Bonus Bananas May 25, 2012
1) Strippers in Paris Go on Strike, Say Wages 'Miserable' (CNBC) - Quelle horreur! When I first heard this I couldn't believe it, but it's true. The girls shut down the Crazy Horse cabaret for the first time since it opened in 1951. Then I looked into it a bit and realized that the girls were working 6 nights a week for a maximum income of €2,000 a month. Halfway decent American strippers make that in a week, so I guess I get it now. Strippers of the world unite!
2) JPMorgan’s debacle, and its parallels to AIG (Washington Post) - Barry Ritholtz does a masterful job of drawing the parallels between JPM getting Moby Dicked and the whole AIG disaster. Let's hope this one doesn't end in another massive bailout.
3) Why Private Equity Firms Like Bain Really Are the Worst of Capitalism (Rolling Stone) - You know what we never do on WSO? Hate on private equity. Luckily, we have Rolling Stone to do it for us. As out of whack as some of Kosman's contentions are, he's probably right that PE will be the millstone around Romney's neck in November. Read this if you wanna get pissed off.
4) An All-Time Low (The Reformed Broker) - I love a good rant as much as the next guy, and Josh Brown is in the trenches slugging it out every single day. I don't envy him for it, and I sure enjoyed this piece blowing off steam about how screwed the market is at the moment. I swear I fucking cringe at the thought of still being in the business and having to play poison phone with all the clients who got roasted by Facebook.
5) 10 Life-Changing Decisions We Make Without Thinking (Altucher Confidential) - It's been a while since I've featured something from James, and this is one you should definitely read. So much of our lives are spent on auto-pilot, and much of it is for no good reason. Did you ever stop to think...no, you didn't. And that's your problem.
6) What's Cool About Being An Investor? (WeFunder University) - I'm pretty much betting all the marbles that WeFunder is going to be the predominant crowdfunding platform when the JOBS Act is fully implemented in January of 2013. For those looking to get a head start on the ins and outs of crowdfunding a startup, WeFunder has introduced WeFunder University. A lot of you wish you'd started P2P lending when I did. Maybe this is a second bite at the APPL. (You see what I did there?)
7) Facebook IPO Investors Can Blame The Government For Missing Out On Big Gains (Forbes) - I love this piece. There's a lot of blame to go around in the whole Fadebook IPO, but this article takes the novel approach that too much regulation in the market cost investors all their money. The sad thing is that it's a valid point. It used to be that going public was every entrepreneur's wet dream. Now, with Sarbanes-Oxley and all kinds of other regs, going public exposes a founder to a bunch of risk they'd rather not face. It's the reason Fadebook took so long to go public, and the reason all the growth had already been harvested by VC's.
8) 'The Golden Age of Silicon Valley Is Over, and We're Dancing on its Grave' (The Atlantic) - Steve Blank is the EF Hutton of tech entrepreneurship; when he speaks, you shut the fuck up and listen. In this interview, he laments the demise of the days when Silicon Valley invested in actual silicon (hardware, engineering, biotech, etc...). He brings up the point that he could invest in a drug which cures cancer but it wouldn't pay him out for ten years, so why would he do that when he could throw money at Instagram and cash out in 8 months? The saddest thing: he's not wrong.
9) Angel No More: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet (Wired) - If I were a lesser man (and some days I am), I would probably hate Kevin Hartz. He graduated high school a year behind me and we grew up within 50 miles of each other, but that's where the similarities end (unless you're willing to consider that he attended Oxford at one point and I served side by side with British Royal Marines twice). He's a big time Silicon Valley angel and a founding member of the PayPal mafia. So why has he stopped investing in new deals? Check it out.
Video of the Week
I feel like I had to post the trailer released this week for the upcoming Baz Luhrmann re-telling of The Great Gatsby. I have a love/hate relationship with the story itself, mostly because it hits uncomfortably close to home. Be that as it may, I'll be first in line for this highly stylized update to the mostly boring 1974 Gatsby starring Robert Redford (and I'm a HUGE Redford fan). Enjoy, and be sure to go Full Screen on this one:
That's it for this week, fellas. Enjoy the long weekend, pour one out for the fallen on Monday, and let me know what you think of this week's Bananas in the comments.
Holy shit. This just in or it would have made the list:
Former FDIC Chairwoman Sheila Bair calls for the break-up of JP Morgan Chase in light of The Whale debacle:
http://finance.fortune.cnn.com/2012/05/25/jp-morgan-chase-breakup/
^ lol halarious. she's probably pmsing
Another guy chasing his Daisy Buchanan? Plenty of us know that feel, bro.
9 - emblematic of US capitalism in general. The solution?
"Here’s what private equity is really about: A firm like Bain obtains cheap credit and uses it to acquire a company in a "leveraged buyout." "Leverage" refers to the fact that the company being purchased is forced to pay for about 70 percent of its own acquisition, by taking out loans. If this sounds like an odd arrangement, that's because it is. Imagine a homebuyer purchasing a house and making the bank responsible for repaying its own loan, and you start to get the picture."
What the fuck? Hilarious analogy. Gotta love irresponsible journalism.
Above as well as below are my personal favourites from that article:
"All of this is bad enough. But leveraged buyouts don't only hurt businesses, workers, and the economy generally – they also short-change taxpayers, via a giant loophole in the tax code that enables companies to deduct loan interest from taxes."
Because we all know only PE deals have this treatment right..?
@10 - whew, so that's what the picture was for. I thought Lil Jon was getting some busted ass groupies at the county fair
As someone uneducated in the details of how PE truly works, can someone briefly explain to me where the rolling stones article goes wrong?
That is not to say I don't believe he's wrong, I just have no idea.
Carrie Mulligan is a grenade man. Does not belong on screen with ballers like Leo and especially not the king of ballers, Shia.
Swag, not sure if you're being serious but in either case I couldn't agree more. She's not even a butter face (because that implies a decent bod at least, even if it's attached to a jacked up helmet).
Yah, I stopped reading the Rolling Stone article after the home buying analogy. If that statement is indicative of the accuracy I could expect from the rest of the piece, I think I made the right decision.
Pro tip - the proper analogy is like a homebuyer purchasing a house with 30% down and repaying the mortgage with income generated by renting the house out.
Also, "Romney owned 100 percent of Bain Capital making him involved in all these deals, which represented more than 20 percent of the money Bain made from its investment funds between 1987 and 1995."
Hahaha.
10 I'm eating steak tonight, the guys in Nigeria are playing Milf Hunter. Win some, lose some.
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