(Cushing, OK storage tanks)
Saturday, January 17, 2009
(Cushing, OK storage tanks)
In the meantime, wife of the totally nutso dictator Mugabe has been seen carting wheelbarrels of the new specimens to stores in Hong Kong, much to the chagrin of the thousands of Zimbabweans dying everyday from cholera. Way to go United Nations. Sphere: Related Content
Friday, January 16, 2009
What is known so far:
- Art Nadel, 75, money manager for Sarasota, FL, based Valhalla Management is under investigation for investment and asset theft.
Art disappeared on Wednesday afternoon; his disappearance was reported by his wife Peg who had last seen him at 8:45am on Wednesday. Two days later the police launch an investigation.
- Nadel left a note that was recovered after his disappearance. Contents of said note have not been released by authorities.
- Wife Peg Nadel and son Geoff Quisenberry said they would not comment on the assets under management, the number of clients, how much had been lost or whether it is even accurate to call it a hedge fund.
- Nadel is fleeing in a green Subaru.
- Detective Bill Splitter says "We're dealing with a substantial amount of money that has reportedly been taken from many investors".
- Among the high-profile Sarasota victims are the Sarasota YMCA foundation, and at this point they have been told their money is gone.
- Valhalla investors had been told their investments in the fund had earned over 8% as of November.
- In addition to Valhalla, other umbrella funds implicated are Viking and Scoop management.
- Neil V. Moody, 70, who is president of Viking Management, released a statement to investors on Thursday confirming funds had disappeared: "Unfortunately, just yesterday afternoon we became aware of an extremely serious situation suggesting that the funds may have virtually no remaining value".
- Moody is telling clients that Nadel did all the fund trading, and that Moody had no idea anything was wrong until this week.
- The duo operated under the name Scoop Management Inc. in a double storefront at 1618 Main Street in Sarasota.
- Moody, who lives part time in Evergreen, Colorado has told investors the funds value totalled $350 million.
- Among the recipients of gifts and pledges from the Nadels are Habitat for Humanity, Jewish Family and Children's Services and Girls Inc.
- Scoop had announced that it could not meet year-end demand for $50 million in redemptions.
- Moody has admitted to an investor that "Nadel was missing with all the money".
- In a 2003 report, Sarasota-based The Wall Street Digest lauded Nadel's and Moody's experience, especially Nadel's "black box" computer program (you reading AQR?).
- Valhalla's phone number is listed as (941) 366-0975.
- Valhalla was incorporated in 1999; the Nadels and others started a firm two-years earlier that used computer generated investment and trading programs, according to Valhalla marketing docs.
- Nadel is a grad of NYU, and in the 1960's was a realestate developer.
The photo below is of a store front of Scoop Management Inc. from Google Street View. No green Subaru can be spotted. As more news unwind in this developing story, we will keep you posted.
Photo of the Art Nadel's wife, Peg, and borg-collective fan son, Geoff:
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At this point on Friday we are too drunk to read thru this garbage. Sphere: Related Content
California CDS last traded around 400... We will bet $0.69 it won't stay there too long.
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Well, we shall see Sphere: Related Content
Poor guy, all joking aside, this is pretty horrible and again our thoughts go with him Sphere: Related Content
Moody's just downgraded Banc of America/Merrill Lynch senior rating to A1 from Aa3. Kinda like Lehman was rated A1 on the day of its bankruptcy. Sphere: Related Content
The massive tax funnel known as the Treasury has decided to burn $1.5 billion in yet another retarded venture. You can now run to your nearest Chrysler dealership and get that PT Cruiser you have been dreaming of for so long for a 0% financing. Sphere: Related Content
Ezra Merkin's "Jewishness" wasn't lost on the panel either. Speaking of Merkin, Ackman said "I think he is an honest person, an intelligent person, an interesting person, a smart investor."
Even though Woody Allen was absent to provide comic relief, Dr. Ruth Westheimer, summarized the situation eloquently "We are all concerned to go on a miserable and cold night to talk about it. That's what we Jews do. We don't sit home and stew". Sphere: Related Content
Thursday, January 15, 2009
I can still remember
How the Dow Jones used to make me smile.
