Communism in NYC

NYC Commies are giving SF Hippies a run for our honest and hard-earned money.

This has gotten beyond ridiculous and would be comical, except it shows the cretinism of today's youth trying to emulate their hippie parents from the 60s. Not in the sense of trying to take down the evil rich white man or stop a pointless war, but in the sense of rallying for causes they choose not to understand. Protesting against whatever is popular purely for that reason, and thinking they are doing the world a service through their "creativity" and "self-expression".
At least they're not calling Iraqi vets baby killers ...yet (but once PE money dies down from the credit crunch, who knows who they'll turn on next).

clipped from www.nytimes.com A Movie and Protesters Single Out Henry Kravis Bells will be ringing, and carolers will be greeting the Upper East Side neighbors of Henry Kravis this morning for a sidewalk screening of the first of a series of short films crusading against private equity firms. Directed by Robert Greenwald, the film starts by tallying Mr. Kravis’s income: “He made $450 million last year,” the narrator says, “which comes out to $1.3 million per day, or $51,369 per hour every hour of every day.” Then it immediately cuts to an interview with Margaret Konjevod, a nurse. What Mr. Kravis makes in an hour, “that’s what I make in a year, if I’m lucky,” she says. Today’s protest is the latest indication that the reaction against the wealth created by private equity funds has become part of a populist communist movement. [You know what we call it when you make everyone’s salary based on need rather than what the free markets deem equilibrium – yes, that’s right, Marxism. You want to really stick it to PE? Tell your pension funds not to invest in them. Sure, you'll forgo all the profits KKR and other firms gives to their investors, but your underdeveloped excuse for a conscience will seem Cristal clear to you while you're drinking 40s out of a dumpster after you retire, pun intended.] Some industry insiders may blanch at his attempt to simplify, or as he would say, “boil down” his message. In one voiceover, private equity is described as a firm that takes over “public companies using primarily borrowed money.” “To pay off this debt,” the film says, “they then sell off assets of the companies, fire thousands of workers and radically cut benefits of the remaining employees. It is the same product, in the same building, with the same customers as before.” Mr. Greenwald said he did not try to interview Mr. Kravis before releasing the film and had not consulted anyone in the industry. He said that he planned to reach out to Mr. Kravis and hoped that he would participate in future productions. He then suggested: “If you don’t participate, the story gets told without you.” [Right, first you smear people with your own un-researched and invented shit, and then, when they rightly choose not to associate with such skewed scum, you claim they're not "participating" - thus giving you a carte blanche to continue your fecal portrait. Michael Moorre better watch out - Greenwald has figured out your movie-magic secrets.]

Greene on the New Princes

My friend sent me this article today by the very lucid Robert Greene writing on Machiavelli (as he often does for a living) in the 21st century. I had to add my own two cents. I highly suggest you read the article first, and then my opinions on it.

clipped from www.powerseductionandwar.com Necessity governs the world. When you feel necessity biting at your heels, you are moved to respond in some way that is creative. It is either that or die. I must constantly create challenges for myself, find some way of feeling limited and pressured, never resting on what I have done in the past. Fortune rewards those who are bold; she is a woman. When I enter a negotiating situation, I always make sure I feel that I can walk away from an offer. Some want to rule, others to be ruled. In Machiavelli's world, people are not victims. Those who suffer under some form of tyranny inevitably have gotten the kind of government they want or deserve. They are unconsciously implicated in the process. No one, in Machiavelli's universe is some passive actor who is acted upon and injured.

Greene elaborates on a principle in his first section that I find absolutely critical in gaining, maintaining and expanding personal success – never feel complacent. If no outward challenges exist then create new ones to maintain your drive. To use the metaphor of a businessman as a shark – if you stop moving forward you die, thus one must find reasons to keep going. The fact that this lucid comparison has such negative connotation in our present society – where children are encouraged to rest on their insignificant laurels, where everyone is “special”, where capitalism is equated to fascism by the ignorant masses, speaks volumes to its laggard nature.

