john-paulson

Last Man Standing

cityfile · 12/17/08 01:21PM

While most people on Wall Street are in a state of panic these days, it's worth noting that not everyone is heading into Christmas vacation with their gloomy look on their faces. Financial News has issued its list of the year's biggest winners and losers. The man who earned the No. 1 spot on the "Profit Makers" list? John Paulson, the gloomy-looking hedge fund manager on your left, who not only took home a ridiculous $3.7 billion last year, but is up another 20 percent in 2008. [WSJ]

Happy Birthday

cityfile · 12/12/08 07:20AM

Ed Koch is turning 84 today. Happy birthday, Mr. Mayor! Jennifer Connelly is 38. Actor Tom Wilkinson is turning 60. Hollywood powerhouse Paula Wagner is turning 62. Fox Business anchor Liz Claman is 45. Rory Kennedy, the youngest daughter of Bobby Kennedy, is 40. Model Bridget Hall is turning 31. Dionne Warwick is 68. Mayim Bialik (yes, Blossom) is 33. And your favorite game show host ever, Bob Barker, is celebrating his 85th. Weekend birthdays below!

Goldman's Losses, Paulson's Winnings, and More Layoffs

cityfile · 12/02/08 06:07AM

♦ Stocks are poised to move higher today after yesterday's bloodbath. [CNN]
♦ Goldman Sachs may report a loss of as much as $5 billion this quarter, the firm's first quarterly loss since it went public in 1999. [WSJ]
♦ Credit Suisse and HSBC have announced another round of job cuts. [Reuters]
♦ Highbridge Capital, founded by Glenn Dubin and Henry Swieca and owned by JPMorgan, is the latest hedge to suffer a fall. More than a third of its investors are looking to withdraw cash and the flagship fund is down 25%. [WSJ]
♦ One hedge funder doing fine: John Paulson. His firm has already cleared profits of more than $1 billion this year betting that the housing market would crumble and banks would fail. [Bloomberg]
♦ What does the head of a new Congressional panel set up to monitor the bailout have to say about Hank Paulson's strategy? That it does appear Paulson has a strategy. [NYT]

Consumer Prices Fall, Citi Makes Cuts, Paulson Parties

cityfile · 11/19/08 06:18AM

♦ The U.S. consumer price index fell 1.0 percent in October compared to the previous month, the biggest drop in 61 years. [WSJ]
♦ Citigroup is liquidating another one of its hedge funds after it plunged 53 percent last month. Also: Citi's stock dropped to its lowest level in 13 years yesterday. [FT, NYP]
♦ Just because he spends his days taking aim at Wall Streeters doesn't mean Andrew Cuomo left any bigwig financiers off the guest list for his birthday party/fundraiser on Dec. 2. [NYP]
♦ The CEOs of GM, Ford and Chrysler who pleaded poverty in front of Congress yesterday flew their private jets to get there. [ABC News]
♦ Most hedge funds are pulling back right now, but hedge fund king John Paulson actually celebrated on Monday night with a lavish dinner for more than 100 at the Metropolitan Club. [DB]

Cuomo Leans on Citi, Yang Plans to Step Down

cityfile · 11/18/08 06:30AM

♦ Attorney General Andrew Cuomo says Citigroup should follow Goldman's lead and forgo bonuses for senior execs. [NYP]
♦ Embattled Yahoo! CEO Jerry Yang has announced he will step down as soon as the board finds a replacement. [NYT, WSJ]
♦ Mark Cuban's attorney on the insider trading charges leveled against his client: "The case has no merit, and is a product of gross abuse of prosecutorial discretion." [WSJ]
♦ Treasury Secretary Hank Paulson is unlikely to use the rest of the $700 billion bailout fund on any new initiatives, preferring to hand over the remaining pennies—and very big problems—to his successor in the Obama administration. [WSJ]
Andrew Ross Sorkin on extending the bailout to GM: "Taxpayers shouldn't fork over a cent, at least until shareholders are wiped out, management is tossed out and the industry is completely reorganized." [NYT]

