Florence and Grace, shown yesterday after the resumption of trading, are the only two NYSE employees allowed in the exchange’s “nerve center.” (Photo: wikipedia.com)
At 11:32 a.m. yesterday, the New York Stock Exchange suspended trading for almost four hours (it reopened at 3:10 p.m.). Apoplectic Cassandras everywhere were immediately screaming that the US financial markets were under a “cyber-attack,” but at 12:09 p.m, the NYSE, in attempt to quell fears, issued an explanatory press release so incoherently worded that it may have been fed through the Nazi Enigma machine. The Exchange attributed the problem to a “configuration issue,” and here is an excerpt from the NYSE’s atrocious attempt at corporate (mis)communication and damage control:
On Tuesday evening, the NYSE began the rollout of a software release in preparation for the July 11 industry test of the upcoming SIP timestamp requirement. As is standard NYSE practice, the initial release was deployed on one trading unit. As customers began connecting after 7am on Wednesday morning, there were communication issues between customer gateways and the trading unit with the new release. It was determined that the NYSE and NYSE MKT customer gateways were not loaded with the proper configuration compatible with the new release.
In attempt to parse the gobbledygook, yesterday afternoon Bud Fox News‘ Silence Bellows slipped past the NYSE’s security detail and went looking for the real cause of the outage. She quickly reconnoitered the trading floor, full of high powered computers and dazzling technological equipment, and decided the answer wasn’t there. Then down a dark corridor on a mostly unoccupied floor of the NYSE building at 11 Wall Street in lower Manhattan, Silence came upon a door cryptically marked “Ticker Tape Room: Authorized Personnel Only.” Behind that door was a room that time had forgotten, and Silence discovered that like the Wizard of Oz, who’s really just an ordinary old man from Omaha standing behind a flimsy curtain, the US’s best known stock exchange, for decades a symbol of American capitalism, is really just a Potemkin village of CNBC photo ops, behind which two anachronistic ladies, Florence and Grace, armed with a ticker-tape machine and tote board, try their best to prevent the NYSE from losing more market share to NASDAQ. Continue reading →
Fieri and Cohen: They probably deserve each other. (Photo: Getty Images (left), EPA)
As reported in last week’s New York Post, Steven A. Cohen, the erstwhile ringleader of insider trading emporium SAC Capital, was in Los Angeles recently and made a brief appearance on Guy Fieri’s Food Network Show. The article also revealed that Fieri, shameless huckster of a disgraceful concoction called Donkey Sauce, and Cohen have been friends ever since the latter paid the frantic “food personality” (it’s not clear that he can be called a chef) $100,000 to drive around with him in Connecticut and provide a private version of Fieri’s puzzlingly popular TV show, Diners, Drive-ins, and Dives.
According to sources associated with the Food Netowrk, it was only while the fatuous foodie Fieri was basking in the sordid afterglow of Cohen’s visit that the former realized that he’d been played for a fool as badly as that octogenerian neurologist who was corrupted and hoodwinked by one of Cohen’s underlings. A production assistant who asked to remain nameless told Bud Fox News:
After the taping was over and Cohen had taken off, we were all standing around having some “Salted Whiskey Caramel Fool” [BFN: supposedly one of Fieri’s signature dishes, it’s an alimentary-canal-affronting hodgepodge of sea salt whiskey caramel sauce, macerated strawberries, toasted house made pound cake, fresh whipped cream and hazelnut brittle], when it hit Guy like a ton of bricks: Cohen had stolen all his secret recipes for his upcoming restaurant chain. It was like that scene in The Usual Suspects when Chazz Palminteri drops the coffee cup and realizes that Kevin Spacey is Keyser Soze.
Continue reading →
Steven Cohen’s trainees will learn a new twist on a classic line from the movie “Glengarry Glen Ross.” (Photo: Alec Baldwin in movie “Glengarry Glen Ross”)
In news that is beyond parody and a big middle finger to regulators and those simply trying to lead ethical lives, Bud Fox News has learned that Steven Cohen’s Point72 Asset Management is starting a training program. The excerpt below is not from The Onion or some other satirical organization; it’s from Friday’s New York Post:
Steven A. Cohen has hired a hedge fund industry veteran to head a new training program designed to pass the billionaire investor’s stock-picking skills to a new generation as he rebuilds after an insider trading scandal.
The program, which will be composed of an eight-week summer program for 15 college interns/juvenile delinquents and a longer program for 15 recent college graduates/potential convicts, will cover financial modeling, stock research, securities laws (ludicrously, in a 2011 deposition, Cohen said he was not familiar with Rule 10b5-1, the SEC rule that defines insider trading), and, if you can believe it, ethics and compliance. It’s as if Tiger Woods were teaching a class titled How to Resist Cocktail Waitresses and Stay True to Your Wife.
