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November 25, 2008 in Off the beaten track | Permalink | Comments (0) | TrackBack (0)
November 25, 2008 | Permalink | Comments (0) | TrackBack (0)
If legislation were to be enacted by the US Congress to treat carried interest as ordinary income rather than as capital gain for US federal income tax purposes, such legislation would materially increase the amount of taxes that we and possibly our equityholders are required to pay, thereby reducing the value of our common units and adversely affecting our ability to recruit, retain and motivate our current and future professionals. Senator Barack Obama, the President-Elect, has publicly stated that he supports similar changes to the tax code.
November 24, 2008 in Annals of Dubious Causality | Permalink | Comments (0) | TrackBack (0)
November 24, 2008 in Off the beaten track | Permalink | Comments (0) | TrackBack (0)
...Mosley with vacations, tickets to sporting events, expensive meals, all-night drinking excursions, limousine rides, plane tickets, golf outings, and the use of condominiums and houses belonging to the brokers...
...These inducements went far beyond typical or acceptable levels of client entertainment measured by the value of the gifts and favors offered, the frequency of the offers, the proximity of the offers to sales, the implicit quid pro quo nature of this entertainment, and the extent of the debauchery involved in many of the events.
The planned dinner meeting between Folan, de St. Phalle and Mosley took place on March 1, 2006, at Entourage, a restaurant owned by a friend of Folan in Schaumburg, Illinois. At about 3:00 pm, Folan had a limousine pick Mosley up at his office in Northbrook and drive him downtown, where he met Folan at a bar in the Rush Street area for drinks. Then, Folan hired a limousine to take them to Entourage with de St. Phalle and others. After dinner, a limousine transported Mosley and the others back to downtown Chicago for a drinking binge that lasted until about 5:00 the following morning. And finally, Folan hired a limousine to take Mosley home to Vernon Hills.
November 20, 2008 in DisCredited, FlimFlam Update, Sentinel Blooms | Permalink | Comments (0) | TrackBack (0)
November 20, 2008 in Connecticut Life, Unsolicited opinions | Permalink | Comments (1) | TrackBack (0)
November 18, 2008 in Core competencies, Shorting Controversy | Permalink | Comments (0) | TrackBack (0)
President-elect Barack Obama will soon face the extraordinary task of saving capitalism from its own excesses, much as Franklin D. Roosevelt had to do 76 years ago.
First, we must confront head-on the pervasive misunderstanding of what constitutes a "free market"...One of the great advantages U.S. capital markets have enjoyed over the decades has been the view — held worldwide — that there was an underlying integrity to the representations market participants made, because the regulatory framework in which they were made was believed to provide genuine oversight. But as we all know, the laws requiring such integrity are meaningless without a government dedicated to enforcing them...
Second, our corporate governance system has failed. We need to reexamine each of the links in its chain. Boards of directors, compensation and audit committees, the trio of facilitators (lawyers, investment bankers and auditors) whose job it is to create the impression of legal compliance, and shareholders themselves all abdicated their responsibilities...
Finally, we need to completely overhaul the federal financial regulatory framework...
Although mistakes I made in my private life now prevent me from participating in these issues as I have in the past, I very much hope and expect that President Obama and his new administration will have the strength and wisdom to do again what FDR did.
November 17, 2008 in Regulators, Today's reading | Permalink | Comments (0) | TrackBack (0)
ABOVE: Webster Bank executives help themselves to $400 million from the Kash’n’Kari Capital Purchase Program.
Michael Sheahan, senior vice president in charge of mortgage lending for Webster, said there are approximately 400 mortgages — worth $40 million to $60 million — that could qualify for the moratorium. “Roughly one-third or less are in some form of foreclosure,” he said.
November 17, 2008 in Connecticut Life, DisCredited | Permalink | Comments (0) | TrackBack (0)
The final agenda for Thursday night’s meeting of the Green[r]ich Planning and Zoning Commission, available on the commission’s web site, states that Mr. Cohen...and his wife, Alexandra, are applying for a special permit to add another 1,145 square feet, give or take a few square inches, to their house on Crown Lane.
November 17, 2008 in Connecticut Life | Permalink | Comments (0) | TrackBack (0)
With the G-20 leaders assembled in the capital, The Washington Post advises:
November 16, 2008 | Permalink | Comments (1) | TrackBack (0)
Everyone’s worried that hedge fund investors will pull their money out en masse and ignite another market selloff. That's not how it looks to one insider.
