The Epicurean DealmakerThe Epicurean DealmakerAn occasional review and commentary on the wild and wacky world of mergers and acquisitions, from an enabler's point of view. Articles
True Story
2007-12-07 16:02:00 A recent DealBook article questioning the independence of fairness opinions made me chuckle yesterday. It also made me recall an incident from my halcyon past, when I was a bright-eyed, bushy-tailed young investment banker deeply involved in a rather large and rather prominent merger between two publicly traded companies.As is sometimes the case, the proposed merger had come about in a rather circuitous fashion. My client had been talking to a smaller third party about acquiring them when the eventual merger partner intervened in an attempt to prevent the acquisition. (They wanted control of the small fry themselves.) The two CEOs met over brandy and cigars to hash out a compromise, one thing led to another, and they both decided they had so much in common they set a wedding date right there. We bankers were called in the next day to paper over the deal and put lipstick on the pig, but the particular porker had already been picked out.For various reasons I will not bore you wit... More About: Story , True Story , True
Lis Pendens
2007-11-21 14:35:00 I guess Stephen Feinberg has finally gotten tired of being United Rentals' punching bag. Yesterday he sent his attack puppy Mark Neporent to disabuse The Wall Street Journal of the "outrageous spin and misinformation" being bandied about by spurned buyout target URI over their disputed merger agreement. The article recaps the issue at hand:At the heart of the dispute is another arcane M&A term that has taken new meaning as the credit crunch turns the deal world on its head. This one is called “specific performance,” and refers to the ability of a seller to force a buyer to complete an agreed-to buyout.Cerberus points to a line in the merger agreement that says, in part: “In no event…shall [Cerberus or affiliates] be subject to any liability in excess of the” $100 million breakup fee. People in the URI camp say that interpretation ignores the specific-performance language in the same document that a judge will also take into account and which they say will force Cerberus...
Shotgun Wedding
2007-11-20 04:30:00 This should be interesting.United Rentals, Inc. filed a lawsuit today in the Delaware Chancery Court to compel Cerberus Capital Management to go through with its agreed $34.50 per share take-private of the company. The $7 billion planned wedding began to look a little shaky last Wednesday, when Reuters began running stories hinting that Cerberus was getting cold feet and might walk away from the deal.It turns out that the prospective groom delivered a "Dear Sally" letter to URI that very day, explaining that he just wasn't ready for marriage, but was willing to try a little experimental cohabitation (at a lower price) instead. If URI did not agree, Cerberus made it clear he was ready to send a really nice box of chocolates (and $100 million wrapped up in a bow) as a farewell present, "no hard feelings."Apparently the would-be bride, surrounded by hundreds of wedding reception centerpieces, custom printed cocktail napkins, and a two-hundred pound melting ice sculpture of Rodin's ... More About: Wedding , Shotgun
Resistance Is Useless!