Greene’s discourse on boldness is also poignant, though this negotiating strategy is not novel. In displaying the will to walk away from a deal, a job, a trade, etc. you flex power over whoever sits in front of you. Of course should you find yourself facing another strong-willed individual on the other side of the table he may find this display arrogant, or worse – imminently dangerous to his position and thus seek to undercut you. Having a superior of weaker will than you is thus often useful, so long as you can stay self-motivated.

So far as peasants preferring to be ruled, that’s a sure fact that I’ve observed in depth while growing up in Russia. If more Americans understood this they would be able to see how Putin can govern Russia with a diamond-studded iron fist and still have tremendous support of the people. Ironically, our current complacent culture in America feels that it cannot allow itself to be lead and is thus causing itself tremendous pain and distress – but unwilling to chastise itself rather than its inept leaders and cause change the only way it can occur – through action and pragmatic self-betterment.

Party Like A Rock*

Seriously people, I can't make this ish up.
If you thought forcing a quant to take estrogen at SAC was the fruit-battiest Wall Street got ...well, just wait till you meet Tiger - the gay go-go dancer.

clipped from www.nytimes.com A life of private jets and black-tie balls ended with Seth Tobias, a wealthy investment manager and a familiar presence on CNBC, floating face down in the swimming pool of his mansion [in Palm Beach, FL]. Bill Ash, a former assistant to Mr. Tobias, said he had told the police that Mrs. Tobias confessed to him that she had cajoled her husband into the water while he was on a cocaine binge with a promise of sex with a male go-go dancer known as Tiger. Mr. Ash has a past: he has been arrested at least 11 times on charges ranging from larceny to prostitution; He has been called Mr. Madam because of a past connection he says he had to Heidi Fleiss, the Hollywood Madam [and because he likes going to galas in fancy sequined dresses]. Through her lawyers, Mrs. Tobias refused to comment for this article. In a recent interview with The Palm Beach Post, she said, “I’m broken. I haven’t gone out in six weeks. I’ve been in and out of the hospital. I just pray all day and wonder why people could be so evil.” [If a socialite didn't go out for six whole weeks - you know it's serious. If she just wanted the money she'd clearly be spending it - and not just on hiding the evidence...] Mrs. Tobias spent $9,628 to have the pool drained and resurfaced days after her husband died, according to documents filed in an unrelated case. In court filings, the Tobias brothers invoke Florida’s “slayer statute,” which prohibits inheritance by a person who murders someone from whom they stand to inherit. They claim she “intentionally killed” her husband “by asphyxiation and drowning.” One lawyer representing Mrs. Tobias, Gary Dunkin, said he was shocked by the accusation. “In my 25 years practicing law, this is the most reckless allegation I have ever seen,” he said in court. [Dunkin' has never seen relatives accuse a socialite of murdering her estranged husband for money because he spent most of his 25 years practicing law at Krispy, Dunkin & Happy, which lardly deals only in cases pertaining to deliciousness.] Mrs. Tobias' [other] lawyers, which include her prior husband [with whom she'll share the "legal fees" paid by the husband's estate if she doesn't win], Jay J. Jacknin [aka Triple J, Jizza Jack, and Jack'n J], have asked the court to put off her depositions, citing her “psychiatric condition”. They said she hired contractors to empty the pool because she was distraught over her husband’s death [not going according to plan]. Mr. Tobias never ran with the titans of Wall Street. He was a small player in an industry where successful managers command billions or even tens of billions of dollars [so you can't even imagine what kinda crazy shit goes down at the Cohen and Simons houses]. Mr. Tobias’s life was apparently as volatile as his investment returns. [Mr. & Mrs. Tobias] secretly frequented a gay bar called Cupids in West Palm Beach, in a strip mall along a main thoroughfare. It was there, according to Mr. Ash, that Mr. Tobias first met Tiger. “Seth used to come in here back when it was crazy,” said Adiel Hemingway, the longtime manager of Cupids. As a flat-screen television blared hard-core gay pornography, he said that Mr. Tobias often came to the club with his wife. Hemingway took out a picture of Tiger. Tiger is blond and covered with tattoos that look like stripes. “I know exactly who he is, but I’m not telling you,” Mr. Hemingway said.

