael Price agrees – and he’s got a slate of bank-breaking bets on banks to prove it.
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MONDAY AUGUST 11
Former Bear Investors Sue for $2.5 Billion in Damages
Bear Stearns Cos Inc failed to negotiate hard enough to get the best deal before its frantic fire sale to JPMorgan Chase & Co., a lawyer for former Bear shareholders seeking about $2.5 billion in damages told a judge on Monday.
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MONDAY AUGUST 11
NYS AG Seeks Auction-Rate Pacts With 3 Banks
New York Attorney General Andrew Cuomo's office, which is investigating Wall Street's sales practices in auction-rate securities, told JPMorgan Chase & Co, Morgan Stanley and Wachovia Corp on Monday that it wants to begin settlement talks immediately.
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MONDAY AUGUST 11
Adding Value To Scorned Relationships
By
Chris Gillick
Imagine this scenario.
You recently got engaged...then the subprime crisis you got fired. The job market is tough, and for your fiancé, the grass has all of a sudden become greener elsewhere. (Remember, technically she hasn't said "'til death do is part" yet.) She hands back the ring, and trying to at least salvage yourself financially, you return to the jeweler. He says "I'll give you 30 cents on the dollar." Hurt again, the deep discount digs deeper into your soul. But there is now hope...www.idonowidont.com. For a 5% commission, chances are you can get back a lot more.
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MONDAY AUGUST 11
Monday Lesson: Be On Time
Punctuality is of the utmost importance, even if you are by nature a punctual person. But Rey Robinson, an Olympian from the 1972 games, missed out on his chance on gold because well, he (or rather his coach) had forgotten that 90% of life is showing up. “The irony is, I've been punctual my whole life,” he says.
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MONDAY AUGUST 11
Now Private Equity Firms Can Really Own Everything
Most of the time, private equity firms execute buyouts by buying their namesake, EQUITY. But as banks continue to deleverage and move risky assets off their books, and PE firms look for new ways improve shareholder returns, those firms are moving up the capital structure, buying the very debt that finances their buying the equity.
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MONDAY AUGUST 11
“They Haven’t Failed Yet, So We Won’t Bail Them Out”
Hank Paulson will stop short of funneling cash into Fannie and Freddie for now, despite a combined $3 billion in losses announced last week. However, Paulson is nice enough to stick around for a while when his successor at Treasury comes around next year, and will provide guidance to the mess that he inherited.
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MONDAY AUGUST 11
...Though Not So Fast
Anxious to keep one of its star traders from fleeing, Fortress granted Trader 100 member Adam Levinson a $300 million stock grant. The grant dilutes current shareholder’s equity by 7% and sets precedent for possible future grants to come.
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MONDAY AUGUST 11
So Much for That Nine Figure Paycheck…
In 2007, hedge fund managers brought home mountains upon mountains in performance fees, with dozens taking home nine figure paychecks and drawing comparisons to the robber barons of the early part of last century. Well, some of them might just have to live off their 2% management fee this year, as breaking even is like the new “up 25% after fees.”
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MONDAY AUGUST 11
Who Did It?
So who placed the $1.7 million bet on March 11 that brought down Bear Stearns? This morning’s article doesn’t name names, but potential subpoenas sure can. Apparently one well-informed insider decided to buy some “bankruptcy puts” just a few short days before the Bear went under. Peter Chepucavage, a former general counsel for compliance at Nomura Securities and onetime SEC lawyer, said the Bear Stearns bets were neither smart nor lucky. “When you buy $5 strikes when the stock is trading over $50, you either have to be manipulating, or you have to have insider information,'” said Chepucavage, who's now with Washington-based Plexus Consulting.
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FRIDAY AUGUST 08
More Equities Talent Hits the Unemployment Line
By
Chris Gillick
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FRIDAY AUGUST 08
Will Druckenmiller Get Voted Off The Island?
In his quest to take a controlling interest in his beloved Pittsburgh Steelers, Duquesne Capital's Stan Druckenmiller faces a formidable obstacle: existing NFL owners. With current Steelers owner Dan Rooney considered the most respected and influential owner in this elite circle of 32, he simply has to gather the support of eight friends to block a purchase, which requires approval 24 of 32 owners.