2007-11-15 00:12:00 And then, one Thursday, nearly two thousand years after one man had been nailed to a tree for saying how great it would be to be nice to people for a change, one girl sitting on her own in a small café in Rickmansworth suddenly realized what it was that had been going wrong all this time, and she finally knew how the world could be made a good and happy place. This time it was right, it would work, and no one would have to get nailed to anything.Sadly, however, before she could get to a phone to tell anyone about it, a terribly stupid catastrophe occurred, and the idea was lost forever.This is not her story.— Douglas Adams, The Hitchhiker's Guide to the GalaxyWhere are the Vogons when you need them?* * *I was thrilled to find out today that the bright bulbs at Pardus Capital have discovered how to make the world a good and happy place, and—unlike Mr. Adams' unfortunate girl in Rickmansworth—they were actually able to make it to a telephone (or an e-mail s... More About: Useless , Resistance
Ave atque Vale
2007-11-09 02:31:00 Well, Percy Walker has taken his marbles and gone home. We citizens of the blogosphere are the poorer for it. (Approximately $10.4 billion poorer, if you take Ol' Perce at his word.)This is a bad thing, in my opinion. Percy was "the world's foremost authority on the proper tax treatment of carried interest," in his own words, and it is always a great loss to the public weal when the leading theorist on a contentious social issue is forced to leave the field due to a few overzealous Spitzer wannabes. I would much rather have watched Percy and Vic "Carrot Top" Fleischer continue to mud wrestle over the issue and bite the occasional chunk out of each other's ear lobe. Everybody loves a good fight.I suppose it is a sign of the maturation of the issue of private equity taxation that things have taken such a turn. Realizing that the private equity industry has no more than three actual friends on Capitol Hill (out of a total of 54 lobbyists and six dogs), Carlyle's David Rubenst... More About: Vale
Being Bruce Wasserstein
2007-11-08 01:52:00 Once again, I am sorry for any disappointment I may have caused my Faithful Readers for another extended absence, but I have been busy trying to persuade some Europeans and other unwashed furriners to use their ridiculously inflated currency to put a number of my US clients out of their undercapitalized misery. Attention K-mart shoppers, Blue Light Special in Aisle 3: Corporate America! Of course, being the upstanding patriot you know me to be, I refuse to accept payment of my fees in anything other than small-denomination pound notes, FOB the Isle of Man.Anyway, in between moving assets frantically off shore, I dropped by The Deal's 2008 M&A Outlook conference in New Amsterdam today for a few giggles. A marquee list of the Great & Good—along with the usual admixture of shills and sponsors—trotted out the usual platitudes about the M&A market and its imminent climb to $50 trillion in volume any month now. A few people distinguished themselves by not making complete ... More About: Bruce , Wass
Down the Rabbit Hole
2007-10-27 15:46:00 It's a rainy day here in Manhattan. Perfect weather to stay in and read a good post on the "Demise of the Quants" by my fellow bloggist and tetchy ranter Baruch over at Ultimi Barbarorum1. Fire up the coffee pot, break out a dictionary, and read it. You'll learn something.Unless he2 is actually perma-deb Tinsley Mortimer playing an incredibly elaborate joke on us all3, Baruch appears to invest in equities for an unnamed Swiss financial institution which shall remain nameless. (I will give him the benefit of the doubt and credit for his obvious native intelligence to conclude that it is not my favorite Schweizerdeutsch whipping boy, UBS.) He writes in reaction to a semi-triumphalist article on the quant meltdown this August in MIT's Technology Review magazine and his own informed reflections.Most of what he says rings true, and—best of all—unlike Your weasely little ticket-scalping middleman Faithful Correspondent, he actually appears to invest for a living and th... More About: Hole
Dead Man Walking
2007-10-26 23:50:00 The New York Times tells us today that the Board of Directors of Merrill Lynch is placing collect calls to a number of Wall Street personalities to gauge their interest in taking over the CEO position from current tenant Stanley O'Neal. You know, Dear Readers: that same Stan O'Neal who just announced the largest quarterly loss in Wall Street history, after projecting somewhat less than half the actual amount only weeks before, and who capped it all by going hat in hand to Wachovia begging them to consider a prophylactic merger. "Wachovia?," you ask. Yes, Wachovia.Apparently the house of Pierce, Fenner & Smith has not sunk low enough for the MER board to tolerate this. O'Neal's handpicked director poodles are so upset that great clumps of their manicured curls are coming off in their jaws, and they are baying (privately) for O'Neal's blood. Not privately enough, of course, to prevent the entire financial media from picking up the story.I cannot speculate what will happen n... More About: Dead Man , Walking , Dead
Recipe for Success