According to sources, the curriculum will focus on three modules:
- Doctor, Doctor: The trainees will interview 50 doctors (all with access to market-moving, non-public drug trial data) and cull out the five best candidates to be dupes in insider trading schemes. Each trainee will have to justify his/her picks with a five-page paper. Coursework will be based on former SAC analyst, and convicted insider trader, Mathew Martoma’s relationship with erstwhile U. Michigan neurologist Sid Gilman, who was oh so eager to help.
- Consulting 101: Trainees will be taught how to extract insider information from the professional consulting class. Rather than use too many examples from SAC’s own knavish history, instructors of this module will perform a case study of the Raj Rajaratnam insider-trading case, highlighting how the urbane Rajat Gupta, the former Managing Director of McKinsey & Company, flushed his reputation (and two years of his life, thanks to a prison sentence) down the toilet by passing to the fat man insider information on Goldman Sachs (Gupta was a board member), P&G (again, board member), and Berkshire Hathaway.
- Six Degrees of Steven A. Cohen: This technique is quite possibly Cohen’s pièce de résistance. Trainees will be taught how to create a complicated chain of communication with sufficient contacts between them and the original source of insider information (Consultant A tells analyst B, who tells trader C, etc…) that trainees will have “plausible deniability” with respect to the current preposterously lenient insider trading laws, which we wrote about here. One might argue that Cohen cunningly used this technique in the Martoma case.
Continue reading →
Buffett to Obama: “…and I want lifetime supplies of Coke and ice cream, a choo choo train, and a veto of the Keystone Pipeline.” (Photo: Huffington Post)
Last week, Fortune published an interview with Warren Buffett, the world’s third richest man (worth $73 billion), in which he revealed that he drinks at least five Cokes a day and tries to eat like a 6-year-old child. Given the Omaha Oracle’s crackpot comments, it’s about time to consider a new theory for his years of successful investing: The guy is a complete idiot who’s riding the greatest dumb-luck investing streak of all-time. Here are some of the interview’s highlights: Continue reading →
Wall Street’s version of this…
…is this CNBC program
At the nexus of entertainment, big-money television, and the average person’s desire to have more money, there was born a 24/7 buisness news cable channel called CNBC. Although there is the occasional interesting interview with a captain of industry, financial fat cat, or respected economist, the vast majority of what this blow-show propagates is not fit for consumption.
Take, for one example, “Fast Money”, a daily program featuring a panel of “expert” Wall Street “traders” talking about the day’s news and their on-the-spot clever trade ideas. Even the name stinks. Either it invites viewers to indulge in their baser desires to make a quick buck without working too hard or it seeks to sensationalize and theatricalize the archetypal Wall Street culture of fast-thinking and fast-talking money makers.
Stock Picking Entertainment for the Common Man
The program features polished, high-production-value graphics and rapid-fire pithy repartee between five or six regular and one or two guest panelists who all speak with consummate confidence and swagger using a deluge of slick financial yak. Not unlike professional wrestlers, they each have a ridiculous nick-name like “The Liquidator” or “The Pit Boss”- whether to be funny or cool or tough, it’s not clear. The bobblehead experts blather on about how to “play” (that is, trade in light of) this or that company’s earnings or other “catalyst”, what direction gold or oil are headed in and at what price one should buy or sell a hot-topic stock. There isn’t much analysis involved. There is little thoughtful discussion of investment pro’s and con’s or risk. No mention of any financial number from anything other than an income statement. And you won’t hear Benjamin Graham quoted on this program. This gig is mere investor-tainment. Like WWE professional wrestling billed as “sports entertainment”, but at least those BS artists admit it’s “entertainment” right up front. Or is it financial porn? All form and no substance. A glitzy show designed to increase your heart rate with the quick-witted banter and sham arguments interspersed with lottery-ticket stock advice. Continue reading →
Can he repeat? Big Hands I know you’re the one.
Guy Hands, founder of UK private equity outfit Terra Firma, is about to do it again. The odds must be slim to none, but Messr. Hands just might catch lightning in a bottle. Another Terra Firma investment is inching towards an inglorious end and if the big man accomplishes this feat, he’ll be the investing world’s version of Bad Luck Brian. Already in the running for The City’s most shambolic investment firm, this would place them squarely in first place.
Every private equity shop has laid an egg here or there. Most of the time they manage to sweep it under the rug without so much fanfare and attention as whooped up when they’ve closed their latest fund. But this “Guy” appears to have a knack for both losing money and creating a PR disaster at the same time.