Things aren't looking good...

If all the massive financials' writedowns weren't enough we saw the SPX go under its 200-day MACD. I think tomorrow could be really bad, and don't think a good unemployment number is going to save you (actually the only thing that could is some big boys covering shorts or going long if their trigger was the 200 MACD). Get out of FXI, short the SPDRS (and the dollar) and hold on to your golden balls.

Oh no they didn't!

Bloomberg delivers Jimmy Joint & the Dirty Bears the ultimate smackdown on behalf of Lloyd Blank-too-fine & his Golden Sachs.

clipped from www.bloomberg.com When Goldman Sachs Group Inc. employees cash their year-end checks, they'll have enough money to buy Bear Stearns Cos. Goldman, the biggest and most profitable U.S. securities firm, set aside $16.9 billion to pay salaries, benefits and bonuses in the first nine months of 2007, according to the company's third-quarter earnings report. The stock market values Bear Stearns Cos., the fifth-biggest firm, at $14.7 billion. While analysts expect Goldman to top last year's profit record, they estimate that Bear Stearns's earnings will drop 27 percent. Goldman's shares have added 12 percent this year while Bear Stearns's are down 37 percent. Bear Stearns Chief Executive Officer James Cayne, 73, has watched the market value of his firm decline more than $10 billion from its February peak. Bear Stearns, straddled with subprime losses, is rumored to forgo the traditional cash bonus, choosing instead to hotbox its entire 383 Madison Avenue headquarters and provide a box of Cheetos to all employees except Analysts and Junior Traders who will get $100,000 par-value of Bear Stearns commercial paper.

Jimmy the Joint

Brilliant article written by Warren Spector in the WSJ.

Some choice bits:

The fund trouble was a shock for Bear, which was known as one of the Street's savviest risk managers. For years the firm relied on a system of "ferrets," or managers who monitored trades, to spot problems.

Ferrets? I think you meant Weasels…

Investment-firm chief Alexandra Lebenthal brought her 11-year-old son to visit Bear a few years back. She says she introduced him to Mr. Cayne, who pulled her aside and said, "That kid's got a rotten handshake. He's going nowhere in life."

Billy Bob Thornton is Jimmy Cayne in Dirty Bear – coming to a theater near you this Christmas!

Attendees say Mr. Cayne has sometimes smoked marijuana at the end of the day during bridge tournaments.

After a day of bridge at a Doubletree hotel in Memphis, in 2004, Mr. Cayne invited a fellow player and a woman to smoke pot with him, according to someone who was there, and led the two to a lobby men's room where he intended to light up. The other player declined, says the person who was there, but the woman followed Mr. Cayne inside and shared a joint, to the amusement of a passerby.

Asked more generally whether he smoked pot during bridge tournaments or on other occasions, Mr. Cayne said he would respond only "to a specific allegation," not to general questions.

Girls were hot wearing less than bikinis
Bear investors driving little Minis
Jealous 'cause I'm out getting mine
Jay with a joint and Spector with Subprime

Even when he wasn't there in person, Mr. Cayne was hands-on, say other associates. Mortgage-division head Tom Marano, who temporarily left his post over the summer to help stabilize the two flailing funds in the firm's asset-management division, says Mr. Cayne offered some helpful advice on handling irascible creditors during a critical period in July. Mr. Marano says the CEO told him in a phone call to "keep your Irish down," or cool his temper and try to negotiate calmly. (Mr. Marano is of Irish and Italian descent.)

Guess Jimmy can blame the whole crisis on the “Luck of the Irish”

On July 12, chatting with visitors over lunch, Mr. Cayne seemed less interested in discussing the markets than in talking about a breakfast-cereal allergy and his stash of unlabeled Cuban cigars.

Damn, Jimmy-Jay just str8 busted up his private stash. Obviously blazing with the analysts is a brilliant move to help Bear get favorable coverage again. What's that, you got some munchies? Here - just eat some of Bear's commercial paper.

Friends of Mr. Cayne say he is troubled by the summer's events and concerned about his legacy.