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FRIDAY AUGUST 08
Speaking of Attractive Women…
Hedge Fund Hotties have long had a leg up in the job application process, edging out their less genetically endowed counterparts for years. In addition, should their male bosses ogle over them too much, a sexual harassment lawsuit is there’s to be won. High risk, high reward from the fund’s perspective. Not so in Russia. There the risk of a suit is much more mitigated, with all of the upside.
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FRIDAY AUGUST 08
Take a Report Guy Fired
Blogging at work can be an innocent respite from the toil of the trading day, especially when you post pictures of near nude women. But do so at your own peril, as somehow the bosses always find out.
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FRIDAY AUGUST 08
Another Swift Boat?
Democratic Presidential nominee Barack Obama is getting some much needed R&R in Hawaii next week. Some advice if he wants to win… Don’t go windsurfing. Thinking he was a man of the people by windsurfing on Nantucket four years ago, John Kerry was later seen as an elitist preppy who stretched the truth regarding his Vietnam duty. Let’s just say election day didn’t go as well as he would have hoped.
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FRIDAY AUGUST 08
“We Overpaid for ABN Amro… and Oh Yeah, We Lost 761 Million Pounds”
For the first time in 40 years as a public company, the Royal Bank of Scotland has recorded a quarterly loss on the back of nearly 5.9 billion pounds in subprime writedowns. In addition the top brass admit that they overpaid for ABN Amro when they outbid Barclays, along with Banco Santander and Fortis, last year.
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FRIDAY AUGUST 08
“We Can Actually Travel Abroad and Drive Again?”
After nearly eighteen months of unabashed GBP/USD strength, at once running up to 2.11, the pound fell below 1.93 for the first time yesterday. A likewise pattern emerged for the EUR/USD, which fell below 1.52. The good news? Oil fell below $118, down from a high of over $147.
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FRIDAY AUGUST 08
Medallion Rocks Out… Again
Does this guy ever miss? Renaissance Technologies quant guru Jim Simons never seems to fail with his famed Medallion Fund, up 48% through July AFTER 5-and-44 fees. (Word on the street is that employees pay a discount of 5-and-36.) On the other hand, his long biased Institutional Equities Fund has seen tons of money fly out the door, as it is down to $15 billion under management from a high of $28 billion.
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THURSDAY AUGUST 07
Citigroup to Buy Back $7 Billion of Auction-Rate Debt
Citigroup Inc agreed to buy back more than $7 billion of illiquid auction-rate securities and pay a $100 million civil fine to settle charges it marketed the debt fraudulently.
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THURSDAY AUGUST 07
Energy Crisis Solved – By Paris Hilton
If you’ve not seen this yet, it either means you were taking a bath in Siberia all week (and, therefore, completely unreachable) or you just have no friends at all who e-mail you anything. The following is a real John McCain ad, followed by a “real” rebuttal from Paris Hilton, who, incidentally, also solves the world’s energy-security quandary. Nice.
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THURSDAY AUGUST 07
Hedge Fund Guy Walks Into An Investment Bank...
Not sure if we strictly approve of the ripping off of a Monty Python skit just to illustrate the extent of upheaval now being experienced by the CDO market. But, then again, we suppose you’ve got to start somewhere, especially when trying to explain these things to the peanut-munching crowd. Allowing points for creativity – despite the obvious ennui-gone-amok aspect – read on.
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THURSDAY AUGUST 07
On Your Mark, Emissions Traders
A reliable system for tracking the use of carbon credits has been ridiculously long in coming, but soon you will know exactly who’s doing what – and, as they say, knowing is half the battle. (We don’t know what the other half is.)
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THURSDAY AUGUST 07
Loaded Question
How’re your trades faring so far this year? If you were handling Harvard’s $35 billion endowment, you’d definitely be having something to smile about. (And not just because you’d be trading that kind of lumber, either.) Apart from the challenge of posting any sort of significant gain while toting that kind of bulk, the university reportedly had a strong showing for the fiscal year ending in June. A sneak peek at an Ivy League playbook.