2007-10-19 21:00:00 For your reading pleasure this weekend, O Faithful Acolytes, I have decided to pen a little riff inspired by the scandalette du jour now working its way through the twinned pythons of New York Society and the Oprah Winfrey Show audience. I do not speak of the minor éclat caused by news that un-French French President Nicolas Sarkozy and his wife of 11 years have finally divorced—"How quaint! How ... American!" No, I refer to that titillating mini-saga emerging from the seething cesspool known as childrens' cookbook publishing, what many are coming to call "L'affaire Seinfeld."I will not bore you with the tawdry details of this dust-up, which you can read for yourselves in the Times article by Motoko Rich. (Now there's a name for you!) Suffice it to say that Jessica Seinfeld (pictured above), wife of the eponymously named comedian Jerry Seinfeld (how do they tell their bathroom towels apart?), and her publisher Harper Collins have been not-quite accused of not-qu... More About: Recipe , Success , Reci
Oxymoron
2007-10-13 16:50:00 I have been much too busy, Dear Readers, raping and pillaging making hay while the sun shines these past weeks to entertain you with any pearls of wisdom, and for that I do apologize. There seems to be a mad sort of Morris Dance taking place in the capital and M&A markets right now, with the storms and alarums of August faded to but a distant memory in the minds of many market participants. Accordingly, my services as mercenary consigliere have been in high demand. I fear it will all end in tears, but as I am not paid ridiculous amounts of money to salt away Kleenex for the bleary morning after, I must soldier on and do my duty by helping various consenting adults do the nasty.One recent bit of news has tempted me to stick my head up from my spider hole, however, if only briefly. I write, of course, of the recent management reshuffles at Citigroup. I will not rehash the endless commentary, both professional and amateur, that has been lavished on this little soap opera, but I wi... More About: Oxymoron
Aw, Shucks
2007-09-30 20:05:00 Apparently TED has been anointed a charter member of the "Econoblogosphere." Thanks, Felix.It is certainly flattering to be included in such eminent company, and I suppose I should not look a gift horse in the mouth, but I worry a little for some of Felix's readers who come to this site with no preparation other than his brief characterization. After all, he lumps your Tetchy Correspondent in with "The Finance Geeks," whom he describes as "translating Wall Street gobbledegook into English." Faithful Readers of this site know rather that my aim and design is to translate Wall Street gobbledegook into English gobbledegook. Besides, I think it would be much more fun to be sitting in the back row throwing spitballs with "The Snickerers." If only they could learn how to spell.Oh, well. Do not despair, Dear Readers: the newbies will soon leave, bedazzled and befuddled, and we will have our limited-distribution blogo-nicheo-microsphere back to ourselves. Just remember our watchword...
Confidence Game
2007-09-29 05:30:00 Is it just me, or is the sound of whistling getting louder in here?Helen Thomas from FT Alphaville told us earlier this week that the market mavens at UBS have declared the imminent health of the mergers and acquisitions market. Apparently, these Pollyannas took a gander at previous disruptions to the global financial markets—like the US savings and loan crisis and the implosion of Long-Term Capital Management—and have concluded there is no reason to speculate that this time things will be other than just peachy.Sure, the sudden freeze in the credit markets has put the kibosh on free money masquerading as "covenant lite" debt, and the maximum feasible deal size for prospective LBOs has plunged over 80% to seven billion smacke(u)roos, but all else is for the best in this best of all possible worlds, according to our lederhosen-wearing pals. To what is their optimism due? Well, to the faithful corporate M&A buyer, of course, who they are sure is even now sprinting up to... More About: Game , Confidence
Moral Fiber
2007-09-21 01:00:00 I saw a really promising article about hedge fund managers and real estate in The New York Times yesterday, and I thought, "Goody! Now we can see how the hedgies are adjusting to the new market realities."I settled in with my coffee and roll for a nice helping of Sturm und Drang, a great wailing and gnashing of teeth, and a clash of Titans as the Irresistible Force of Hedge Fund Ego smashed against the Immovable Object of New York Real Estate. Instead, I got Woody Allen and Alan Alda bickering over the script of The Four Seasons.So the pressure begins to build, and eventually, said Andy Kessler, a former hedge fund manager, “you stop spending.” Why? Fear, mostly.“You worry about redemptions,” Mr. Kessler said, “you worry about margin calls, and you worry about working for free. Down 7 percent may be no big deal, but when your investors say, ‘Get me out,’ you have to sell everything.”After years of eye-popping returns, sudden losses can be wrenching. Aware of the ps... More About: Fiber , Moral , Mora
Rénmínbì
2007-09-20 15:14:00 That's a relief.With the courteous assistance of those clever Dutch over at greatfirewallofchina.org, I just tested whether TED has been blocked from viewing by the teeming hordes of Communist China. It has.Up until this morning, I was beginning to worry that my snarky little posts pointing out the fraud, follies, and shenanigans in our lovely financial markets were beginning to disabuse all those budding criminals capitalists of their childlike hope in the future of the global market economy.Fortunately, the Maoist-Confucian Society for Right Thinking has banned access to these pages by its citizens, no doubt along with all the other dreck and drivel collectively lumped under the domain "...blogspot.com." Therefore, we can safely conclude that China's direct and indirect investment in The Blackstone Group, various hedge funds, and that special form of crack cocaine known as residential real estate is safe from imminent withdrawal.Feel free to breathe a sigh of relief that the G...
