Bonus Bananas December 7, 2012
1) Morgan Stanley CEO: More bank deals on the way (CNN Money) - James Gorman sees a lot more bank consolidation on the horizon.
2) Another Goldman Creature Given Vital Government Post (Rolling Stone) - Another rant by Matt Taibbi, this time showcasing the appointment of ex-Goldmanite Mark Carney as the head of the Bank of England. We've seen this movie so many times already that I'm not even sure Taibbi's indignation is real anymore. How could it be?
3) Law School Classmates Arrested in Insider Trading Case (Wall Street Journal) - An insider trading scandal in the House of Schiff??? Say it ain't so. Pro tip for would-be inside traders: don't text your buddies about the sick ride you're gonna buy when this inside info pays off.
4) The Debt Ceiling Is Coming Back, And People Are Talking About The Infamous 'Trillion Dollar Platinum Coin' Solution (Business Insider) - They say necessity is the mother of invention, and in times of crisis people get really creative. I actually think this is a pretty elegant solution to the problem.
5) My First Customer Is Now Dead (Altucher Confidential) - It's been a while since I've featured anything from James, and this was a good one. I'm always harping on you guys to learn a programming language, and this is one of the reasons why.
6) Google snaps up Waterloo startup BufferBox (Financial Post) - Is Google getting into shipping and fulfillment? This is a pretty cool idea, but I'm struggling to see how it's going to scale. Lucky for Google they're a lot smarter than me.
7) Apple May Fall Another 20% on 'Panic Selling': Analyst (CNBC) - Can't mention Google without mentioning Apple. Jesus, Apple's been a hot mess the past couple of weeks. I was stoked to own it at $590, but it made my butt pucker at $518 yesterday. Now this clown's saying $420??? Sheesh...
8) First-World Problems: What are quintessential first-world problems? (Quora) - These are hilarious. My favorite: "The Domino's Pizza tracker is not working. Now I don't know when to put my pants on."
9) 'The only place that will survive the Mayan Apocalypse': Residents of French mountain crack open End of the World wine (and offer house rental at $1,600-a-night) (Daily Mail) - You gotta love folks who capitalize on suckers. If this is the most exciting thing to happen to your town in a thousand years, you might as well make the most of it.
10) Mother-Daughter Porn Duo Jessica Sexxxton, Monica Sexxxton Aiming To Be Filthy Rich (Huffington Post) - Ewwww. Just...ewwww. Maybe a little bit hot? Maybe??? Nope Nope Nope. Ewwwww.
Video of the Week:
I was reminded of the following video by BroBible in their post of the Top Ten college videos of 2012. Of course 8 of them were the obligatory blowout party videos, but this gem from Michael Lewis sneaked onto the list. It's the commencement address he gave at Princeton (his alma mater) earlier this year, and it's worth listening to (and listening to again if you've already heard it). First and foremost, the message is to never discount the value of luck in your life. The speech is delivered with his trademark acerbic wit, and he tells the tale about how a confused Art History major ended up working on Wall Street and becoming one of the best known authors of our time. Enjoy:
That's it for this week, guys. Have an amazing weekend and let me know what you think of this week's bananas in the comments.
(1) I think we might some consolidation, but ultimately you need buyers. And investment banks are a drag to ROE right now - buying one is not a great short term move for a CEO. Stifel has always been highly acquisitive, and LUK already owned 28% of Jefferies. So neither of these are a surprise.
But I don't see some massive trend towards consolidation at the top of the market. You will still have the same BBs, and the elite boutiques (Evr, laz, bx, centerview) will stick around. Maybe we will see Greenhill, Gleacher, or another bank that has been losing talent bought up, but I think those will be exceptions.
(7) I'm buying AAPL now. I neither know nor care whether their margins are sustainable long term (5 years+). But people are going to keep buying iPhones over the next year or two, at least.
Over the next 12-18 months, they are all but guaranteed to rebound to 700. 25% gains are nothing to sneeze at. And the risk is minimal.
The Michael Lewis speech is spot on. Here's my favorite part:
With incredible consistency the person arbitrarily appointed leader of the group grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto: lips smacking, mouth open, drool at the corners of their mouths. In the end all that was left of the extra cookie were crumbs on the leader's shirt. This leader had performed no special task. He had no special virtue. He'd been chosen at random, 30 minutes earlier. His status was nothing but luck. But it still left him with the sense that the cookie should be his.
Although to be completely fair, Conan @ Dartmouth was more entertaining.
Google needs to stop fucking around and just buy T-Mobile.
Lewis is a great author - the bitch at 5:45 that looked bored pissed me off.
I actually wrote about BufferBox back in September: http://www.wallstreetoasis.com/blog/the-new-trend-with-startups-actuall…
Pretty blown away that they got acquired so quickly. It seemed like a great idea that just needed (lots of) money to scale. Though, I'm sort of shocked that Google didn't just choose to do this sort of thing on their own. Either way, it's a useful sounding business.
10) Walking ED creators.
So glad to see Bonus Bananas make its long overdue return.
Good links, thanks Ed, you saved me a few hours of sifting through news sites.
Michael Lewis is an fantastic writer and speaker, he can make any story or subject very interesting; however, the value of his financial analysis is really overblown (his 2 year stint as a junior bond salesman in the 80s notwithstanding).
Great speech and something I firmly believe.
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