John Paulson Cuts Manse in Southampton (Again)

cityfile · 11/14/08 08:35AM

John Paulson, the hedge funder who testified on the financial meltdown in front of a congressional committee yesterday, is having a meltdown of his own in the Hamptons. Seven months after he put his mansion on the market for $19 million—and after lowering the price to $16.9 million in August—he's dropped it once again. The Southampton spread is now listed at $13.9, which is getting close to the $12.75 million he paid for the property in 2006. [WSJ, PDE]
♦ Murat Ozyegin, the son of Turkish mogul Husnu Ozyegin, paid $6.2 million for a three-bedroom apartment 40 East 66th Street. [NYO]
♦ The 12,000-square-foot Harlem house built by Barnum & Bailey co-founder James Bailey is on the market with a $10 million listing price. [WSJ]

AmEx Seeks Cash, GM's Prospects Darken

cityfile · 11/12/08 06:28AM

♦ American Express may be looking for as much as $3.5 billion in government assistance as the company struggles with reduced consumer spending and rising defaults. [WSJ]
♦ Hope is fading fast at GM. Shares fell to $2.92 on Tuesday, the lowest level in 65 years, and the company does not expect "to continue as a going concern" without a rescue plan in place by the end of the year. Meanwhile, Democrats are pushing ahead with a plan to save the automaker. [NYT, Bloomberg]
♦ Who doesn't want a piece of the bailout? The line outside the Treasury Department in Washington is a long one. [NYT]

Rate Cut, Bad Loans On the Rise

cityfile · 10/29/08 05:22AM

♦ The Fed is expected to cut interest rates again today, possibly to as low as 1 percent. [WSJ]
♦ The White House is pushing banks to stop hoarding the bailout billions and start making more loans. [AP]
George Soros says the number of hedge funds "will be reduced in size by anywhere between half and two thirds" over the next few years. [Reuters]
♦ GMAC, which is controlled by GM and Steve Feinberg's Cerberus Capital, is now looking to become a bank holding company so it can tap into the $700 billion bailout pool. [WSJ]
♦ Credit card crunch: Lenders wrote off an estimated $21 billion in bad credit card loans in the first half of 2008. [NYT]

Another Bad Day Ahead

cityfile · 10/24/08 04:50AM

♦ This could get messy: Asian and European markets were mauled on Friday, pointing to another monumental beating for the U.S. market today. [MW]
♦ A recap of Alan Greenspan's humiliating day in front of members of a congressional panel yesterday. [NYT, NYP]
♦ One of the very few people who is having an exceptional year: John Paulson, whose three funds are up between 15 and 25 percent. [WSJ]

Alexis Stewart Puts Her Penthouse Back on the Market

cityfile · 10/16/08 07:35AM

♦ Alexis Stewart (left) has put her penthouse condo at 27 North Moore Street back on the market for $12.4 million. That's the same price she was seeking when she first put it on the market 2007 before pulling it off the market earlier this year. She's since switched brokers, though: She traded Kathy Sloane for Dolly Lenz. [NYP, Prudential Douglas Elliman]
♦ Stephen Dorff has listed his one-bedroom penthouse at 251 West 19th Street for $3 million. The 1,200-square-foot pad comes with an 800-square-foot rooftop terrace, spa shower, and wired-in surround sound system. [Real Estalker, Modlin Group]
♦ Socialite/actress/Plum TV hostess Jennifer Creel has sold her four-bedroom home on Fisher's Island for $3.05 million. [Newsday]

Street Talk: $250 Billion Injected Into Banks

cityfile · 10/14/08 05:22AM

♦ In a extraordinarily bold move, the U.S. will use $250 billion to take equity stakes in major financial institutions like Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase as part of an effort to restore confidence in the system, unlock the credit markets and "avoid financial collapse." [WSJ, NYT]
♦ The government's move isn't unprecedented, although not everyone is very happy with the "partial nationalization" approach. [NYT, WaPo]
♦ Global markets continued to rise overnight as investors responded to news of the government's plan. [Bloomberg]
♦ Notwithstanding the bailout, some hedge fund titans like Steve Cohen, John Paulson, and Israel Englander are staying on the sidelines and keeping their billions in cash. [WSJ]

