1 min read · 19 September 2008
* Daily carnage update: Citi considering a bid for WaMu, CIC dampens talk that it will increase its stake in Morgan Stanley, Italy's Mediobanca may want certain AIG assets, Buffett's bomb goes boom, SEC enacts temporary ban on short-selling of financial firms and the Feds may just bail out everyone. * The Paulson Doctrine * Dear John Thain: Could Goldman Sachs Capital Partners take Goldman Sachs private? * Kedrosky: "So, do we reform the credit ratings agencies? Sure. Stop them from being paid by issuers. I'm fine with that. But why stop there? Why not reform them right out of existence?"
1 min read · 19 September 2008
Just got off the phone with a venture capitalist whose firm just raised a new fund (sorry, under embargo on the details). While explaining why his firm doesn't do cleantech investing, he said: "We decided that we prefer capital efficiency over capital intensity." From the mouths of VCs...
1 min read · 18 September 2008
It's far too early to know how Jane Mendillo will fare as chief investment officer for the Harvard Management Co., but it is now clear that she gets to begin with a headstart over rival Yale. America's oldest university announced last week that its endowment stood at $36.9 billion for the fiscal year ending June 30, which represents an 8.6% increase over the prior year. Not too shabby, considering that the average university endowment actually lost value during that same period. Yale also posted a gain, but at a slower rate, according to a document obtained by the Yale Daily News. The Connecticut school's total endowment now stands at nearly $23 billion, which is second-best in the nation (and larger than the GDP of some actual nations). It would represent a 2.2% growth rate, were spending taken into account (Harvard's is 5.7%, including spending). The Yale paper says that both schools were able to buck the national trend by embracing alternative and real-asset investments, particularly since both schools saw drops in their doemstic and foreign equities portfolios. But, again, Harvard
1 min read · 18 September 2008
My London colleague Robert Venes noticed that at least one company is benefiting from Lehman's collapse, in the form of free promotion...
1 min read · 18 September 2008
Most everyone is referring to the Fed move on AIG as a "bailout," but Nick Gartmore demurred last night on CNBC: I’m amused that everyone is calling it a bailout. I’m sorry but AIG is borrowing money at close to 12%. You can borrow money from Nick the Knife for less that that! Before contemplating a new nickname for Bernanke (Bennie the Blade?) or Paulson (Hank the Shank?), let’s also reconsider the use of “bailout.” It’s true that AIG doesn’t get to walk away free and clear, so perhaps this is best described as a diamond-studded life preserver. Plenty of ways to cut the drowning man, but it’s far better than the alternative. The downside is that diamond can also cut rope, which means the life preserver’s owner also runs a major risk of not retrieving his treasure (but he just couldn’t bring himself to not at least try).
1 min read · 18 September 2008
1 min read · 17 September 2008
1 min read · 17 September 2008
* Daily carnage roundup: AIG rescued, Barclays pays just $250m for Lehman Brothers' investment banking biz (but $1.75b overall, including its NY HQ), Lehman's investment management unit -- which includes its $35b private equity biz -- remains on the block, Morgan Stanley considers a merger and the Fed holds steady. * Also just hearing that Barclays CEO said the bank has “opportunities but not obligations” to buy Lehman businesses in Europe and Asia. * Insitutional Investor Magazine names Lehman its top fixed-income research group of 2008. Wonder where it will send the commemorative plaque. * First Round Capital: Leave Wall Street, Join a Startup * McCain helped "create" the Blackberry? Thought RIM was a Canadian company...
1 min read · 17 September 2008
CNBC's David Faber is reporting that AIG will likely receive a federal bridge loan of between $85 billion and $90 billion, in order to prevent the insurance giant from going bankrupt. I wonder if they're also going to throw in some frozen steaks for Dick Fuld, because this is yet another punch in the face to Lehman Brothers. Barry Ritholtz wrote the following yesterday, and it is both prescient and depressing: Don't just risk your company, risk the entire world of Finance. Modest incompetence is insufficient -- if you merely destroy your own company, you won't get rescued. You have to threaten to bring down the entire global financial system. The fear and disruption caused by a Bear collapse is why it was saved. (AIG has the right idea on this). That's the big lesson, and I can guarantee that the next dying financial firm -- and there will be more than one -- is hearing it loud and clear tonight.
1 min read · 16 September 2008
