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Dan Quayle Can Not Save Cerberus
Despite his erudication and spellingtude, the chairman of Cerberus Int'l (former vice presidentoe Dan Quayle) was unable to save the three headed titanic. Farewell Steve Feinberg, we won't miss you and your usurious second liens.
From the WSJ:
Cerberus Capital Management's investors overwhelmingly want out of the
firm's core hedge funds, asking for the return of more than $5.5
billion, or almost 71% of the fund assets, according to people familiar
with the matter.
Mr. Feinberg has personally called Cerberus clients over the past
two weeks to discuss his firm's plans to retool the Cerberus Partners
hedge funds, which make up about one-third of the firm's total assets.
The hedge funds hold roughly $7.7 billion in assets in two side-by-side
vehicles, one domestic and one offshore.
Cerberus in recent days has tried to convince investors -- called
limited partners in the private fund business -- to transfer assets to
the new follow-on fund, called Cerberus Partners II. Since December,
Cerberus has declined to pay out cash, saying that weak market
conditions would mean low prices if it sold holdings.
"Unfortunately a number of our LPs have indicated that they cannot
invest in Cerberus Partners II LP without quarterly liquidity," Mr.
Feinberg wrote in the most recent letter. "In our view, given the
current general illiquidity in the distressed markets, it would be
practically impossible for a distressed investment fund to provide
quarterly liquidity for 100% of its capital."
Alas Cerberus was not quite as big or stupid as CIT to end up on the Fed's dinner plate. One doubts too many tears will be shed for the company that always was the last ditch rescue financing provider due to its tendencies to extract three pounds of flesh with any $20 million L+2000 first lien.
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Cerberus Partners II?
They need a better name.
They've got one picked out already ...
It'll be called Cerberus Partners III... just as soon as that Japanese banking fiasco sh%t hits the fan.
How about Sure-B-Rec?
How about Three Dog Good Night?
If illiquidity is their game, 71% pressing the down button leaves D/Ks upstairs
nah..too late now
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
hard to believe that financial genius did not come from a Vice President who took on a fictional tv character over her lifesytle choices.....
Nice! I don't think people remember what a true imbecile he was.
Bush I - Quayle - did nothing
Bush II - Cheney - did too much
but lizzy, murphy was not displaying traditional christian family values.
Cheers
What happens to Chrysler?
Doesn't Cerebrus fund them?
Here is what happen. Obama stole Chrysler from Cerebrus and gave it to the unions. Wholesale looting by Obama to benefit Obama. Never invest in a company that have unions as a rule of thumb.
It was easy to miss, not a big news story. But Chrysler went into bankruptcy. Equity handed over to the Italians and the UAW, and various other Obama campaign contributors. Let me know if this is ringing a bell....
"...spellingtude, the chairman of Cerberus Int'l (former vice presidentoe Dan Quayle..."
I think both beat out or at least match "bidetesque". You're killing me Mr. Durden.
Sadly, only the deciderdude, aka whitehouse madman of decider, formerly known as WMD, can save it.
Once you invest your dollars, they become my dollars.
No dollars for you! Only more better fund!
When do the bank closures du jour come out?
fdic dot gov
delete
Tyler,
Why don't you do an analysis of Feinberg and his Japanese bank aozora, Japanese regulators are... Sort of a cautionary tale of how PE & banks can be a dangerous mix for taxpayers.
http://www.reuters.com/article/bankingFinancial/idUST3274720080331
http://www.reuters.com/article/companyNews/idUST34913720080331
Hey dot dot dot...
Aozora Bank
Donations to Bernie Madoff : $135 Million
Losses on Lehman Bonds : $450 Million
Losses in Sub-Prime : $500 Million
Finding what Dan Quayle has been up to?
PRICELESS!!!
Courtesy of Cerberus (banks owner), Mr. Not-so-Feinberg
Say what's the chance that Cerberus unloaded their GMAC crap on the bank books after it turned to sh%t?
Just for ZHers reference purposes:
http://www.forbes.com/2009/02/10/aozora-cerberus-japan-markets-equity-0210_madoff_04.html
Damn again... Sorry Guys...
$557 million exposure to Lehman that netted out to $25 million after CDS bailouts...
Sounds like Quayle has areal hot potatoe on his hands.
Pete
Will investors view this as being analogous to the Bear Stearns hedge fund failures of July '07? That was ~$3B. Of course, that was a collapse. This might be merely viewed as abandonment. Of course, if the unwinding doesn't go so well . . .
