2 min read · 23 September 2008
Greetings from Denver, where I'm stationed for tonight's peHUB Shndig. During yesterday's flight, I chatted with my neighbor, an obstetrician returning home to Denver. After telling her my profession, she asked me to: (A) Explain what was happening in the financial markets, and (B) Predict what was coming next. It was the same conversation I’ve had with just about everyone in my path over the past week, including some college friends who stopped by Sunday to watch the Patriots game (which sadly became a Wii MarioKart session by the end of Q3). I’d imagine that many of you have experienced the same, so I’m interested in your responses. How do you explain all this to non-financial types? The first part is obviously easier than the latter, particularly since few of us (myself not among the few) were predicting anything nearly this volatile. But let me know what your stock response has become, and perhaps how much your believe in it.
1 min read · 23 September 2008
1 min read · 23 September 2008
* Daily carnage update: Stock futures edge even lower as everyone awaits testimony from Paulson and Bernanke, TD Bank is considering a bid for WaMu, Fluidigm postpones IPO (shocker), Carlyle may take some of those toxic assets off Paulson's hands (assuming he gets them) and "corrupt Asians" feel vindicated by Wall Street bust. * How similar is the Wall Street mess to the tech bubble burst? Here's one similarity: Enterprises are beginning to cap their IT budgets. * The Fed eases its rules on private equity investments in banks. * Hank Paulson, Socialist: Republicans admit the free market doesn't work.
1 min read · 23 September 2008
1 min read · 22 September 2008
1 min read · 22 September 2008
Daily carnage report: Goldman Sachs and Morgan Stanley are no longer traditional I-banks, Nomura is buying Lehman's Asian operations, IPO stocks get battered in the market tumult, the actual text of Paulson bailout proposal and stock futures are down. * Kedrosky thinks we should all get bailout tombstones. I say we should all get a closing dinner. * Icahn blames corporate waste. * Heidi asks if Hank Paulson is too powerful. My take is that no one individual (or federal department) should have the responsibility being proposed without any real oversight. That also seems to be the political consensus that's building -- at least judging Obama and McCain's statements. I'm sure that'll cause troubles
1 min read · 22 September 2008
2 min read · 20 September 2008
Rumors are running rampant that we are just hours away from hearing that Lehman Brothers has agreed to sell its investment management group to either a single private equity firm (CD&R) or pair of private equity firms (Bain Capital & Hellman & Friedman). Oh, and I still say this makes too much sense for KKR to not be involved until the final minute. This would be the whole enchilada as opposed to the original 55% stake, although reports vary on total price (anywhere from $4b-$7b, which means finding leverage could present the largest hurdle). There's lots of reasons for private equity firms not to buy Lehman IM, including: (a) Lack of certainty that wealth managers won't bail; (b) Lack of certainty that private equity managers won't bail/insist on spinning out and (c) Lack of certainty that one of the coming lawsuits won't stick. But there's also an unusual reason why this deal could be particularly lucrative
2 min read · 19 September 2008
Well, apparently not everyone is feeling the pinch. A UK tabloid reports that Lyndon Lea, a co-founding partner of Lion Capital, recently threw a housewarming bash that included “a lineup of young ladies wearing nothing but discreetly-applied bodypaint.” Makes Steve Schwarzman’s birthday party seem modest… The event reportedly was held at Lea’s recently-purchased $31 million home in Montecito, Calif. – a town whose country club also plays host to Lea’s preferred sport of polo. He also, of course, has homes in the UK, which is where Lion does most of its business as a consumer-focused buyout fund (it’s the former European arm of Hicks Muse, which spun off after realizing it was generating most of the firm’s profits). No word on if the painted ladies accompanied him back across the pond, where Lion is getting ready to wrap up a £1.1 billion deal for UK food products company The FoodVest Group…
1 min read · 19 September 2008