And I learned my trade and had my chance
The music played I did my dance
And I made seven figures for a while.
I can't remember if I cried
when they pulled the plug on Countrywide...
It sucks that Iceland is out of ice....
Bye, Bye to my piece of the pie...
Now I travel coach whenever I fly...
Maybe this will be the day that I die.
With luminary frat brothers and sister such as Jimmy Cayne, Richard Fuld, Stan O'Neil, Martin Gruss, Michael Bloomberg, Jon Corzine, Mary Shapiro, Alan Schwartz, Larry Fink, Larry Fink, Wilbur Ross, James McDonald, this "secret" organization puts the Masons, Bilderbergs, Skull and Bones, Templars, Fight Club and all other secret societies to shame.
It is all coming together now.
Read all about it here. Sphere: Related Content
The building was purchased from Tishman Speyer in December 2006, for $1.8 billion (all of it financed with debt) the highest price ever paid for an individual building in Manhattan, by Jared Kushner. Jared is prominent in the gossip pages for not only owning the gossip pages (he is owner of the New York Observer, which he purchased for $10 million at age 25), but for being wise beyond his years (a grizzled veteran at 28), for having good taste (he is engaged to Ivanka Trump), and lastly for being the son of Charles Kushner. One could say Tishman made out like a bandit on the sale, if only it hadn't used to proceeds to go and buy Stuyvesant Town for $5.4 billion, which is now also on the verge of bankruptcy.
Says Kushner "We are well capitalized and conservative and feel confident that we will do well with this over time.” He adds, “There’s eight years left on the debt, and we have $100 million in reserve so any inference that this building is in trouble or distressed is ridiculous, even in this crappy real estate market." Kushner forgets to add that he personally has no equity invested in the deal, so if he is wrong, it is only illiterate CMBS investors who will suffer by having their sizable debt investment wiped out.
Interestingly, another tenant of the building, is none other than Ezra Merkin's 14th floor neighbor. Mr. Englander's Millennium management, which has so far been spared the hedge-fund decimation that is pervasive amongst his peers, may be forced to look for new digs if young master Kushner decides to hike the rent for any remaining tenants in the building. Sphere: Related Content
With Adolf Merckle's 25% stake currently in limbo an acquisition would make sense. However, with the CDS trading at an implied 50% chance of default within a year, and suitors will likely need to do a global recap as part of an acquisition which will need to eliminate at least half the outstanding debt for this to continue as a viable concern. Either way, the CDS should be an interesting play as it could move quite aggressively in either direction as this saga develops. Sphere: Related Content
- Energy: $32 billion to fund a "smart electricity grid", $20 billion for renewable energy tax cuts and tax credit for R&D; $6 billion to weatherize modest income homes.
- Science and Tech: $10 billion for science facilities, $6 billion for high speed Internet to rural areas, $1 billion for 2010 census.
- Infrastructure: $32 billion for transportation projects, $31 billion to build and repair federal buildings and other public infrastructure, $19 billion in water projects $10 billion in rail and mass transit projects.
- Aid to poor and unemployed: $43 billion for extended unemployment benefits, $20 billion for food stamp benefits, $4 billion for supplemental Social Security Income payment, $2.5 billion in temporary welfare payments, $1 billion in home heating subsidies, $1 billion for community action agencies.
- Education: $41 billion grants to local school districts, $79 billion in state fiscal relief to prevent cuts in state aid $21 billion for school modernization; $16 billion to boost Pell Grant; $2 billion for Head Start.
- Health care: $39 billion to subsidize health care insurance for unemployed, $90 billion to help states with MedicAid, $20 billion to modernize health info systems, $4 billion for preventative care, $1.5 billion for community health centers.
- Housing: $13 billion to repair and make more energy efficient public housing projects and help the homeless.
- Law enforcement: $4 billion in grants to state and local law enforcement.