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THURSDAY AUGUST 07
A Coffey Doesn’t Come Along Every Day, You Know
Sometimes, a hotshot trader is so great, you just can’t replace him with another hotshot trader. Such is the case with Greg Coffey, outgoing superstar of hedge fund GLG, which searched far and wide for a successor. The verdict? One Coffey, apparently, equals two senior traders from Morgan Stanley (as it so happens, global co-heads of its emerging markets desk). With any luck, the twosome will waste no time in pulling the flagship fund from the throes of its worst-performing month ever, which it just reported.
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THURSDAY AUGUST 07
Breakup Of Most Successful Hedgie Duo Ever?
How do you tell someone after 15 years you want to split? As much as it hurts in marriage, we imagine it might hurt a good deal more after raking in, oh, $18 billion together. That said, here’s why Paul Tudor Jones, the 53-year-old trader-billionaire who started world-famous Tudor Investment Corp. back in 1980 – when hedge funds were still largely unknown – and veteran stock picker James Pallotta, whose Raptor fund has been hemorrhaging money, may soon go their separate ways.
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WEDNESDAY AUGUST 06
One-on-One with Ari Kiev
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WEDNESDAY AUGUST 06
How To Set Up Your Own Hedge Fund
By
Chris Gillick
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WEDNESDAY AUGUST 06
The Greatest Trading Story Ever Written
By
Chris Gillick
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WEDNESDAY AUGUST 06
Icahn: Overwhelmed No More?
While juggling battles on a number of fronts (read: fighting everything from boards in particular to tyranny in general) was never too draining for the billionaire activist investor, what seems to have broken the camel’s back was the daunting rigors of the regular maintenance of his new blog. Good thing he’s found someone else to take care of that for him.
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WEDNESDAY AUGUST 06
Japan: Party Is Over
If you are a yen hound, here’s why you might want to take under advisement a few choice remarks the nation’s head of business statistics at the Cabinet Office had about the economy today.
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WEDNESDAY AUGUST 06
Yuan Unstoppable?
Why China's well-publicized, upward adjustment of the yuan against the dollar has made its currency one of the few sure bets in global financial markets…But it isn't just Hong Kongers clamoring for it. Many investors see it not only as a good trade, but as a matter of survival. A closer look inside this burgeoning market and the traders who are eagerly harnessing its magical powers.
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WEDNESDAY AUGUST 06
Scrambling After Crude’s Dive
From Latin America to Saudi Arabia, how traders, banks and producers alike are stepping up their game to lock in the high price of crude before it has a chance to tumble further – and, in the process, making some big waves in the options and insurance markets.
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WEDNESDAY AUGUST 06
UBS: Call That Says It All?
According to a tattler today, on May 19, shortly after 52 UBS employees had just left to join Goldman-backed wealth manager Vestra, Richard Wayne-Wynne, an investment director, telephoned a client, identified as “George,” to inform him of the mass resignations. What transpired during that call was more than a little revealing.
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WEDNESDAY AUGUST 06
Xstrata’s Ambush
If events-driven trading is your bag, you could get a lot of play out of the drama now unfolding between this Swiss mining giant and the platinum producer it’s going after (with a cool $9.8 billion in tow, no less). And you were just telling your entourage last night how the commodities craze was so last month...touché to you. Too bad for the latter, it’s a surprise attack. But sometimes, that is exactly how we like it.
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TUESDAY AUGUST 05
It Wasn't Me!
By
Chris Gillick
Steve Rattner, forced out of Credit Suisse's DLJ Merchant Banking
division over a bygone affair exacerbated by an Internet smear campaign, is giving those of the same moniker a bad rap. The "other" Steve Rattner, managing director at the Quadrangle Group, and manager of New York Mayor Michael Bloomberg's blind trust, is pleading with his peers in the same fashion as pop star Shaggy, "It wasn't me!"
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TUESDAY AUGUST 05
Best Invention...Ever
It’s finally out: the X-ray friendly laptop bag. The thing that will spare you from screaming and being screamed at every time you enter an airport-security checkpoint. But where can you get one of these new-fangled items? And just who is the mysterious ex-Air Force pilot who’s selling it?
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TUESDAY AUGUST 05
Another Fund Scrapped