Yeah, if I just lost 61% YoY in income I’d be “troubled” too. I wouldn't be concerned about his legacy (say what?) - Bear's being sold to China, anyways.
You can’t make this ish up. Dirty Panda Bear in da house, suckas.

Burning New Money at the Stake

FYI: The Alternative Minimum Tax or AMT was an poorly thought out piece of tax legislation designed to attack 155 rich folk from 1969 that's coming back to haunt the IRS and lawmakers.

Now Washington Democrats are seeking to cover up this blunder and boost their ratings by taking money from evil capitalist pigs who made their millions in ways these simple minded totalitarians cannot understand, which obviously makes hedgies evil charlatans (even if they brought great wealth to their investors) - hmm sounds a little like the Catholic church in the Dark Ages.

clipped from today.reuters.co.uk The top tax-writer in the U.S. House of Representatives said on Tuesday consideration is being given to raising taxes on private equity and hedge fund managers to help pay for temporary alternative minimum tax relief. Adopted years ago to make sure rich Americans paid at least some tax, the AMT now hits less well-off people it was never meant to touch. Without quick action from Congress, the AMT will soon affect millions more taxpayers. The New York Democrat last week unveiled a sweeping, $1 trillion tax reform bill that included a $47 billion "patch" to fix the AMT for one year. Rangel's tax reform bill -- dubbed "the mother of all reforms" on Capitol Hill -- also proposed more than doubling the tax rate on the carried-interest profits of private equity firm managers and to prevent hedge fund managers from sheltering income in overseas tax havens.

Ignorance is a Piss Poor Substitute for Intellect

I wrote a comment on this article about the II's 40th Gala in NYC in response to the three idiots who I quote below.

• 9. October 23rd, 2007 10:50 am

  “Is this where we complain about people who have money?”

  No, this should be a post where we complain about HOW people make their money. I would argue that money in and of itself isn’t anything to abhor. How one makes their money is another issue. I would argue that the predation of this particular group of people, and in turn the corporate entities and attitudes they have spawned, on both our society and industry has been at a net cost to our society. Their half-hearted philanthropic attempts to achieve some form of personal reconciliation for their lifetimes of plundering society’s coffer won’t do a thing to reverse the ills we have borne as a result of their greed.

  — Posted by John

• 10. October 23rd, 2007 11:00 am

  All these people are from Virtual Money Making Field, just CON-ARTISTS. We must not complain about people who have money, but, look into how they got it? American Capitalists are joining the Chinese Communist Leaders to suck the blood of 1.2 billion Chinese (sorry deduct 1 Million Communist Party Members from 1.2 Billion). In the process, they will wipe out Middle Class from America. India with all its faults have democracy and exploitative power could not be concentrated at the top, like that in China.

  — Posted by Shyamal Ganguly

• 11. October 23rd, 2007 11:26 am

  Now, if we could just focus all that ambition and drive on something socially responsible, like sustainable energy sources and clean water, that might provide a real future for all on this planet - for all their so-called success, these people truly have simply exploited the rules of accounting and tax laws to create an illusion of prosperity.

  — Posted by Dan Kiely

My Response to the Above:
Looking in from the window frosted by what you consider unbiased media must be fun, John, Shyamal and Dan?

Private Equity takes broken down, misvalued, companies and fixes them for the benefit of everyone involved. The people who get laid off in these deals are the excess fat that needs to be trimmed to make the firm lean and profitable again. Nobody in America has a guaranteed job - if you want that please go live in a Communist country (like I have for 11 years) and you'll quickly understand how wonderful it is to have the chance to excel based on your own merit.

Anyone who thinks that the only way people in finance make money is by "exploiting" accounting and tax laws should at least try to take a Finance 101 class before running their mouth. That statement is simply absurd and shows nothing short of a complete lack of understanding.

Regarding "half-hearted philanthropic attempts", which certainly shows how little facts you know (or care to admit to), these people could care less about your approval of their actions and don't feel the need to redeem themselves in front of anyone. They got to where they are through hard work, quick wit and sharp intellect. Certainly much philanthropy is done for superficial reasons (by every kind of wealthy individual across the world), but do you really think that all these people care about is another blurb in the paper or their name on yet another building? No - they genuinely want to give back to the very rabid mouth that wants to do nothing but bite their hand at every opportunity.