Go West, Young Sheik
2007-09-13 00:05:00 Greg Corcoran over at the WSJ DealJournal has a cautionary message today for US investment banks already reeling from subprime contagion, LBO "pier" loans, and an M&A market gone AWOL: The Arabs are coming.According to this eFinancial News story, Dubai’s ruling sheik will open an investment bank that will compete in the Middle East and Africa and eventually move in on Europe and the U.S. You might want to remember the name: Al Noor Islamic Bank.I don't know why. The trashbins of Wall Street are cluttered with the names of foreign commercial and investment banks that tried and failed to make a go of it in the cutthroat US market. Every few years or so—usually during an extended upswing in the markets—yet another bright-eyed foreigner gets a hard-on about the idea of muscling in on Goldman Sachs, Merrill Lynch, and Citigroup in the biggest market in the world. They launch fancy new offices, snap up a bunch of high-priced talent from other investment banks, and throw ... More About: West , Young , Sheik
For Whom the Bell Tolls
2007-09-10 14:20:00 Gandalf had hardly spoken these words, when there came a great noise: a rolling Boom that seemed to come from the depths far below, and to tremble in the stone at their feet. They sprang towards the door in alarm. Doom, doom it rolled again, as if huge hands were turning the very caverns of Moria into a vast drum. Then there came an echoing blast: a great horn was blown in the hall, and answering horns and harsh cries were heard further off. There was a hurrying sound of many feet."They are coming!" cried Legolas."We cannot get out," said Gimli.— J.R.R. Tolkein, The Fellowship of the RingAndrew Ross Sorkin is dancing a happy jig on the freshly filled grave of the private equity boom, and he wants you to know that you're next:Comfortable? Let me offer a more dour view: wide swaths of Wall Street, and many of the industries that serve it, are in for some serious collateral damage. Not only has private equity been out of business for the last two months, but that activity i... More About: Bell
The Wisdom of Crowds?