What California Can Teach Us About The Crisis

Moe · 10/03/08 12:36PM

California has always fostered a kind of insane optimism that strikes outsiders as absurd and delusional and actually kind of sick. My favorite symbol of this, when I lived there, was Rent A Wheel, where you could "rent to own" chrome rims for your tires, your job is your credit etc. etc., for an eminently reasonable $200 a month. This was not the sort of business model I could see thriving back East, but there was something weirdly charming about that, and the charm was contagious, and probably enabled some regrettable apparel purchases. Well, today the rest of the country officially caught the contagion; because the nation's financial institutions are suddenly too spooked to lend money to anyone but Hank Paulson, the state of California can't borrow money, and Governor Schwarzenegger is hitting up Hank Paulson to the tune of seven billion dollars. California, much like its citizenry, has one of the worst credit ratings in the nation. It's the double-edged sword of that sunny optimism, which badly needs to be redirected and channeled toward the national interest and perhaps other pursuits like surfing.There is little wonder House Speaker and California congresswoman Nancy Pelosi seemed so immediately convinced, as Wall Street skidded toward apocalypse two weeks ago, that Congress needed to pass a bailout plan like NOW. What is truly sad is that she failed to convince so many of her state's fellow Democrats, most notably the congresswoman from the neighboring district of East Bay, Barbara Lee, to vote for her bailout bill. Barbara Lee wanted the bill to include provisions protecting homeowners from foreclosure. Which makes sense. Just last year Lee's district had the highest price-to-rent ratio in the country: 51. Fifty-one. People were signing up for mortgages when they could have rented for less than a quarter of the price. They did this because they were stupid, but also because housing prices kept rising, and when the value of your house rose you could take out a home equity loan and use it to buy a new car (and in many cases, chrome rims.) Last year nearly a third of vehicle sales in California were purchased with home equity loans.house. An elementary school teacher who couldn't qualify for a bank loan to buy a $700 laptop could get a $450,000 mortgage because it had a house attached to it. No one ever anticipated that those houses would lose value quicker than the shiny new home equity-financed cars in their garages. In contrast, the lenders and the underwriters and the re-packagers and the insurers lobbied the SEC to allow them to amplify their exposure to the risk of that outcome exponentially by piling on debt of their own in a bid to maximize their profits, then proceeded to report said incredulity-straining profits in the assumption that they would continue rising and proceeded to pass those profits on to their employees, who in turn signed on for 100% mortgages on eight figure properties in Greenwich, where fear of the same sort of tidal wave of foreclosure has citizens proclaiming the financial crisis "Our Katrina." The whole thing was a show of such dramatic private sector incompetence it could not be achieved had the plutocracy not known exactly what the fuck it was doing, just as that great Californian Ronald Reagan knew exactly what the fuck he was doing when he railed against government waste only to ratchet up that waste to unprecedented levels by outsourcing most of the government to crony capitalists whose fiduciary responsibility by definition required they do all they could to maximize government waste. It was all an ingenious plan to de-fund the left and its socialist bureaucracy of bleeding-heart "programs," and it worked so well the Bush Administration ripped off the strategy to launch a trillion-dollar war that represents a vast minefield blocking any of Obama's plans to "level the playing field." Because while Obama's plans for the economy allegedly involve an average $800,000-a-household tax increase on the superrich, those plans were drawn up before the employees of Goldman Sachs spent their $21 billion in Christmas bonuses. The falloff in asset values has all the big pundits worrying we'll become the next Japan, but when you go to Japan and hear about the "Boom Years" of the eighties what strikes you is that most Japanese actually had some firsthand experience of said "Boom years." Did you? We allowed America to become the land of ten thousand centimillionaires; now that we have a crisis poised to disproportionately — from a Year On Year perspective, anyway; that's how these people think — hurt that untouchable class, it is not going to be easy to wring out a massive increase in nominal tax dollars from them. That is, of course, is what must be done. And it probably won't be positive for the Dow or the GDP or productivity levels or any of the arbitrary little numbers with which we're accustomed to measuring our economic well-being. It may well be a short term political windfall for the stubbornly fact-resistant class of politician who likes to say tax cuts on the wealthy always create jobs (when in fact no private sector of the economy besides health care has created jobs since 2000) or that Government "isn't the solution; more often than not it's the problem." What is the problem, of course, is people who think government is the problem who go into the government in what more often than not comes off like a twisted attempt to prove that. But the happy delusions of the state that brought us the Great Communicator are infectious, and the era clearly, desperately needs a Great Rebutter capable of optimistically guiding the country through what's going to be a rough time for all. The deep — and deeply unpatriotic — immorality of the "moral hazard" that has defined the past decade must be impressed upon every American voter. Every American voter needs to be able to visualize the 24-car garage of the billionaire hedge fund manager and wonder if some of the money might have not been better spent refurbishing the subway system or paying teachers more or helping an irresponsible homeowner renegotiate her mortgage or providing more comprehensive job training to some former welfare queen. All that stuff, after all, creates jobs too. But to impress these ideas upon voters requires a kind of moral authority that is undermined by pandering partisan rhetoric and the pages and pages of pork-tasting provisions of the bill Congress is about to pass. (It's also sort of undermined by gazillion dollar tax breaks of the sort extended to Treasury Secretary Hank Paulson for taking the job, but whatevs.) Warren Buffett could certainly muster it; more importantly, he could articulate recent history in a way the politicians he supports can't. More importantly, he can inspire and/or shame his partners in uberwealth into accepting and acknowledging a measure of social responsibility, and more powerfully, broadcasting that sense of responsibility to the public. Billionaire hedge fund manager John Paulson profited handsomely betting against the housing market; he now is giving much of that away to helping screwed homeowners. More people should know about him; more rich folks should emulate him.