Finally, and most importantly, don't forget who the biggest investors in Private Equity and Hedge Funds are - institutions like college endowments and pension funds. Yes - blue collar working class Americans and students who are unable to pay for college on their own benefit greatly from private equity and hedge funds doing well. As for charging 2&20% - part of capitalism is having a free market, and nobody lucky enough to have invested in RenTech is complaining about being charged 40% with the returns they're getting.

These people are neither angels nor demons - they are simply more wealthy than you and made their money in ways that you choose not to understand except as how they are relayed to you by scapegoating sensationalist (and just as ignorant) media outlets.

clipped from dealbook.blogs.nytimes.com Institutional Investor, the first trade magazine to cover Wall Street, celebrated its 40th birthday Monday by throwing itself a party at the American Museum of Natural History in Manhattan. Masters of the Universe from around the nation and the world flew in for the event. The highlight of the evening was when Mr. Kravis jokingly apologized to his peers in the audience for charging his investors 20 percent of profits in 1976, which became a benchmark for private equity and hedge funds. He said that, at the time, there was no going rate, so he and his partners decided 20 percent was fair. In retrospect, he said with a laugh, “You could have gotten 25 percent.” Then Mr. Simons of Renaissance took the stage. He famously takes more than 40 percent of all profits from his fund investors. “We blissfully ignored” the benchmark Mr. Kravis created, he said.

South Park Called Bono

Bono is indeed a piece of crap suckling at the collective "biddies" of the wealthy and then pooping some of that attention and wealth onto the poor. (If that made no sense watch last week's South Park episode 1102 "More Crap").

Instructing people, many of whom just lost half their yearly income (if not their jobs) about giving during hard times, and at once telling them about what a rich jet-set rockstar he is.

clipped from www.boston.com You've got stuck in a moment and now you can't get out of it. These lyrics to a song by Irish rock band U2 might best describe the mood at the Mortgage Bankers Association's big annual conference. The glum mood was broken somewhat by U2 singer Bono, the featured speaker at the association's gathering. "It was just so inspirational," she said, as co-worker Sal Mazzocca, seated next to her, sang a few bars of the U2 hit "Running to Stand Still." Bono charmed the bankers and lenders with stories about his "bad boy" days as a rocker. Bono - said to be just 5 feet 6 inches tall - wore platform shoes on the podium. He also appealed to the audience's collective conscience when he urged them to do humanitarian work or give to charities, even during tough times. [and now - the punchline....] Bono, who told the audience he flew in to Boston on a private jet, was whisked away after his talk.

No Shit, eBay!

I recall trying to explain to a Lazard monkey during my interview there why this deal was going to kill eBay over 2 years ago. Fortunately for me the dumb fuck insisted that according to his model this deal would pay out in 5 years, and I didn't get my job because I told him he was wrong. Good thing - Lazard kills its analysts. Literally (I was going to link to the article about the guy who died @ Lazard pulling a week of all-nighters but couldn't find it). Incidentally, since Morgan and Merrill were the bankers why did he build a valuation? Guess Lazard didn't make the cut on that one. Whoops.

The best part of this article however is the nugget (like the one you find in the toilet after plowing through a porterhouse) from Aaron Kessler of "we pretend we're not middle market" bank Piper Jaffray. Yeah, Aaron - Skype should really look at diversifying into search engines. It's an obviously untapped market, and one Skype could capitalize on with all their experience in VoIP. I shouldn't be surprised, though. Any "research analyst" who can pick stocks with any semblance of accuracy is snapped up by buy-side shops and gets paid at least quadruple what they'd make on the sell-side. So if you've been at public sell-side research for longer than 2 years you're a failure at life. I'd tell you to jump out the window, but most banks cleverly place their research analysts on the lower floors.

