Tuesday, March 31, 2009
Random Update
I write this as I sit disappointed with the performances of American Idol this week. I'm not sure I found a single song worthy of being liked... Speaking of TV, "Eight Eastern, Seven Central." How I've heard that phrase all my life, but yikes! words to live by now. Seven Central?!? Who can start watching network TV at 7:00?? Anyone who knows me, knows I love my TV, but seven o'clock is ridiculous. All I can say is: thank the Lord, I shipped a DVR out here....I experienced my first commuting weekend. I left the office a half an hour before the stock market close. I got to the airport with some time to spare for a 3:30 flight. I missed all the "insider" tips from c0-workers about parking and security because I don't know the airport complex yet. The plane was in the air 10 minutes after leaving the gate, and despite problems on the Whitestone Bridge I was still home by eight. The reverse was just as easy. I got the new Clear card that zips you through Security in New York, and was at my desk before 9:00... The highlight of the weekend was the Girl Scouts "Special Person" semi-formal. Held at the Larchmont Shore Club (the same location as Alison and my wedding reception), a hundred [guess] girl scouts dressed up and brought their dads [mostly] to a sweet dinner/dance. Although Katie spent most of her dancing minutes with friends, we had a couple nice dancing moments. Plus I still got to see the end of Villanova/Pitt in the bar area :) .... Speaking of college basketball, my pool is a disaster. In hedge fund terminology, I went long the ACC, short the Big East. The returns were similar to those evil hedge funds' returns in 2008... Work is good. Still finding my role/niche, but it's all good. Nice people - you betcha!
Monday, March 23, 2009
TARP me TALF me, anyway you want me
The stock market was up almost 500 points today on a new plan to save the financial system. Let's see, according to US Treasury, they will use funds from the Term Asset-backed Securities Loan Facility (TALF) to purchase troubled assets from the U.S. banks to give them relief on their declining capital ratios and subsequent margin calls. It doesn't have a catchy name yet. Currently, they have labeled it Legacy Securities Program.
Too bad. It should have a catchy name. So, let's think! Commingled Repurchased Asset Program? CRAP? Nah... Hmmm... So, they now have a program that is buying troubled assets, and it provides some relief. PTAR... No... Let's see, we're putting $500-$1,000bn of taxpayer money into purchasing troubled assets in order to take them off the books of the banks in hopes of making a profit out of the whole mess. How about, Troubled Asset Relief Program. Perfect! TARP!
Whoops, sorry, we have a TARP program. That acronym was already used for a program that was inacted in October 2008 specifically designed to buy troubled assets from the U.S. banks to give them relief on their declining capital ratios and subsequent margin calls, but instead was bastardized to be used to throw money around in hopes of stabilizing the economy, and stiff-arming financial institutions to lend to already overstreteched consumers so they could bid-up already inflated assets they couldn't afford while simultaneously criticizing these same financial institutions for not being financially smart and healthy. [long exhale]
This program is what TARP was supposed to be! This was the original plan! WTF took five months to figure it out! Look back at my postings in October 2008, and you will see the same ideas: get the bad assets off the books of the banks. Put them in hands of investors with long time horizons (like the U.S. Treasury) and no capital ratios to maintain. Banks will be free to make GOOD loans again, and at the end of the day, the investor in troubled assets probably makes some money.
To solve the problem of pricing and managing the assets, they seek help from private sector - yes, those same hedge fund evil-doers who have become the butt of Congressional babbling for the last six months. Although there are profits to be made, especially when the FDIC is providing 6:1 financing, I say "good luck" to the bastards who participate. I'll blog good things on your behalf when you too are called in front of Congress to explain how you made "millions" off the taxpayers generousity and dragged through the mud on CSPAN. And that's if you make a profit. God forbid you lose "our" money...