Market Crisis So Not Averted (!!!)

Moe · 10/02/08 07:07PM

Today this guy I know ruminated about why white bloggers employ so many goddarn exclamation points. I didn't really read it because I have ADD and assume everyone else does too so when I do actually bother employing punctuation at all it is usually for the purpose of impressing upon everyone the total urgency of whatever it was I just wrote and what better way to achieve that than an exclamation point!? (Or four!!!!!!) But hey wait, I actually know where I picked up this silly habit — another white blogger! Back from before they called them blogs, tho. There was this ZOMG-tacular writer Andy Serwer who wrote a daily stock market column on the Fortune website called "Street Life." It made no sense!!!! Except to me. (The synthetic constant proportion portfolio insurance of online commentary!) So you can blame that guy for everything, including the credit crisis! Anyway it's in Andy's honor (he still writes a blog, but it's no longer crazy because he is on teevee now) that I wrote the evening's Panic Roundup in the Steez De Serwer. (Shall I call it "Manic Panic"?)Okay, so, today's Times byline orgy re-enactment of that coupla days a coupla weeks ago where suddenly every banker was like "OHSHTWRSCRWD" achieved two important things: 1. Reminded "Main Street" (Aside: irk you as much as it does yours true that the pols keep calling it "Main Street" when the whole reason this started is because there's NO SUCH THING anymore in this country?? Because everyone had to have his own house, recall?? Anyhoo) that, you know, every business in this freakin country operates on debt, not because they're spoiled delusional children like every last CEO on the Street except John Thain (which reminds me, Johnny Boy is staying on with the new Bank of AMerillca! See, you KNEW he wasn't in it for the nine figure pay package, aw…) but because DUH, because that's like the basis of all civilization or something!! And 2. Reminded Wall Street Just How Crazy it is with a creepy/inspiring (which? both?) anecdote about Black Thursday over at Goldisachs. Lloyd was freaking out, Goldman stock in freefall, etc. etc.…and then one o'clock rolls around and someone they identify as a "prankster" starts playing the "Star-Spangled Banner" over the loudspeaker. All the bankers are like, what?! Some even put their hands over their hearts. And at THAT VERY MOMENT, the stock stopped falling. Turned up a little even! Guess what had happened? That's right, a short-selling ban had just been announced!! Capitalism itself had been suspended! Think that means there's something Goldman guys find inspiring about this country… other than its free market?? Yeah probably not, but I thought about shedding a tear! Okay so moving on, the big story is…well shucks, got a few hours? No of course not! We're all about to hit me baby one more time with another public appearance by everyone's fave fakenbaked ratings black gold governess!!! (Broad is like Merrill with the CDOs after even AIG stopped insuring them, we know she's bad for us, but we just can't stop.) So I'll make it quick: everyone, except maybe Buffett and John not to be confused with Hank Paulson, is screwed: every other hedge fund is screwed, Veronica Peterson of Columbia, Maryland, who is trying to pay a $4,450-a-month mortgage on fifty grand a year — hey, why not have a go at that, quant jocks? — is screweder, the market that is being artificially propped up by the continued short sale ban managed to fall 350 points today anyway, not that anyone is paying attention to the market because the entire private sector is too busy wondering where the heck they're supposed to find a line of credit when the entire financial system won't trust anyone but the guv-mint with its money anymore. Yikes! Oh, though if Veronica Peterson's story shook your faith in private enterprise, here's a doozy from the public sector: there's a special provision in the new bailout bill offering (SORELY-needed) tax relief to the makers of wooden arrows used in bow-n-arrow sets for children. Think you could poke someone's life out with one of them things? Anyway, if I were really Serwer this is where I would actually round up a few MORE asides and tangents here and call them "Loose Change," but in the Web 2.0 era that gets to be your job! Although if Dismal Science wants offer himself for the position of Serwer's old standby source "Deep Blue" (sug. nickname change: "Deep Shit") he knows who to G-chat!