clipped from business.timesonline.co.uk EBay, the internet auction site, admitted yesterday that it had overpaid hugely for Skype. EBay bought Skype in 2005 for $2.6 billion. Yesterday it warned shareholders that it would have to take an impairment charge of $900 million (£450 million) because it had valued the group too highly two years ago. Niklas Zennstrom, Skype’s founder, would step down as chief executive of Skype to become nonexecutive chairman. The online auctioneer has cut bonuses due to Mr Zennstrom and others by 60 percent because it was so disappointed by Skype’s performance. It would pay only $530 million in cash to the Skype founders in the only and last payment of its kind. An eBay spokesman said: “Skype has not performed as well as we would have hoped. But we still believe Skype to be an extremely valuable asset.” Aaron Kessler, an analyst at Piper Jaffray, the US investment bank, said: “They haven’t really figured out a way to monetise their clients – they haven’t introduced new services such as search engines.”

Gettin' them poor folk to vote

Falling behind Hill-Dog the Obaminator wants to steal my money to get the poor vote, while showing once again that so far as Democrats are concerned poor people are little children who can't possibly be held responsible for their actions (like buying a house they could never afford) and the American Dreams means never having to say you're sorry.

clipped from online.wsj.com Obama wants to give 150 million working Americans a $500 tax credit, expand relief for homeowners, eliminate income taxes for seniors making less than $50,000 and simplify tax returns so millions of Americans can file in less than five minutes. Obama said more Americans who own their homes should get relief from mortgage payments. The current mortgage interest deduction only goes to those who itemize their taxes, while he would create a universal mortgage credit of 10% of interest payments that the campaign says would benefit an additional 10 million homeowners. Obama's campaign said he would pay for his proposals by closing corporate-tax loopholes, fighting international tax havens and raising the top rate on capital gains and dividends. The Illinois senator told Wall Street investors that they need to reappraise values that focus on their own gains at the expense of struggling Americans.

Al-Qaeda Feels the Subprime Burn

Nobody is safe from subprime contagion, not even terrorists who took out second mortgages on their caves to pay for new goats, chickens and ingredients for IUDs, as Osama bin Laden said he felt his minions' suffering from high rates in a video released September 7th. Never mind that interest is forbidden and there are no late payments under the Shariah law of Islamic banking - George Bush has found a way to tax the Taliban.

Global warming is also a problem for the struggling cells as packs of C4 strapped around the torso aren't exactly breathable and donkeys are known to produce more toxic emissions than any infidel's Hummer.

Despite his condolences the dapper dictator appeared somewhat insincere addressing the problem of poverty with his slick new beardcut and die job that screamed Redken 5th Ave. In fact my intel tells me Osama may not be hiding in Afghani mountains after all, but staying with his new life partner and John Edwards' stylist, Joseph "bin Fabulous" Torrenueva.

clipped from www.bloomberg.com In the Sept. 7 video, bin Laden spoke about ``the reeling of many of you under the burden of interest-related debts, insane taxes and real estate mortgages, global warming and its woes,'' Sajjan M. Gohel, Director of International Security at the London-based Asia Pacific Foundation, said. ``Bin Laden appeared to have a trimmed and dyed beard, which ran to counter reports that he is gravely ill from kidney disease, or holed up in a cave and cut off from the outside world,'' Gohel said in an e-mailed statement.

Beirut in the WSJ

Read the article. My hat is off to anyone who can turn chugging beers into a $1mm/year revenue stream in 3 years. Incidentally, the custom beer tables over at http://www.bjsbeerpong.com/ look amazing and I will be picking one up. The suitcase portability is great both for gestapo campuses and smaller urban apartments. Cheers!

clipped from online.wsj.com

The Value of Money

Had a discussion with some intellectual friends today about the joys and burdens of money, and how as it relates to a fulfilling life of happiness, and whether the latter can be achieved with the former if one makes its acquisition his central pursuit. Here is a summary of my thoughts on the matter for all those curious:

1. Your family and genuine relationships (that is, those which would withstand any material stress test) matter the most in life no matter who you are or what's in your wallet.
2. “Friends” who hang around you because of your socioeconomic status are leeches and should be treated as such - in the medical sense - that is, you should only allow them close to you if they serve a purpose and then immediately discard them.
   