We didn't care to add this up; we are sure it does not add up to the $550 total. After all it comes from the same people who wanted to repeal an excise tax for kids' arrows in the original TARP.Sphere: Related Content
Turbofan engines for the A-320 are apparently made by either CFM International with the CFM56 engine, or International Aero Engines with V2500. The CFM56, specifically the 5B variant, is assembled by GE in Evandale, OH and by Snecma in Villaroche, France. The V2500 engine is a two-shaft, high bypass engine, while International Aero Enginers is a consortium of four companies: Pratt & Whitney, Rolls-Royce, Japanese Aero Engine Corporation, and MTU Aero Engines. More than 1,300 V2500-powered aircraft are currently in operation and have accumulated over 40 million flight hours. In Addition to the A-320, the V2500 power the MD-90 airplane. Sphere: Related Content
Erin Burnett asking the right questions; market not giving rat's ass Sphere: Related Content
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DETROIT, Jan. 15 /PRNewswire/ -- General Motors today provided an update on company restructuring efforts included in the viability plan submitted to the federal government last month, and announced more conservative industry volume planning assumptions to ensure the viability plan is successful even in the most challenging of markets. Sphere: Related Content
Lawyers A Thru C, for full list click above
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"At least 10 prosecutors are involved in the investigation"..... uh oh, they really are regrouping forces on this one Sphere: Related Content
Sources said "said the company's board opted for court protection because it was unable to raise conventional bankruptcy loans, known as debtor-in-possession or DIP financing. Typically, banks are eager to make DIP loans because they charge high rates and rank as one of the best-secured loans, but during the deepening credit crunch few banks are willing to lend well-protected loans to distressed borrowers. Without a DIP loan, one source said, Nortel's board opted to file for protection while it still had a large cash reserve and before it was required to pay more than $100-million Thursday to certain bondholders."
M&A bankers who recently left their posts in droves to join restructuring advisories in hopes of catching the upswing of the next bubble, may be left in the cold as Chapter 7 (where monthly retainers are non-existent) becomes the new Chapter 11.
- Telecom company Charter not making coupon payments on the various notes we listed, to the tune over almost $75 million. 8% Notes of 2012 trading flat around 78
- Smurfit Stone Container tells lenders it is likely filing for bankruptcy. Notes down 9 points to the single digits. Bloomberg notes that SSCC CDS in bps equivalent is roughly 19,000 over Libor... That'a a lot. They also juxtapose it to TIN, IP, and WY, all of which are sub 1000 bps, which could be read inversely as saying those three CDS are damn cheap
- Perrenial Jefferies refi client ARG Enterprises which operates the fabulously named Black An(g)us restaurant chain pulling the plug
We will keep posting them as we seem em.Sphere: Related Content
Wednesday, January 14, 2009
According to his Brokercheck profile, Frank is still currently registered at Bernard L. Madoff Investment Securities LLC, CRD# 1527021, he is in fact "Jr", there have been no disclosures or suspensions filed against him (unlike his boss, whose crib sheet is quite prolific). Like a diligent schoolboy, Frank passed his Series 7 on June 21, 1986. Frank has been employed by Bernie since September 1975, over 33 years, meaning he joined when he was 18. On December 23, WSJ profiled DiPascali, who is represented by attorney Mark Mukasey, a high profile trial lawyer from Bracewell Giulianni. While DiPascali was quoted as saying that he "would like to see investors get back whatever they can", an SEC memo claimed that Frank has "responded evasively" to questioning after the regulators showed up at the 17th floor of the Lipstick building.
Frank is married to Joanne DiPascali of Howard Beach who is an employee of JP MorganChase National Association, the private banking arm of JPM. As noted here, Joanne works out of JPM's Iselin NJ office, which is where the firm's mortgage business is centered. In this March 29, 2006 memo, the Iselin office provided its 2 cents on just how smoothly the Nontraditional Mortgage Product market is operating. As seen in the following representative prospectus from a 2007 mortgage pool offering by that office, of the $473 million mortgage pool peddled probably by Mrs. DiPascali among others, only $181 million of mortgages had verification checks, $440 million are IOs and average outstanding balance is $476,000...So plot thickens - husband is chief financial officer to a ponzi as wife is potentially selling worthless mortgage pools... DiPascalis now live in Bridgewater, NJ, in what seems like a pretty decent house. In his spare time, Frank enjoys marlin fishing on his boat Dorothy-Jo, and he is actually quite good - he participated in the 2008 Mid-Atlantic $500,000 Marlin Fishing Tournament. Not only is fishing a hobby, but it seems to also be a family business (and who knows, maybe a money-laundering operation): since 2002 the couple has been running Dorothy-Jo Sportfishing, which according to manta.com has annual sales of over $230,000...