Street Talk: Bailout Skepticism

cityfile · 09/24/08 05:29AM

♦ Treasury Secretary Hank Paulson and Federal Reserve chair Ben Bernanke's visit to Washington did little to reassure lawmakers, who were almost uniformly critical of the government's proposed $700 billion bailout. [NYT, WSJ, WSJ]
♦ By the way, how much is $700 billion? Slate runs the numbers. [Slate]
♦ The FBI is now involved in the meltdown. The agency has opened preliminary investigations into possible fraud at Fannie Mae and Freddie Mac, Lehman Brothers and AIG. [NYT, WSJ]
♦ Warren Buffett's $5 billion investment in Goldman is viewed as a strong sign of confidence. And Goldman's stock is way up, not surprisingly. [NYT]
♦ Three top Lehman execs including Dick Fuld sold shares after Lehman filed for bankruptcy, with Fuld selling 3.17 million shares at an average of 21 cents a share. [WSJ]

John Paulson's Southampton Price Cut

cityfile · 08/29/08 09:35AM

Good news for anyone looking for a huge bargain in the Hamptons now that we've reached the end of the season. After languishing on the market for four months at $19.5 million, billionaire hedge funder John Paulson has slashed the price of his 6,800-square-foot Southampton home. It's now just $16.9 million. Even with the $2.6 million discount, Paulson will still collect a profit (assuming he sells at that price, of course). He bought the three-acre property from Jurgen Friedrich for $12.75 million in 2006. But after his hedge fund's stellar year in 2007—Paulson himself collected ten figures, making him the highest-paid man in finance for the year—it was clear he'd have to trade up, and he picked up an estate nearby for $41.3 million. After the jump, photos of Paulson's hand-me-down.

Street Talk

cityfile · 08/06/08 04:57AM
  • Dan Och's Och-Ziff reported a net loss during the second quarter; the stock has been cut in half since its IPO last year. [Reuters, NYP]

Street Talk

cityfile · 07/23/08 05:08AM
  • House and Senate leaders have sorted out an arrangement to prop up Fannie Mae and Freddie Mac. [WSJ]

Winners & Losers

cityfile · 07/22/08 09:12AM

The Wall Street Journal has the skinny on the hedge funders who are "defying skeptics who questioned whether they could keep their runs going." John Paulson's fund is up 20 percent through the end of June; Phil Falcone's Harbinger Capital Partners I is up 42 percent; and Daniel Arbess, who oversees Perella Weinberg's Xerion fund, posted a 25 percent gain. What about Lehman short-seller David Einhorn, who earned such breathless coverage from New York a few weeks ago? "Up only a few percentage points through June." [WSJ]

The 59th and 5th Power Grid

cityfile · 07/14/08 12:08PM

Ever wonder why the CEO at your company has a $10,000 telescope parked in the corner of his office? It's not to admire the birds. Or even to peek at the woman in the neighboring office building who changes her blouse at precisely half past five. It's to look in the offices of other CEOs, obviously.

Street Talk

cityfile · 06/19/08 05:17AM
  • Fallout from Morgan Stanley's disappointing quarter. To add to the mess, John Mack is now dealing with the discovery that a rogue trader lost $120 million. [NYP, WSJ]