For all of you dancing on the grave of the three-headed dog, chillax! This is just the hedge fund representing 1/3 of firm assets that is winding down. The Private Equity fund, for which Cerberus is famous and where Steve made his name and money, is not affected by this. Of course with bets like Chrysler and GMAC, that's not going so hot either, but Cerberus the PE firm is not shutting down.
Right.
When a 1/3 of my business starts to stink from a rotten balance sheet, the other 2/3 come out smelling roses.
What planet do you live on?
71% of investors extracting liquidity is "running for the exits".
Don't care what the other 2/3 of the business looks like.
Where is the money going instead?
A stock market on fumes that's been sold off by insiders at elevated levels?
Cerberus is only one piece of the liquidity puzzle.
Watch for major liquidity events soon.
By soon... do you mean... before Op-Ex?
Am I to understand correctly that they can't pay up?
What was the final deal with GMAC? Didn't Cerberus get to hand their shares off to their LPs?
Is so, with the gov't pumping $$ into GMAC, won't GMAC eventually return to being the money machine it was pre-RE meltdown?
What happened to their stake in GMAC? Did they get to hand it off to their limiteds?
If so, you'd imagine that those shares would eventually have some value as Uncle Sam has been pouring money into this (former) money machine.
Anyone know?
The story is too long and sordid to respond, but if you see how it starts with Reaganite Treas. Sec. Snow who left to become Cerberus Chairman of the Board, you can see why deregulation pre-Paulson was cleaned up post-Paulson, with that crowd getting cash payments, and the taxpayer stuck with the bill.
Looking at the crap they own I see BAWAG. A nice Austrian bank. C bought it in 06. They lost$750mm in 07 and $1.2 b in 08. This no doubt is from loans to eastern european customers.
This bank has a checkered history. The former head is now in jail. He lost a billion in the currency market. He got bailed out by Phil Bennet of Refco fame. Bennet tried to hide the loss on Refco's books. But he got caught.He's in jail too.
This "asset" will probably be sold for zilch. Want an Austrain Bank?
Forget the details surrounding this article.
Bottom line is 71% of investors are pulling over 5 billion $ from a hedge fund.
That should be a clear signal.
two questions.
1. is it a ponzi scheme?
2. do they have the money to pay back the
investors?
No. No.
Dan Quayle Quotes
"We are ready for an unforeseen event that may or may not occur.!
-Former U.S. Vice-President Dan Quayle "It is wonderful to be here in the great state of Chicago" -Former U.S. Vice-President Dan Quayle
"I was recently on a tour of Latin America, and the only regret I have was that I didn''t study Latin harder in school so I could converse with those people"
-Former U.S. Vice-President Dan Quayle
"The loss of life will be irreplaceable."
-Former U.S. Vice-President Dan Quayle on the San Francisco earthquake
"When I have been asked during these last weeks who caused the riots and the killing in L.A., my answer has been direct and simple: Who is to blame for the riots? The rioters are to blame. Who is to blame for the killings? The killers are to blame."
-Former U.S. Vice-President Dan Quayle on the complex social issues behind the Los Angeles Riots
"Republicans understand the importance of bondage between a mother and child. !
-Former U.S. Vice-President Dan Quayle on Republican family values
"It isn''t pollution that''s harming the environment. It''s the impurities in our air and water that are doing it.!
-Former U.S. Vice-President Dan Quayle
"What a waste it is to lose one''s mind. Or not to have a mind is being very wasteful. How true that is."
-Former U.S. Vice-President Dan Quayle at a fundraising event for the United Negro College Fund. He was attempting to quote the line "a mind is a terrible thing to waste"
"I love California. I practically grew up in Phoenix." -Former U.S. Vice-President Dan Quayle
"POTATOE!
-Former U.S. Vice-President Dan Quayle, attempting to spell potato.
"I stand by all the misstatements that I''ve made.!
-Former U.S. Vice-President Dan Quayle
"A mind is a terrible thing to taste." -- Al Jourgensen.
Cerberus Partners, LP is not Ableco Finance or Styx Partners or Madeiline LLC.
Great post Gloomy...thanks for the enlightenment
Gloomy....great post. Thanks for the enlightenment. Now what do we do?
Suffice it to say, this story literally made my day.
I was going to say:
Shouldn't the title be "Dan Quayle Can Not Spell Cerberus"?
Then I read the article a little further.
Spellingtude?