3. Money is an enabler of greater enjoyment of our immaterial possessions. It is perfectly rational to live in the moment instead of only being focused on working to make your "tomorrow" better since that day, as my friend pointed out, will never come if you set no clear goals and become caught up in a neverending race to acquire ever greater wealth. What if living in the moment, however, involves chartering a jet to Paris for a weekend with the woman you love? What if it involves buying a work of art you’ve always admired or populating your library with first editions? Do you need these things to be happy? Of course not. All man needs (loosely based on Maslow's Hierarchy) is physical nourishment, intellectual stimulation and love.
4. Thus I agree that it is worthless to chase money aimlessly (and especially if you must sacrifice your relationships, your youth or your health) but if you truly love what you do and by luck it happens that this profession makes money then you shouldn’t feel like your life lacks meaning just because you’re not engaged in what society deems to be more creative or nobler pursuits. A person who derives his greatest joy from structuring derivatives should not try to be a poet, painter or doctor. Doing what's against your nature is never right.
5. A litmus test I often ask myself is "Would I still do this job for free and if I just won the lottery?"
   
6. I’ve often wondered myself what other careers I could’ve pursued, but the reality is we have many talents and you won’t be able to explore and grow them all fully. Thus you have to compromise and pick your path, and in doing so choose the one that you will enjoy the most, not the one that will lead you to the greatest riches, fame or power. I don’t know many people who achieved greatness in finance or otherwise who did not love what they did. You need passion to excel.

Goldman Sachs Is Perfect...

...everyone else is just cramping their style:

clipped from www.bloomberg.com Goldman Sachs Group Inc. blamed its $3 billion in hedge-fund losses this month on too many quantitative managers making the same trades. "Successful quant managers will have to rely more on unique factors, while we have developed a number of these factors over the last several years, in hindsight we did not put sufficient weight on these relative to more popular quant factors." {Hate to break this to ya, but this statement means your model was not unique as a whole and furthermore that you didn't give these "unique" factors enough weight to actually trade based on them - i.e. the factors are crap used for marketing materials, and you have the same damn model as every other quant fund.} Goldman's quantitative funds use six major investment ``themes'' that it identified as momentum, earnings quality, valuation, profitability, analyst sentiment and management impact. All suffered ``extreme negative returns'' from July 30 through Aug. 10. {Gee whiz these sure would sound unique...if it was 1960s when Vinnys roamed the floor of the NYSE like brightly colored dinosaurs.} Last week, ``quantitative portfolios fell (and rose) by unprecedented amounts -- far more than at any time in the history of our data,'' according to the Goldman report. {The only thing that rose was the P&L at Goldman's prop desk who found out about the liquidations early and front ran the trades, notes an inside source.} The world's most profitable securities firm and second-largest hedge-fund manager lost $1.4 billion, or 28 percent, in its Global Equity Opportunities fund this month while the flagship Global Alpha, fell 27 percent year to date. {Fortunately, unlike Smelly Bear Stearns Goldman's got plenty of money in the Sachs to keep these funds afloat - if they were to liquidate their reputation would take a hit and cause serious long term damage to the firm. Bear, on the other hand, has no reputation to speak of and is thus scrappily taking all of their investor's money so they can keep themselves afloat long enough to get CEO Jimmy Cayne's golf score down to non-laughable levels.}

Three Horsemen of the Crapocalypse

I know it's been a while since I posted. Some of you were wondering if I got killed in the avalanche that started rolling with subprime and got bigger as it piled into credit, then equities and then the global macro markets. The Austrians were onto something, that's for sure. Rest assured, however, that I am alive and well - a tsunami of volatility can be a beautiful thing if you know how to surf it. Of course with so much free money being stuffed into the markets by funds liquidating their assets for pennies on the dollar (think 10 Amaranths and I'm John Arnold with a bigass fishing net) there has been no time left to pen witty banter on a blog. I got post ideas, though and will get to them when I have time. Meanwhile check out these three intraday charts that spell either doom, boom or opportunity depending on your positions:

VIX:
and SPX:
Treasuries (TYU7 Future):JPY
This poor otter was caught on the tracks of the Vega train today:

Don't worry little buddy, the markets will rebound ...just not this week. Once S&P breaks the 1400 floor more stop losses will get triggered (leading to a further Treasury and Yen rally as hedges and carry trades are unwound). More bodies of failed PMs will surface (but we all know Portfolio Managers never die - they just go to hell and regroup [unless the FERC gets all pesty]).