2007-09-08 15:30:00 "It's like, how much more black could this be? and the answer is none. None more black."— Nigel Tufnel, This Is Spinal TapSteve Schwarzman must be seriously pissed.In addition to having Joseph Flom of Skadden Arps put a serious crimp in his social life by preventing him from waggling his private parts in public both during and after the Blackstone IPO, Little Stevie now faces the ignominy of a continuously tanking BX stock price. The naughty little security even had the temerity to close yesterday almost $10 per share (or nearly 31%) down from the June 21st IPO price of $31.Blackstone's shares are not alone, of course, in having had a serious attack of the vapors ever since Wall Street remembered that Risk is not only a Parker Brothers board game. Listed hedge fund Fortress Investment has crapped out over 50% from its February high (although only a dollar from its IPO price), and legions of investment bankers at Goldman Sachs, Lehman Brothers, and Bear Stearns have seen ma... More About: Wisdom , Crowd , Wisdom of Crowds
Déjà-vu
2007-09-06 00:13:00 I must say I am disappointed.A few weeks ago, against the background of a steady stream of handbaskets carrying various and assorted market participants, credit ratings, and institutional balance sheets straight toward Old Beelzebub's Broiler, I decided to leave for a couple of weeks of relaxing R&R. The Dealmaker Family Unit had a lovely time, grilling the ancestral lutefisk over a cedarwood campfire, nailing the occasional squirrel to a knotty pine, and baying at the aurora borealis in Northern Manitoba. I can't be positive that the little Dealmakers truly remembered me after my habitual work-induced absence, but if not the Missus did a good job briefing them on how to pretend they recognized Dear Old Dad.Unfortunately, when I returned to work this week I found that you people did not sort things out during my absence. The mainstream media, my fellow financial bloggists, and my trusty Bloomberg terminal are all still rabbiting on about the same old credit-contagion, market-cr...
More Works to Look On and Despair
2007-08-11 18:05:00 It has been not quite three months since I last regaled you Dear Readers with a hand-picked selection of my best work to date, modestly entitled "The Canon." Accordingly, it is about time for my semi-annual review1 of blog post candidates for beatification and enrollment onto the list.To my delight, folly, avarice, and hubris have been thick on the ground these past few months, so I have had plenty of grist for my metaphorical mill. Having slaughtered many innocent pixels on the altar of Better Information Through Vanity Publishing on the Internet, I had copious material from which to select the following gems. (Those of you sensitive to Green issues can consider this my contribution to global recycling, if you wish.)Without further ado, I offer you the current crop of the best and brightest:(MORE OF) THE CANONIt's Good to Be the King: Corporate wives do their utmost for their husbands' companies' shareholders. What's not to like?: Mel Brooks and a boob picture. A reader f... More About: Works , Look , Despair
Grains of Sand
2007-08-10 18:30:00 To see a World in a Grain of Sand And a Heaven in a Wild Flower,Hold Infinity in the palm of your hand And Eternity in an hour.— William BlakeSo, what's next?Based on yesterday's and this morning's market events around the world, it appears that what might have been a small snow slide resulting from problems in the US subprime mortgage sector has turned into a true avalanche involving multiple market sectors and geographies. Sectors as apparently far afield as commercial paper, equity "quant" trading, and overnight bank credit markets all seem to be roiled with troubles. But is the contagion spent already, or is it gathering momentum?This writer and many others have pointed to the principal sources of this contagion across sectors: cross-sector investment portfolios (which transmit selling pressure across nominally unrelated security classes and markets when price declines in one market encourage an investor to liquidate unrelated securities to meet margin or redemption r... More About: Grains
Reader Survey
2007-08-03 17:49:00 There is just no pleasing you people, is there?I have received some strenuously negative feedback from certain of my Devoted Reader s concerning the recent redesign of this blog site, especially as concerns the background color. Attentive Readers with too little to do during the current market swoon will remember that I changed it from its previous lemon-lime-yellowish-kind-of-thing to the current white in response to complaints that it lacked a certain gravitas.Well, now I learn that some of you were quite devoted to the original yellow, either as an invigorating visual substitute for caffeine and Adderall in the morning or as a reminder of my—shall we say—rather bilious world view.So, being too lazy to work out all the aesthetic issues myself, and being too mindful of the happiness of the majority of my Dear Readers, I have decided to resort to that last refuge of a scoundrel, the reader poll. (Up next, online focus groups?)You will find it nestled comfortably under m... More About: Survey