LOL
Whenever I hear the name Dan Quayle I am reminded of the comedian Robyn Williams question during the election campaign when Quayle ran for VP.
"Does Mickey Mouse wear a Dan Quayle watch?"
Whenever I hear the name Dan Quayle I am reminded of the comedian Robyn Williams question during the election campaign when Quayle ran for VP.
"Does Mickey Mouse wear a Dan Quayle watch?"
Re: Quayles "Chicago as a state" comment:
Perhaps Chicago is one of the 57 states Obama claimed to have campaigned through in '08.
www.youtube.com/watch?v=EpGH02DtIws
Why do we get dimwits like Quayle and Obama in higher office?
That sounds so good. Untill you realize who the investors are. Hint: It isn't you or me. Well, maybe you but certainly not me.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
This is a walk on memory lane (2006). It's sad knowing that Tanta is no longer with us.
Link: http://www.calculatedriskblog.com/2009/08/misc-cerberus-flippers-and-mar...
I still haven’t gotten over the fact that there’s a “capital management” group out there having named itself “Cerberus”. Those of you who were not asleep in Miss Buttkicker’s Intro to Western Civ will recognize Cerberus; the rest of you may have picked up the mythological fix from its reprise as “Fluffy” in the first Harry Potter novel. Wherever you get your culture, Cerberus is the three-headed dog who guards the gates of Hell. It takes three heads to do that, of course, because it’s never clear, in theology or finance, whether the idea is to keep the righteous from falling into the pit or the demons from escaping out of it (the third head is busy meeting with the regulators). Cerberus is relevant not just because it supplies me with today’s metaphor, but because it was the Biggest Dog of three (including Citigroup and Aozora, a Japanese bank) who in April bought a 51% stake in GMAC’s mega-mortgage operation, GM having, of course, once been renowned as one of the Big Three Automakers until it became one of the Big Three Financing Outfits With A Sideline In Cars. I tried to find a link for you to Aozora Bank’s announcement of the purchase, but the only press release I could find for that day involved the loss of customer data. They must have been so busy letting GMAC into the underworld that the dog head keeping the deposit tickets from getting out got distracted.
...
I bring all this up not just to stick it to Citicorp, but because we’ve all been asking the question lately of who will be the bagholder when the exotic/subprime mortgage problem finds a home. We have noted in our discussions that credit risk can move in two directions: the wholesaler takes it off the originator and the bond investor takes it off the wholesaler/issuer with the helpful assistance of protection sellers in the hedge fund credit-swap market, but when the “DETOUR” signs pop up, the bond investor can work really hard on forcing it back to the wholesaler/issuer, who can try to put it back to the originator, who gets to try to recover something in a foreclosure sale. If the originator has any financial strength left to buy loans back with, that is; see the sad stories of Ownit, Option One, Fremont, New Century, etc.
[CR: remember T wrote this in 2006]
...
If you thought the only thing that would stop the circle jerk of risk was putting some credit and pricing discipline into the game, I guess you’re just a weenie like me. Anyone who can make sense of this is free to set me straight. And if the answer has “sorting socks” in it, don’t bother. I’ve tried that.
On Day 1 the Generals have all the experience and the Limiteds have all the money.
On Day 2 the Generals have all the money and the Limiteds are LEFT with the experience.
Feinberg's vivisection of corporate victim after victim has finally led him to patch of bad livers?? Not enough chianti to enjoy Chrysler's kidney with fava beans? Oh I forgot a three headed beast can eat three times faster... Honestly, hasnt everyone watched in disbelief as no one regulated Cerberus' string of evil, ruining companies, cities, communities and people largely to benefit one person. Of course, lending at 2000 over Libor can be the major clue in whether a lender is taking advantage of its clients. But Cerberus has stripped out assets of all its investments and endebted them. This kind of "finance" should have ended in 1987 or 1989, because its not so much a bubble mentality where truly everyone is guilty of playing stock market hot potato. But levereaged loans and high yield takeovers only serve the purpose of a greedy unconcerned quick-buck flipper. (oh please, they had spreadsheets! And Feinbergs PR people both threatened to silence the critics and flacked the desperate journalists dying to get the interview. How many times do I have to read he is a genius since he has already destroyed about 20 companies?) Can't we stop this and the next generation of its kind BEFORE it happens again. Well Feinberg has had children so its too late for one strategy, but at least we can pass a few laws that prevent the evil from preying upon the desperate in the future. There will be more Feinbergs so lets stop them now!