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Michael Gracie

Stuff you might have missed while searching for your old ‘Thriller’ vinyl – 06/29/09

Technology

  • How Difficult Is It To Post A Bill On The White House Website For Five Days? [Techdirt] – Watch for a new government job listing for, uh, White House Blogger. Primary responsibility: cut and paste.
  • Great Wall of Facebook: The Social Network’s Plan to Dominate the Internet — and Keep Google Out [Wired] – All Google has to do is remove Facebook from their search results, and the fight is over.
  • Indian CEO Says Most US Tech Grads “Unemployable” [Slashdot] – The kingdom of outsourcing may be hedging its bets through the PR channels.
  • Finance

  • Krugman and the Housing Bubble: A Love Story [Reason] – Mr. Krugman is long to get his story straight. Looks like the ‘internet is forever’ mantra is getting the best of him.
  • Goldman Sachs: The Great American Bubble Machine [The Big Picture] – A must read, particularly the final blow on cap-and-trade. I suggest clicking through to the Scribd page and going full screen.
  • Frank Pushes Fannie and Freddie to Take On More Risky Loans [Contrarian Profits] – Along with a plan to refinance homes that are underwater, it looks as though we’ll all soon be in government housing, whether we like it or not.
  • Fly Fishing

  • Is It Time For Rodmakers to Get Out of the Warranty Business? [MidCurrent] – It would certainly force people to rest their rods someplace besides the door jam of their vehicles.
  • Invention Lets Fish Live Without Water [Cutthroat Stalker] – A fly fishing photographer’s dream come true? Heh, nothing can help my photog skills.
  • Elite anglers focused on FKO/IGFA Inshore World Championship [Fishing World] – Coming soon, and on EPSN to boot.
  • Adieu.

    More bigger, more harder

    Following up on the bigger they are, the harder they fall micro-meme:

  • Former presidential candidate and billionaire H. Ross Perot’s family office is being sued by J.P. Morgan to the tune of three-quarters of a billion dollars. The problem – withering collateral against derivative contracts.
  • Media mogul Sumner Redstone is dumping assets to pay off creditors. The problem – piles of debt on top of slumping asset values (and the whopping hundred grand effort from the Midway sale makes it appear like someone is expecting a bailout too).
  • Hedge fund manager Paul Tudor Jones’s flagship BVI Global Fund Ltd. is freezing withdrawals and splitting in two. The problem – highly illiquid emerging market securities brought on by the credit crunch and plummeting commodities prices.
  • Former investment bank Goldman Sachs is posting big losses. The problem – a non-existent M & A marketplace combined with a proprietary trading businesses that is beginning to look like Global Alpha.
  • None of the above mentioned are going to have a problem putting food on the table anytime soon. Still, where would I place my bets?

    Perot and Sumner dry up. For Perot it will be the much vaunted taste for municipal finance countered by a non-existent political profile, while in Sumner’s case it will be simple over-leverage in a dying industry. Meanwhile, Paul T. Jones and Goldman will become big winners as their ships right themselves. Their own bets are in – only time stands in their way, and that’s something they can both buy using planning and action (and a smattering of goodwill) as collateral.

    Wall Street R.I.P.

    Henry Blodget:

    Morgan Stanley and Goldman Sachs will soon be bank holding companies. This means Wall Street as we knew it has ceased to exist.

    They’ll be lining up at the Fed trough, permanently. But I don’t think this spells the end of investment banking – when this round is over, the hedge funds still standing will pick up where MS and GS left off.

    Picture an exchange of white shoes for black boots.

    Departmental Quotes of the Day

    Slightly less amusing than owning banking stocks

    From the Screw FASB And Their Damn Year End Closings Department:

  • Quickbooks for Mac users were caught in an update debacle, with Intuit’s latest patch eating files. Intuit’s initial response: “…our recommendation for now is to turn off your computer and do not use it further.”
  • From the Every Dog Has Their Day Department:

  • “Losers average losers” – Paul Tudor Jones; “Losers average losers, unless both ‘losers’ are Goldman Sachs” – anonymous
  • From the Sallie Mae’s Collateral Is Worthless Department:

  • “To err is Human, but it requires an MBA to really fuc* up.” – Barry Ritholtz
  • From the I’ll Take That Muni At LIBOR + 16 Department:

  • “It is really a situation where states have been making promises that they have to pay for tomorrow and not putting the money aside today.” – Susan Urahn, managing director at Pew Center on the States.
  • and…

    From the Microsoft Ain’t Dead Yet Department:

  • “While you are waiting for it, users are still saying ‘I’ll just send you the Excel file’. While you are waiting for it, 94% of the country is getting shit done.” – one very reasonable software engineer
  • Wall Street won’t sell when you want them to

    Wall Street is catching some flak for refraining on sell recommendations:

    Analysts rarely said “sell” before the Spitzer settlement because they didn’t want to jeopardize investment banking fees. Now, they’re more concerned about maintaining good relations with company management.

    Meanwhile, Ben Stein is throwing Goldman Sachs a one-two for talking their book – right now Goldman is short the mortgage market, and they recently released a less than enthusiastic report on the housing market.

    Maybe Mr. Bueller should quit whining and sell his tech stocks while he can – Goldman recently downgraded many of those as well.

    Goldman Sachs Alpha to Fail?

    Alpha, as in GS’s quantitative Global Alpha fund. Someone is on the other side of every losing trade, and once one of those “someones” finds a flaw in other’s methodologies they pounce. Who’s the culprit here?

    UPDATE: More on GS, from PK. This isn’t the Alpha fund getting assistance (yet), and David Viniar makes that clear. Also note that Hank Greenberg is one of the investors stepping up to help out – I find it somewhat ironic considering his previous “employer” just finished touting how comfortable they were with their fixed-income exposure, which is essentially saying “we’re not in the game, but we’d maybe, kinda like to be now.”

    And still more from Mr. Kedrosky on that “other side” of the quant coin I already mentioned.

    UPDATE 2: At least one fund has come clean for being other the other side of some sub-prime trades.