Too bad. It should have a catchy name. So, let's think! Commingled Repurchased Asset Program? CRAP? Nah... Hmmm... So, they now have a program that is buying troubled assets, and it provides some relief. PTAR... No... Let's see, we're putting $500-$1,000bn of taxpayer money into purchasing troubled assets in order to take them off the books of the banks in hopes of making a profit out of the whole mess. How about, Troubled Asset Relief Program. Perfect! TARP!
Whoops, sorry, we have a TARP program. That acronym was already used for a program that was inacted in October 2008 specifically designed to buy troubled assets from the U.S. banks to give them relief on their declining capital ratios and subsequent margin calls, but instead was bastardized to be used to throw money around in hopes of stabilizing the economy, and stiff-arming financial institutions to lend to already overstreteched consumers so they could bid-up already inflated assets they couldn't afford while simultaneously criticizing these same financial institutions for not being financially smart and healthy. [long exhale]
This program is what TARP was supposed to be! This was the original plan! WTF took five months to figure it out! Look back at my postings in October 2008, and you will see the same ideas: get the bad assets off the books of the banks. Put them in hands of investors with long time horizons (like the U.S. Treasury) and no capital ratios to maintain. Banks will be free to make GOOD loans again, and at the end of the day, the investor in troubled assets probably makes some money.
To solve the problem of pricing and managing the assets, they seek help from private sector - yes, those same hedge fund evil-doers who have become the butt of Congressional babbling for the last six months. Although there are profits to be made, especially when the FDIC is providing 6:1 financing, I say "good luck" to the bastards who participate. I'll blog good things on your behalf when you too are called in front of Congress to explain how you made "millions" off the taxpayers generousity and dragged through the mud on CSPAN. And that's if you make a profit. God forbid you lose "our" money...
Paging Senator Smoot!
May the mass lynchings begin. Nobody is happy about the AIG bailout, but the hysteria surrounding it is insane. People are bitter, I get that; however, the reason we have representative government is to remove ourselves from the rule of the mob. Looking back at history, consensus outrage is often wrong - or at the very least not very forward looking. Roughly four score years ago, mass outrage at international trade led to the Smoot Hawley Tarriff Act to protect American farmers and the American people. The bill passed the Senate 44-42 and 245 to 177 in the House - mostly along party lines (Republicans pushing it through) and signed by Republican President Hoover. Lots of people supported then - it seemed like a good idea. Throw tarriffs on over 900 products to protect the average American. Wall Street hated it. The Head of JP Morgan, Thomas Lamont, begged President Hoover not to sign it. It wasn't long before the bill sent the U.S. further into the Depression. The name Smoot-Hawley (other than being a great Ferris Bueller movie quote) is solely tossed around now like no one would ever make a dumb mistake like that again. But circumstances of the time didn't have the benefit of 20/20 hindsight. Lots of people thought it was a good idea in June 1930.
The taxation of bonuses at 90%, or the breaking of contracts to claw back a meager $165 million (yes, I say "meager" when it's put into context of a $130 billion AIG bailout), is just plain D-U-M-B! It could turn to be the Smoot-Hawley of the 21st century. If it HAS to pass, I can only hope its called the Dodd-Frank Act. At least history will then remember these two for the buffoons they really are.
The taxation of bonuses at 90%, or the breaking of contracts to claw back a meager $165 million (yes, I say "meager" when it's put into context of a $130 billion AIG bailout), is just plain D-U-M-B! It could turn to be the Smoot-Hawley of the 21st century. If it HAS to pass, I can only hope its called the Dodd-Frank Act. At least history will then remember these two for the buffoons they really are.
Monday, March 16, 2009
Minneapolis Fever
The move has officially occurred. I write this entry from a 2BR apartment in downtown Minneapolis. It's 10:00 at night, and 51 degrees. Yes, it is warmer than in New York City. Alison and I came out here last Thursday. We spent the four day weekend previewing different parts of the city and the suburbs. Although we met with some Real Estate agents, it was more of a fact finding tour than anything else.