Stealing money from your friends for political advancement

John Edwards clearly learned something (besides poverty) at Fortress - life, like trading, is a zero sum game and someone always has to take a loss. In this case - his former colleagues.
Johnny was overheard saying from behind his modest ivory and platinum desk while lighting a handrolled Cuban with a $1000 bill - "Hey, it was either that or no more $400 clips, and I gotta look good for the campaign. The wifey aint gonna last past the primaries."

clipped from online.wsj.com Democratic presidential candidate John Edwards proposed increasing taxes on private-equity and hedge-fund managers in three ways [through extortion, pogroms and inquisitions] saying it would make the tax code more fair without damaging U.S. capital markets [it's not like those hedgies could just go public on the LSE and move themselves to London or Dubai]. Taken together, the former North Carolina senator asserted, these steps would raise [steal] $4 billion to $6 billion a year [that will fund a program to rid the world of sex slaves by buying the market and putting them into a safe compound adjacent to the White House]. Mr. Edwards, himself a former adviser to the hedge fund Fortress Investment Group, thus became the first major Democratic candidate to wade deeply into the controversy sparked by the explosive growth and profitability of hedge-fund and private-equity firms [because making money by improving failing companies is un-American - if you want to be a capitalist bastard go to China!]. While making amelioration of poverty a centerpiece of his campaign, the one-time trial lawyer earlier this year reported that he had received $1.7 million in salary and investment income from Fortress, where his holdings total $16 million [but not for long! Unexpected drawdowns are a bitch.] Mr. Edwards's stance could help shore up his populist credentials after criticism of his personal wealth and lifestyle have eroded his poll standings [surely you jest!].

Stylish Condoms for BSDs

News like this always worries me. When Cavalli and Versace start designing subdued (!!!) clothes for hedgies I get a desperate need to lock down another $500mm infusion of capital pronto and find it hard not to lend at least some credence to naysayers preaching of the hedge fund "bubble." The good news, however, is that maybe this new trend will tone down the effeminate rainbow that has been painting men's collections in recent seasons brighter than it ever has since the eighties.
Incidentally, highly recommend reading page 2 of the article for those with a cursory, but developed, interest in fashion. Dsquared and Jil Sander looking good for '08

clipped from www.nytimes.com "HEDGE funds, hedge funds, hedge funds,” Richard David Story said before the Ferragamo show on Sunday when asked to account for the current mood in men’s fashion all pitched to a guy with both a high net worth and a 30-inch waist. To judge from all the $700 cotton poplin trousers (Bottega Veneta), $250 flip-flops (Hermès) and $20,000 satchels in matte tobacco crocodile (Tod’s) on offer, the fractional-jet-share crowd has coffers so deep that there’ll be plenty left over for chronographs or John Currin paintings. That Bottega Veneta man — lithe, young, carefree in his moneyed assurance — seemed to be everywhere. He was spotted at Roberto Cavalli’s unexpectedly restrained show held in a cavernous disco near Linate Airport wearing not the leopard spots and junky rocker paraphernalia one expects from this designer, but instead the subdued suits and the slouchy suede driving shoes favored by the Maserati crowd. He appeared again in shiny trench coats, knife-slim suits and a muted palette at the Versace show, designed this season by the Russian-born Alexandre Plokhov, formerly of Cloak. Another avatar of the hedge-fund hottie turned out at Valentino’s brand-consistent presentation, notable as usual for natty Roman tailoring styled in a way that is often more than a little bit campy. Wasn’t that double-breasted white jacket nipped at the waist once a uniform of sorts among the high-end gigolos populating the piazzetta in Capri?