To refresh BFN readers, Guy Hands’ Terra Firma had the dubious honor of presiding over perhaps the worst private equity investment in history: the acquisition of UK music publishing concern EMI. Terra Firma paid £4.2 billion ($8.3 billion at the time) in August 2007 to acquire EMI. Subsequently a number of artists left the label, a financial crisis hit, and EMI had too much debt to get through it all. By 2011, the owners had run out of options and were forced to relinquish control to the primary lender, Citigroup, wiping out all of the equity (and most of the debt). Terra Firma was reported to have lost a whopping £1.75 ($2.5) billion in the transaction (roughly one-third of investor capital) as well as more than 60% of Hands’ personal wealth (who chipped in along the way to try to keep it afloat). Continue reading →
Like Marv from the movie “Wall Street”…
…Leon can really sling the Wall Street bullspit.
Let’s all learn from a real pro. Leon Cooperman, septuagenerian Chairman of Omega Advisors, could have retired a long time ago. But there he was last Friday, participating in Altisource Portfolio Solutions’ (ticker ASPS) conference call with investors. Often, big shots at hedge funds let their analyst-minions mix it up with the little people on such telephonic cluster shows. Not Leon, which might explain why he hasn’t stepped away and joined the board of the New York Public Library or whatever it is retired billionaires do these days. Stock picking and everything that goes with it are probably this guy’s raisons d’être. If he tried to retire, my bet is he’d wind up the Bret Favre of the hedge fund world. Then again, hanging it up would give him more time to shoot his mouth off like he did in 2011 when he likened Obama to Hitler (Neville Chamberlain or Jimmy Carter seems more apt).
Cooperman’s contribution to the Altisource call reveals a speaker of finance lingo at the top of his linguistic game. This is the stuff of Jordan 1988-89, Mantle 1956, Laver 1969. So Bud Fox News asked Hugh Sed, Professor of Linguistics and head of the William Clinton Oratorical Center at the Camden State Normal & Industrial School, to analyze Cooperman’s rhetoric. Below we’ve set forth the relevant quotes from the Altisource transcript and annotated with professor Sed’s comments in brackets (full transcript here): Continue reading →
Complete ignorance of a topic never stopped Mickey…
…nor does it stop Cramer from bloviating with confidence.
Has anyone noticed that Jim Cramer bears a striking resemblance to the bald, gap-toothed, grinning Mickey Dugan of Hogan’s Alley comic strip fame? Okay, I’m not expecting anyone to jump out of his or her seat in a squeal of self-satisfied exuberance at noticing the similarities between Jim Cramer and a comic strip character that achieved fame slightly before the dawn of the twentieth century. But Mickey D. (better known as “The Yellow Kid of yellow journalism”) and Jim C. do have a bit of the same swagger in their approach to the issues of the day. Continue reading →
At Fannie and Freddie, it’s 2006, Jay Cutler doesn’t stink yet, and you can buy a house for no money down!
The Fannie/Freddie 2006 New Year’s Eve celebration kicked off at 7 PM last night at an enormous French country manor home (complete with nanny suite, library, and solarium) in the tony Longwood section of Bethesda, Maryland, which was purchased just last week for $2.3 million by a 26-year-old administrative assistant at Freddie who makes $38,000 a year, is single, has a FICO score of 530 and no other source of income.
Ever since the beginning of December, when Fannie Mae (ticker FNMA) and Freddie Mac (ticker FMCC) offered head-scratching details about their new programs to back mortgages with down payments as low as 3%, it’s been clear that the two government-sponsored mortgage giants had somehow time-traveled to the end of 2005, a time considered by many the peak of the housing bubble. Said Palmer Aldritch, a professor of physics at the Philip K. Dick Space-Time Continuum Institute at Pontiac University, whom many academics regard as the nation’s leading authority on time travel: Continue reading →
Dre’s nickname for Carlyle’s Rubenstein is straight from his The Chronic LP…
…”Lil’ Ghetto Boy.”
The Beastie Boys were the exception that probably proved the rule: White guys shouldn’t rap, especially not old, rich ones whose nerdiness is beyond parody. Apparently inspired by the private equity firm’s profitable investment in Beats Electronics (co-founded by rapper/producer Dr. Dre), Carlyle Group’s co-chief executive David Rubenstein wrote and performed a rap song in a holiday video for the firm’s investors. Rubenstein introduces the video with: “You know, Dr Dre. is an incredible businessman and artist, and he even inspired me to write my own rap.”
Reached for comment about the Carlyle video, Magdalena Babblejack, Professor of Rhetoric & Communications at Northern Southwestern Indiana Normal School and Business Institute, who’s written extensively about missteps in corporate messaging, was unconvinced:
Considering how ridiculous the guy looks in this video, is it possible that he’s so feared at this firm that there wasn’t a single person with the courage to say, “Hey, Dave, not a good idea, you shouldn’t do this”? That video should have been marked Internal Use Only or Do Not Distribute. Maybe even Never-To-See-Light-Of-Day. The way he pronounces ‘private equity’ is priceless. The lock-ups on the investor money must be years out.
My recommendation? Next year, just put the stupid Santa hat on and sing a normal holiday song.
Continue reading →