How about the other tenant of the 17th floor, Charles Wiener, Bernie's sister son. Charlie is registered broker, CRD# 1329906, with no publicly filed adverse disclosures. Charlie passed his Series 7 on 9/21/1985. He has been employed at Madoff securities since May, 1980 - 28 years. Charlie is married to Carolyn B. Wiener, a lawyer. Charles and Carolyn live in Centerport, NY. Carolyn is the Wiener (no pun) in Schaum and Wiener, of 600 Old Country Road in Garden City, NY. Co-founder Martin Schaum himself was in the brokerage business under the name Good-Rate Brokerage Ltd. As noted, Charlie's mother is Sondra Wiener, 74, who lives in the Ballenisles Country Club, a gated Palm Beach Enclave where annual membership costs $35,000-$115,000, and is a stone-throw away from Jupiter Island. Sondra and her husband, Marvin, are neighbors to such celebrities as Serena and Venus Williams. The NY Post recently noted that Bernie scammed even his own sister, and Charlie's mother, to the tune of an estimated $3 million. Sondra was one of the recipients of a Christmas goody bag that was sent under the nose of his overseers, which included $1 million in valuables including Cartier and Tiffany watches. These were promptly recollected by lawyers. On December 19, a week after Bernie's confession, Marvin and Sondra put their 3 bedroom, 2 garage, 3,409 sq. foot home on the market with an asking price of $849,000 (any buyers can call Sandy Pitchford at PalmBeachGardens.com, at (561) 427-7262 - this home will easily have phenomenal goodwill (or badwill) appreciation in coming years). The home was purchased by the couple in 2003, the year it was built, for $650,000. A neighbor is quoted that Sondra "was a victim in this. It didn't seem like she saw it coming. What kind of person scams their own sister?" Or their mother, we would ask. Which would be the case if you are Charlie, and if, indeed, you had insight into you uncle's Ponzi operation. If Charlie is found to be guilty of prior knowledge, one could say that his punishment should be even worse than Bernie's, as the latter at least tried to give his relatives and family members some last minute parting gifts. Robbing your own 70 year old mother of her life savings would be inexcusable... Of course this line of thought presumes that Sondra herself was completely innocent and did not know anything about Bernie's actions, which is also yet to be proven.
Maybe we spoke too early when we said that Shrenker's life story shames Berney . If a high-level investigation into the Madoff octopus reveals so much shadiness that even Mario Puzo would cackle contentedly, one can only imagine what will be revealed when the Feds and the SEC actually stop twiddling their thumbs and do their job for once.
We hope to continue with Part 2 of this investigation tomorrow as time permits Sphere: Related Content
We wish him well. Sphere: Related Content
Deleveraging may have a day or two to go. Sphere: Related Content
Maria Bartiromo: "Should people be shorting Citi at $4.53?"
Meredith Whitney: "I would diversify out of financials here."
There is a glimmer of hope: "I would be buyer of American Express.... at $15" Sphere: Related Content
From: Vikram Pandit
Dear Citi Colleagues,
I want to make sure you know that we’ve moved up our Q4 2008 earnings announcement to this coming Friday, January 16. Since we are ready to release 4th quarter earnings and talk about 2009 and the future, we saw no need to wait.
As I told you yesterday in my video message, economics and psychology are both important in the markets. The economic model of our business is sound and positions the company for success over the long term. The clarity we provide as we report earnings should address the psychology of the market.
Until then, here are the things you should know:
* While we are embarked on a long-term transformation of Citi, our core mission is unchanged. Our goal is to streamline our operations,strengthen our balance sheet, position ourselves to take advantage of historic global growth opportunities, and deliver to clients all the benefits of our strength, insight, and unique global reach.