Penny Wise
2007-08-02 21:45:00 Ever since the Blackstone IPO, I have been curious to know how Steve Schwarzman and his fellow PE-tocrats over at The Blackstone Group have been handling the experience of being a public company. After all, even though they have a lot of experience taking portfolio companies on round trips to and from the public markets, this is the first time in years that many of them have been subject to daily report cards on their business from Mr. Market, not to mention real time updates on a major portion of their personal wealth.Well, thanks to my talent for suborning disgruntled junior PE professionals, I can now report on the reactions of at least one altitudinally challenged squillionaire. It appears that Mr. Schwarzman has been taking time almost every day—even while on a less-than-satisfying French vacation—to record his reactions to the daily ups and downs of BX stock. No wonder, since for every penny BX shares move his personal net worth goes up or down by $2.5 million.M... More About: Wise , Penny
The Great Chain of Being
2007-08-02 15:45:00 Give me a place to stand, and I will move the Earth.— Archimedes, on the power of leverageYou know something is up when even a blogsite devoted to the hedge fund industry posts a piece entitled "Do hedge funds cause systemic risk after all?"AllAboutAlpha—which usually has a noticeably positive perspective on hedgies and their machinations—broke with precedent this past Tuesday with the aforementioned post, in which Alpha Male cites both a recent New York Fed study and Richard Bookstaber's new book, "A Demon of Our Own Design," as offering a resounding "Yes" answer to the question he posed in his title. Each of the extensive quotations Mr. Male cites supports the argument made by a wise man of my acquaintance, reported elsewhere and confirmed by research, that embedded leverage among the hedge fund community and elsewhere has a high potential to end in tears.(Never mind that Mr. Bookstaber is the same individual who by his own admission had a substantial part to ... More About: Great , Being , Chain , Chai , Hain
Spring Cleaning
2007-07-31 18:35:00 Attentive readers who are not trying to view this blog on a laptop in the glaring sun of the Hamptons or the Cote d'Azur will notice that I have made a few subtle changes to the design of this site. Chief among those is the replacement of the original background color to a nice, unobjectionable white, which should reduce (but probably not eliminate) the peevish cavilling from certain quarters about my aesthetic sensibilities.I was actually rather fond of my original color scheme, which appeared to nice effect on my high-quality monitor through the lens of a secure, robust web browser. However, I do understand that most of you—through either your own misguided choice or the evil tyranny of corporate IT departments—have been reduced to squinting at the World Wide Web through the unlucky combination of Microsoft web browsers and Dell computer monitors. I have been reliably informed that my original background color appeared as a rather noxious "lemon-lime" in such conte... More About: Cleaning , Spring
Wild Strawberries
2007-07-30 18:00:00 Ingmar Bergman has gone to his long home.Long after the last bond indenture and purchase agreement has moldered away, he will be remembered.“I want to be one of the artists of the cathedral that rises on the plain,” he said. “I want to occupy myself by carving out of stone the head of a dragon, an angel or a demon, or perhaps a saint; it doesn’t matter; I will find the same joy in any case. Whether I am a believer or an unbeliever, Christian or pagan, I work with all the world to build a cathedral because I am artist and artisan, and because I have learned to draw faces, limbs, and bodies out of stone. I will never worry about the judgment of posterity or of my contemporaries; my name is carved nowhere and will disappear with me. But a little part of myself will survive in the anonymous and triumphant totality. A dragon or a demon, or perhaps a saint, it doesn’t matter!”And missed.In 1982, Mr. Bergman announced that he had just made his last theatrical film — it was ... More About: Wild , Strawberries
L.H.O.O.Q.
2007-07-29 18:50:00 Watching the little islands of green stock tickers flash feebly against the sea of red on my Bloomberg monitor last Friday somehow got me thinking about art. (It is too early for Christmas, and the way things are going there may be no presents exchanged in Manhattan this year anyway.) Fortunately, DealBook ran a little piece that provided an interesting distraction from the screams of leveraged finance bankers plunging to their deaths from the office buildings surrounding me.In it, DealBook profiled the list of the top ten art collectors published in the recent issue of ARTnews. Apparently "Budweiser" Ken Griffin of Citadel Investments, the most boring seriously weird rich dude on the profile circuit, has "elbowed his way" into the top 10 to join his competitor and chubby fleece-wearer Steve Cohen of SAC Capital on the list which leading art dealers use as a masturbatory aid. Steve, of course, has already proved his art world bona fides by loaning Damien Hirst's tiger shark flo...