Barton M. Biggs believes “hedge-fund mania now grips the US and Europe.” It is “rapidly assuming all the classic characteristics of a bubble,” contended the chief global strategist and chairman of Morgan Stanley Investment Management Inc, New York, in a Global Strategy report to clients. [Emphasis added]
Hedge funds started a year ago by a leading investment strategist, Barton M. Biggs, have been stung by losses this year, partly because of a bearish bet on the price of oil at a time when the commodity’s prices are setting records...Yesterday, crude oil for September delivery settled at a record $48.70 a barrel on the New York Mercantile Exchange. Futures prices have climbed more than $10 a barrel since the end of June.
In his letter to investors, Mr Biggs said he thought the price of oil should be closer to $30 to $34 a barrel. So convinced is Mr Biggs of his investment thesis that he increased the size of his bet in July, even as prices were rising. “When the price of an investment goes against us, unless the fundamentals have changed, our inclination is to buy more,” he said in the letter. [Emphasis added]
Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market...
...We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now. [Emphasis added]
November 13, 2008 in Core competencies, DisCredited, Unsolicited opinions | Permalink | Comments (1) | TrackBack (0)
November 13, 2008 in Unsolicited opinions | Permalink | Comments (0) | TrackBack (0)
I know you are not a scholar but if you check with NakedShorts’ Ivory Tower division staffers, they just might be able to use the Obviousness Rule in reading this scholarly article. Apparently, the earth-shattering finding is that the TARP bailout was a net transfer of wealth from taxpayer to bank stakeholders, with some money lost on the margin due to friction costs.
Abstract
We calculate the costs and benefits of the largest ever U.S. Government intervention in the financial system. We estimate that the revised Paulson plan increased the value of banks’ financial claims by $109 billion at a taxpayers’ cost of $112 -135 billions, creating no value in the banking sector. We compare the cost of Paulson’s plan with the costs of alternative solutions that would have achieved the same objective in term of solvency of the banking system. We find that the revised Paulson plan is the most expensive for the taxpayers, second only to the original Paulson plan. The biggest beneficiaries of this massive redistribution were the debtholders of financial institutions, especially those of the three former investment banks and of Citigroup. The equity holders just broke even. [Emphasis added]
November 12, 2008 in Core competencies, DisCredited | Permalink | Comments (0) | TrackBack (0)
Goldman Sachs Group Inc, the Wall Street bank that cut 3,200 jobs last week, identified six equity analysts fired by the firm, including William Tanona, who covered companies such as JPMorgan Chase & Co., and Deane Dray, who followed General Electric Co.Charles Chon, Ajay Kejriwal, Lawrence Keusch and Peter Wahlstrom also left, according to a note the New York-based firm sent to clients. The companies they covered are being dropped, suspended or reassigned. Goldman announced the departure of seven other analysts in a Nov. 5 note.
November 12, 2008 in Today's reading | Permalink | Comments (0) | TrackBack (0)
November 11, 2008 in DisCredited, Regulators, Unsolicited opinions | Permalink | Comments (0) | TrackBack (0)
So they’re gonna spend it, instead of socking it away:
November 10, 2008 in Unsolicited opinions | Permalink | Comments (0) | TrackBack (0)
The FDIC estimates that the cost of [the Franklin Bank] transaction to its Deposit Insurance Fund will be between $1.4 billion and $1.6 billion.
Continue reading "Failure Friday™ twofer takes down Ranieri" »
November 10, 2008 in DisCredited, Regulators, Unsolicited opinions | Permalink | Comments (0) | TrackBack (0)
That ‘nation of whiners’ thing is really catching on.
The Independent Connecticut Petroleum Association joined a host of oil heat dealing associations in the region to ask for loans to help the dealers buy out expensive [heating] oil contracts purchased this summer and help consumers into lower-cost contracts...
...Eugene Guilford Jr., ICPA executive director and chief executive officer, said in a letter to Treasury Secretary Henry Paulson:
“We now have millions of consumers who locked-in their prices at over $4.50 a gallon this summer who now see a retail price substantially lower than that. The only way our retail companies can swap out their higher-priced wholesale futures contracts for newer, lower-cost supply agreements is to literally buy their way out of them and pay their wholesalers.”
Patience, little grasshoppers. We’re just a decent cold snap, a geopolitical thingamajig, China back in the game and Evil! Speculators! getting back their mojo away from the old highs. And anyway, losing money on your hedges is a good thing. Or so I’m assured.
November 10, 2008 in Commodities | Permalink | Comments (0) | TrackBack (0)
November 10, 2008 in Off the beaten track | Permalink | Comments (0) | TrackBack (0)
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