* We are and will remain a bank. We will continue to help clients save,borrow, invest, transact, and we will provide them advice.
* Our commitment to our clients remains unchanged. We will continue to deliver what our clients expect from us. That is our firm commitment.Please reiterate that to the customers and clients you speak with today.
We continue to be focused on creating value for our shareholders and debt holders and restoring profitability sooner rather than later.
Thank you for your dedication, focus, and hard work. I look forward to speaking with you on Friday. Sphere: Related Content
Among facts stated which are actually relevant for creditors are:
- Total headcount has been reduced from 25,158 at filing 9/15/2008 to 4,142 at 1/1/2009
- A&M has 6 asset teams in place with defined tasks/plans
- Cash position has grown from $3.3 billion at filing to almost $7 billion on 1/2/2009
- Cash generated from asset sales is $1.7 billion consisting of $1.3 billion Barclays sale, $0.2 billion sale of Eagle Energy, and $0.1 billion R3 sale (Ed. to mega insider Rick Rieder)
- $145 million generated from subsidiary receipts, $86 million from investments and $17 from other.
- All this was offset by $293 million to keep the liquidation "operating"
- Lehman's loan portfolio at end of 2008 was $33 billion retianed and $8.4 billion pledged
- Reduced continget liability: unfunded commitments have been reduced by $6.3 billion (20%) mitigating potential claim exposure
- Carrying value of its 1,409 private equity principal investments was $12.3 billion
- Interestingly, total Real Estate Assets, allegedly the rotten fruit that was the cause of all this shebang, were valued at $42.9 billion (of which residential was only $3.4 billion, and the balance is commercial real estates spread among North America, Europe and Asia)
- Currently Lehman notes it has 45 legacy commercial real estate teams in place, 3 residential, and 8 corporate
- Lehman's derivatives book has been successful in collecting $2 billion in cash as of 1/2/2009; Curiously in the Deriv Book, there was $23.8 billion of receivables at petition with 3,930 ISDA counterparties (of this $14.3 billion, or 1,808 counterparties has been terminated)
- Neuberger Berman sale results in a $1.8 billion realized investment: $1 billion in retained stock and $0.8 billion in retained cash
- And of course the other assets, which are probably most interesting to our readers, which include a 2008 G550 airplane, 3 CRJ 200s, one Boeing 767 and one Sikorsky 76C
Lehman's bonds have recently traded at about 12 cents on the dollar indicating the market is expecting recoveries of around $16 billion on the roughly $150-160 billion of unsecured claims. Seems that if A&M continues doing their job efficiently (which is a change from prior sentiment, with bondholders using some very fancy expletives when referring to Bryan Marsal previously), then these bonds could actually run up quite a bit even in this horrendous environment. Also at 3pm Judge Peck appointed an examiner in the Lehman bankrtupcy case... Depending on just how big of a fan of Dick Fuld the examiner may be, all the actions of the Gorilla taken just before the bankruptcy may end up having a pretty Madoffesque impact on his current freely-roaming lifestyle.
Issued: January 13, 2009
I am both saddened and outraged to have to tell you that the SEC has brought a civil complaint today against Ramesh Chakrapani in our Corporate Advisory Services Group, charging him with passing on inside information three years ago about a pending transaction on which he worked as a 30 year old vice president.
We are all shocked by this alleged breach of the law and violation of our firm’s compliance policies and ethical standards. This employee has been suspended and we have told the authorities that they will have our firm’s full cooperation in their investigation into this matter.
This is the first time in the firm’s 24-year history that any employee of the firm has been accused of any infringement of securities laws. Abuse of inside information goes against everything our firm stands for. I have personally made it an absolute priority to speak to each new class of analysts and associates about the prime importance of protecting confidential information and guarding against insider trading. Our employees’ absolute integrity at all times and careful protection of any confidential information that comes into their possession have been the foundation of the reputation we have earned for professionalism and ethical conduct in everything we do, and these allegations undermine the many years of good work by all of the rest of us. I am personally infuriated that one person’s behavior could damage our unblemished record built up over nearly a quarter century.