The Wine Dark Sea
2007-07-27 00:54:00 So which is it, Boys and Girls? Market meltdown, or liquidity freeze? Armageddon, or The Big Chill?After today's nasty swoon, reflected in both the equity markets and the credit markets, I will venture a modest prediction that the financial and mainstream media will be ransacking their Financial Markets Metaphor Departments tonight for punchy phrases and blistering bon mots to describe the pile-up. Tomorrow's articles should be downright Homeric in tone.I wish I could say that I care, but I do not have a dog in this fight. (To be more precise, I have so many dogs on so many sides of this fight that I do not care which one(s) have their throats ripped out.) Whether today's little disturbance—it didn't even trigger the circuit breakers, people, really—turns out to be another pause that refreshes, like this past February, or the start of a long and painful slide, Your Faithful Correspondent expects to land on his well-shod feet quite nicely. Sure, the M&A market w... More About: Wine , Dark
Ch-ch-ch-ch-changes
2007-07-25 17:26:00 If you haven't got anything nice to say about anybody, come sit next to me.— Alice Roosevelt LongworthWell, Cerberus Capital Management just exercised the Chrysler Put.News broke this morning that it has abandoned the attempt to sell $12 billion of loans to help finance the purchase of the perennially troubled automaker. Apparently it couldn't negotiate acceptable terms with potential investors, because would-be lenders kept projectile vomiting all over the draft indentures. Instead, along with DaimlerChrysler it will pony up some spare change ($2 billion) and collect the rest from its committed financing banks, JPMorgan Chase, Citigroup, Goldman Sachs, Bear Stearns, and Morgan Stanley. The deal to buy out Chrysler will close as scheduled on August 3rd.Senior bankers from Cerberus's debt bitches new best friends couldn't be reached for further comment, as they were all nursing painful dog bites on their derrieres from their three-headed client. Chief Financial Officer... More About: Chang , Chan
Like I Said
2007-07-17 15:02:00 Those crack financial reporters over at the New York Post have proved my point again this morning, twice.First, they have shown that they work as a sort of in-town wire service for The New York Times, speaking to all those hedge fund managers and financial market sources too Republican or too greasy to admit of regular dialogue with the Gray Lady. I have made this point before, to general disbelief and disregard among the chattering classes. CC, you stand corrected.Second, the Post bloodhounds have turned up evidence that the margin leverage screw tightening I recently identified as an almost guaranteed outcome and potential accelerant of the developing subprime mortgage meltdown is indeed underway:Big Wall Street firms' love affair with lending cash to hedge funds specializing in trading mortgage-backed securities is officially over as margin requirements are getting tougher, making an already brutal market even more costly.For the past five years, hedge funds specializing in tr... More About: Like , Said
Duh duh ... Duh duh
More articles from this author:2007-07-16 14:14:00 There is nothing like the rumor of a monster deal to enliven the dog days of summer.FT Alphaville reports this morning that UK cell phone giant Vodafone may be considering a $160 billion bid for US fixed-line and cell phone giant Verizon. Apparently it's all very early days yet, and nothing may yet come to fruition, but it does make me want to add an extra shot of expresso to my morning latte.Alphaville quotes "well placed financiers" who reveal that deal structures Vodafone has contemplated include potentially spinning off Verizon's fixed-line business to private equity, issuing tracking stock in Vodafone to US investors to fund the takeover, and gleefully "flummoxing critics" by floating provocative rumors of mega-deals in the UK financial press. The numbers involved, at the top end, would indeed be staggering. A merged entity is posited by Alphaville to have a market capitalization of around $300 billion, and a PE-financed spinoff of the fixed-line hamster and baling wire bu... 1, 2, 3, 4, 5 |
|
 |
|
 |
