- Obama Holds Fire on Syria, Waits on Russia Plan (WSJ)
- China Shadow Banking Returns as Growth Rebound Adds Risk (Reuters)
- Not one but two: Greece May Need Two More Aid Packages Says ECB’s Coene (WSJ)
- BoJ insider warns of need for wage rises (FT) ... as we have been warning since November, and as has not been happening
- California city backs plan to seize negative equity mortgages (Reuters)
- Home Depot Is Accused of Shaking Down Suspected Shoplifters (BBG)
- Most-Connected Man at Deutsche Bank Favors Lightest Touch (BBG)
- Norway Pledges to Limit Oil Spending (BBG)
- China Shadow Banking Returns as Growth Rebound Adds Risk (BBG)
- Gundlach Says Fed Is Mistaken in How It's Ending Easing (BBG)
Mitt Romney's net worth of $250 million is well-known by virtually everyone in America: after all, it was the primary campaign offensive used by the Obama team against his presidential challenger in an election run largely down wealth, and social class lines, and whom "Democrats targeted in ads and speeches as being out of touch with most Americans." What many may not know is that staunch democrat Al Gore's own personal wealth, has soared from virtually nothing in 1999 to a staggering $200 million according to an analysis conducted by Bloomberg.
Perhaps one of the most interesting aspects of the just announced Hostess liquidation, one that will be largely debated and discussed in the media, or maybe not at all, is the curious cast of characters and the peculiar history of this particular bankruptcy. Some may not be aware that the company's Chapter 11 (or colloquially known as 22) bankruptcy filing this January, which today became a Chapter 7 liquidation, was the second one in the company's recent history, with Hostess, previously Interstate Bakeries, emerging from its previous protracted multi-year bankruptcy in 2009. What is curious is that its emergence had all the drama of a anti-Mitt Romney PAC funded thriller, with a PE firm, in this case Ripplewood holdings, injecting $130 million in order to obtain equity control of Hostess as it was emerging last time. There were also more hedge funds, investment banks, strategic buyers, politicians involved in this particular story than one can shake a deep fried numismatic value Twinkie at. More importantly, however, as America has been habituated following the last season of the reality TV show known as the presidential election, if Private Equity then "bad." Only this time there is a twist: because it wasn't really PE that was the pure evil in the Obama long-term campaign, it was associating PE with Republicans, and thus: with jobs outsourcing. And here comes the Hostess twist: because Tim Collins of Ripplewood, was a prominent Democrat, a position which allowed him to get involved in the first bankruptcy process in the first place, due to his proximity with the Teamsters' long-term heartthrob Dick Gephardt (whose consulting group just happens to also be an equity owner of Hostess). In other words, the traditional republican-cum-PE scapegoating strategy here will be a tough one to pull off since the narrative collapses when considering that it was a Democrat who rescued the firm, only to see it implode in a trainwreck that has resulted in the liquidation of a legendary brand, and 18,500 layoffs.
In the first of two major bankruptcy stories du jour (the next one coming up shortly), we learn that AFA Foods, best known for being the maker of "pink slime", and a portfolio company of labor unions and Clinton afficionado Ron Burkle and his PE firm Yucaipa, has just filed for bankruptcy. The reason? The sudden public realization what pink slime is, and just how prevalent it is - perhaps it is best to think of it as the Bernie Madoff of the food industry - it was always there, yet it took a wholesale shift in public awareness and consciousness for the firm to realize it would have been prudent to come up with a slightly different name for its ground-beef product. As for whether or not the company is going to the pink sheets, well no. But one thing is certain: the management team is about to get a pink slip.
- Former Bernanke colleage and co-author Vince Reinhart: "Geithner and
Bernanke Are Wrong about Fed Power. Letting the Federal Reserve keep a
hand in bank supervision and regulation is a mistake." (The American) Please read : Monetary Policy Alternatives at the Zero Bound: An Empirical Assessment Author(s): Ben
S. Bernanke, Vincent R. Reinhart, Brian P. Sack Source: Brookings
Papers on Economic Activity, Vol. 2004, No. 2 (2004), pp. 1-78,
in which the authors (among whom is Brian Sack, head of the Fed's
trading desk) recall the golden days of Roosevelt's dollar devaluation,
and hint at what's to come for the US currency
- The Greek ex-Goldman guy who just blew up the 12 Year fly by is now preparing to issue $16 billion in dollar denominated bonds by early May. Ah yes, nobody can see behind the ruse of issuing bonds in the world's worst currency. Brilliant. Here's the funny part - Tim Geithner plans to issue $16 trillion denominated in Greek Drachma (Bloomberg)
- Emerging market currencies show short-term cracks (Reuters)
- Gartmore may face withdrawals after investigation (Bloomberg, Telegraph)
- Steve Forbes: "President Obama and Speaker Nancy Pelosi rammed ObamaCare through the House by unprecedented parliamentary trickery, bribery and deceit." (Forbes)
- Obama to permit oil exploration off Virigina coast (Reuters)
- Bill Clinton's $20 million break up with Ron Burkle (Daily Beast)
- iPad sales anyone's guess as analysts skip estimates (Bloomberg)
The Dubai collapse is about to claim its first domestic icon in the face of Barney's luxury store. The New York retail icon is set to file for bankruptcy after the Christmas season, or such at least are expectation of the company's key bondholders - Perry Capital and Ron Burkle's Yucaipa according to the NY Post. What the union-leveraged Burkle sees in the retailer is a big unknown (absent some firm principals' fascination with the firm's metrosexual merchandise), however, the firm, together with Richard Perry, is said to have accumulated virtually all the bonds in the name, at about 60 cents on the dollar, likely in advance expectations of a debt-to-equity conversion.
Even as Barnes and Noble posts a scary -7.7% comp store number for the "holiday" period, two major holders play hot potato with a big chunk of the retailer's equity.