The apartment is nice - spacious for one, but will be crowded when the whole family comes to visit. There's a nice view, and plenty of windows from which to view the view. There's a gym - and yes, I have used it. Check in later to see how regular it becomes. Known as Centre Village, the co
mplex is connected to the rest of Minneapolis through the skyway system - a strange, hamster-like habitat system that connects numerous buildings with hallways one level above the ground (see the image to the left). Basically, it lets one walk through town without going outside (due to the extremely cold winters). However, it has the feel of walking around some big Las Vegas convention center without the screaming slot machines. Very odd.
The girls are handling things well. We have established a good Skype routine for video conferences. Between one camera in the kitchen and one in the family room, we have things covered. Plus the uniqueness of talking to Dad on the computer hasn't worn off yet. If you too have Skype - let me know. I'll Skype you too. Boy, that sounds dirty doesn't it?!?
I've only completed one day of work, but so far - so good. The first day involved setting up systems and learning names. One is done, and one needs work. I won't say which.
All for now...
The apartment is nice - spacious for one, but will be crowded when the whole family comes to visit. There's a nice view, and plenty of windows from which to view the view. There's a gym - and yes, I have used it. Check in later to see how regular it becomes. Known as Centre Village, the co
mplex is connected to the rest of Minneapolis through the skyway system - a strange, hamster-like habitat system that connects numerous buildings with hallways one level above the ground (see the image to the left). Basically, it lets one walk through town without going outside (due to the extremely cold winters). However, it has the feel of walking around some big Las Vegas convention center without the screaming slot machines. Very odd.The girls are handling things well. We have established a good Skype routine for video conferences. Between one camera in the kitchen and one in the family room, we have things covered. Plus the uniqueness of talking to Dad on the computer hasn't worn off yet. If you too have Skype - let me know. I'll Skype you too. Boy, that sounds dirty doesn't it?!?
I've only completed one day of work, but so far - so good. The first day involved setting up systems and learning names. One is done, and one needs work. I won't say which.
All for now...
Tuesday, March 3, 2009
You're Gonna Make It After All
I have accepted a new job. It has a catch that wasn’t expected at the outset of this search – it’s in Minneapolis. I’ll be doing very similar things to my old jobs, but at a new firm. Waterstone Capital Management, which is located just West of the city in Plymouth, MN, was one of the best performing convertible bond funds in 2008. They were up more than 12%, when many funds were down 20-50%. Founded about five years ago, Waterstone has roughly 18 employees and manages about $750 million of investor’s capital.
At first, I will be commuting Mon-Fri, and returning home for the weekends. Come August, we’ll see what’s next. Much depends on the NY State housing market. We could rent our place, sell it, or potentially continue the commuting thing for another school year.
I'm very excited about the opportunity. Waterstone is a very good match with my skill set, and I like the people very much. The commute/move is a bit nerve racking. We'll see how it goes.
Overall, the family is on-board. Alison will certainly have the most difficulty since her family remains here in New York. Katie, who was not too pleased at first, is veiwing it more positively. The unshakable Emily would probably be ok if we moved tomorrow.
I'm starting March 16. The company has set me up in an apartment in downtown Minneapolis. I'm already looking at the Twins schedule to see when the Red Sox come to town.
At first, I will be commuting Mon-Fri, and returning home for the weekends. Come August, we’ll see what’s next. Much depends on the NY State housing market. We could rent our place, sell it, or potentially continue the commuting thing for another school year.
I'm very excited about the opportunity. Waterstone is a very good match with my skill set, and I like the people very much. The commute/move is a bit nerve racking. We'll see how it goes.
Overall, the family is on-board. Alison will certainly have the most difficulty since her family remains here in New York. Katie, who was not too pleased at first, is veiwing it more positively. The unshakable Emily would probably be ok if we moved tomorrow.
I'm starting March 16. The company has set me up in an apartment in downtown Minneapolis. I'm already looking at the Twins schedule to see when the Red Sox come to town.
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