Lots of good stuff this week:
1) JPMorgan Grants CEO Dimon Big Stock Bonus (ABC News) - Jamie Dimon gets a $17 million bonus on the heels of a great quarter. $12 million is in restricted stock vesting in 2013 and 2014. The rest is in options exercisable over the next ten years, beginning next January. Wonder if he's buying any puts?
2) Moelis hires Goldman oil banker, plans Houston office (Reuters) - Moelis is opening a Houston office in April, further cementing the city's status as Wall Street South. They've hired Brady Parish away from Goldman to run the office. Plans are for a 5-10 man office catering to oil and gas clientele.
3) Critics say Goldman should give $2.9 billion back to taxpayers (The Daily Hampshire Gazette) - Some folks are up in arms over the revelation that $2.9 billion of the money Goldman received in the AIG bailout was their profit on a mere $20 million bet with the failed insurance giant. The big issue here is that this was a proprietary trade on Goldman's behalf, and the money went straight to Goldman's bottom line.
4) Hedge Funds, Banks Drive Up Prices In Madoff Claims Market (FINalternatives) - The secondary market in claims against Bernie Madoff is booming, due in no small part to the success of Irving Picard in collecting over $10 billion in restitution thus far. Banks and hedge funds are bidding up damage claims that weren't worth a penny on the dollar six months ago. Bankruptcy claims from direct investors in the scam are now fetching up to 40 cents on the dollar.
5) Why Isn't Wall Street in Jail? (Rolling Stone) - Matt Taibbi's latest. I mentioned it earlier in the week, as have a few others of you, but go read it if you haven't. He's highly entertaining as always, and this one really exposes the all-too-cozy relationship between regulators and Wall Street banks. Dismiss Taibbi at your own peril; he's quickly becoming the guy everyone listens to when it comes to exposing Wall Street corruption.
6) World Bank: Food prices at "dangerous levels" (Yahoo! Finance) - Expect to see more and more of this over the coming year. This is turning into a global crisis, and it threatens to destabilize governments throughout the developing world. The CFTC is reluctantly instituting curbs to discourage speculation, but it might be too little too late.
7) Fed inflation hawk Warsh resigns (CNN Money) - In a sign that all is not well in the House of Bernanke, outspoken inflation hawk Kevin Warsh resigned a week ago. No word on why he resigned but, with another 7 years left on his term, I'll give you three guesses and the first two don't count.
8) 30 Most Influential Under30CEOs of 2010 (Under 30 CEO) - Just a bit of inspiration for the entrepreneurs in the bunch. The list has all the usual suspects (Zuckerberg, Mason, etc...) but there are a lot of surprises here too. For those considering the entrepreneur track (which I highly encourage), take a look at what's possible.
9) 12 Business Founders Who Succeeded Without a College Degree (WiseBread) - Okay, one more on the entrepreneur front, because this was a discussion that came up a couple times this week. Yes, college is a good idea. But not going isn't the end of the world by any means.
10) Off-gridders flee ‘solar Katrina’ (Off-Grid.net) - You may have noticed some solar storms in the news over the past few days, playing havoc with radio signals and being a general pain in the ass. Some folks at NASA think it's just the beginning, and that a massive solar flare could crush the power grid. Now, I'll be the first to admit that I'm more than a little paranoid and I've been a survivalist for over 20 years now, but you really should give some thought to how you'd fare if the power grid went offline for days or even weeks. At the very least, you should read Emergency. Don't be a victim.
And because the AshleyMadison.com thread was so popular this week, I thought I'd leave you guys with this trailer for Hall Pass, which opens next week. Not sure how funny it will be, but "Do you think these bar napkins smell like chloroform?" might be the best pick-up line EVER.
That's all I've got this week, guys. Let me know what you think of the links, and if I've missed anything. Have a great weekend.
Eddie...
I see your trailer for Hall Pass and I raise you the trailer for "Howlin' For You". This looks like the best B-movie/Grindhouse type film that's been hyped in the last few years.
http://www.youtube.com/embed/JxU36Dootb8
And I will be back with comments on the articles when I get a chance to peruse them.
Moelis: what isn't in Houston now? More for monty and the next Energy Rodeo.
Madoff speculation: this is just awful in my book. Why are people trading the rights to damages. Greed is not always good.
Off-gridders: yeah. I'm actually a lot like you too then Eddie, although I haven't done any physical preparation. I don't own any property of my own yet, and just like so many other things in my life, what I preach in my head is different than what I practice in life.
Frieds, that movie looks awful. Except for Sir Todd Bridges.
Yeah. When the fuck did he get knighted? Was that guy he shot in that crackhouse plotting to kill the Queen? Or maybe when he stabbed his roommate in the chest? Either way, I wanna party with that guy.
It's actually not as bad as you think. These are folks who have legitimate claims to restitution, but who realize the likelihood of ever seeing a penny is fairly slim. So it's better to sell your claim to a hedge fund for 40 cents on the dollar and recover some of your money than to risk it in court for years and maybe get nothing. On the other side of the trade, the hedgie pays 40 cents, and assumes the risk in hopes of collecting 100 cents. It's kind of a win-win (granted, in a pretty shitty situation).
I think any distressed debt shop would consider something like this. Not sure anyone specializes in it, but lots of shops do it. There's even a branch of finance commonly referred to as "Vulture Capitalists" who buy distressed sovereign debt, wait for the country's government to be overthrown, and then sue the new government for 100 cents on the dollar. Kind of the same thing.
I see the logic behind it, it basically boils down to a matter of scale. What resources does the average family (in this case, wealthy investor) have compared to an established fund? In that case I'd honestly be doing the same thing, I'd take a guaranteed 40% of my claim here and now over a nebulous shot at 100% sometime in the future.
Solar flares knocking out power grids, rising food prices, unrest in the middle east, a random-out-of-no-where "doomsday" place built in the arctic circle, and Ron Stewart having an 8th child. That whole 2012 end of world thing is starting to look awfully realistic.
Then again, when is there not unrest in the middle east?
It's like wildfires in CA, or storm damage in the Gulf - don't people see the larger patterns and learn from it??
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