Should you receive any calls about this matter, please refer them all to [redacted]. Because this case is the subject of a pending investigation, we would also ask you to refrain from discussing it with anyone. Sphere: Related Content
On the other hand it could have been this.
************ UPDATE ***********
For a second seemed the Kia was trying to pull an Austin Powers three point turn in an 8 foot wide one way street.... false alarm.... stay tuned
In a brilliant piece of reporting, CNBC says the Kia's windows will "likely not stop a sniper's bullet". true... true...
And they're off... good work navigating the 64th street traffic...
Good to see that CNBC agrees with our assessment of the vehicle Sphere: Related Content
Many more to come Sphere: Related Content
Next on Deck are the following (di)stressed companies with coupon payments due today (this is not an exhaustive list):
AbitibiBowater - 15.5% Notes due 7/15/2015 and 10.6% Notes due 1/15/2011
Allis-Chalmers - 9.0% Notes due 1/15/2014
Ames True Temper - FRNs due 1/15/2012
Atlantic Broadband - 9.375% Notes due 1/15/2014
Charter Communications - 11.125% Notes due 1/15/2011 and 13.5% Notes due 1/15/2011
City of Kiev (Not Holding our Breath on This One) - 8.625% Notes due 7/15/2011
Clear Channel (CCU) - 4.5% Notes due 1/15/2010 and 5.750% Notes due 1/15/2013
Dillards - 6.625% Notes due 1/15/2018 and 7.75% Notes due 7/15/2026
Eurofresh - 11.5% Notes due 1/15/2013 and 14.5% Notes due 1/15/2014
Evergreen Solar - 4% Convertible Notes due 7/15/2013
Hovnanian - 6.5% Notes due 1/15/2014
HRPT Properties - 6.5% Notes due 1/15/2013
KKR Financial - 7% Convertible Notes due 7/15/2012
Kraton Polymers - 8.125% Notes due 1/15/2014
Levi's - 9.75% Notes due 1/15/2015
Linens N Things (Ooops, not holding breath here either) - FRNs due 1/15/2014
Macy's - 4.8% Notes due 7/15/2009; 5.75% Notes due 7/15/2014; 7.875% Notes due 7/15/2015; 7.45% Notes due 7/15/2017; 6.650% Notes due 7/15/2024; 6.790% Notes due 7/15/2027; 6.9% Notes due 1/15/2032; 6.7% Notes due 7/15/2034
Nexstar Communications - 7.0% Notes due 1/15/2014
Noranda Aluminum - 7.250% Notes due 7/15/2012
Nova Chemicals - 6.5% Notes due 1/15/2012
Primus Telecom - 8.0% Notes due 1/15/2014
Reckson Operating - 5.150% Notes due 1/15/2011
RH Donnelley - 6.875% Notes due 1/15/2013; 8.875% Notes due 1/15/2016
Sensata Tech - 11.25% Notes due 1/15/2014
Simmons (no breath holding here) - 7.875% Notes due 1/15/2014
Six Flags - 12.25% Notes due 7/15/2016
Stone Container (Smurfit) - 7.375% Notes due 7/15/2014
Trina Solar - 4% Convertible Notes due 7/15/2013
Univision - 7.875% Notes due 7/15/2011
Vought Aircraft - 8.0% Notes due 7/15/2011
Young Broadcasting - 8.75% Notes due 1/15/2014
We say at least 30% of these guys file. Either way it will be a busy day for back offices everywhere as fund flows (or lack thereof) are processed. We will keep a close eye out and will let you know in the next day or two just how the carnage plays out. Sphere: Related Content
********** UPDATE ***********
Bloomberg reports Debbie Ryan, girlfriend of Sam, is pleading not guilty in helping him escape. She entered her plea before Magistrate Judge Lisa Margaret Smith at federal court in White Plains. Turns out she had been arrested January 9th. She is barred from any contact with Sam and is out on $75,000 bail. She faces a 10 year prison sentence if convicted. Sphere: Related Content
Full text of press release here Sphere: Related Content