Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-59808 Tue, 17 May 2016 15:19:08 GMT The Longest Uninterrupted Smart Money Selling Streak In History Extends To 16 Weeks http://implode-explode.com/viewnews/2016-05-17_TheLongestUninterruptedSmartMoneySellingStreakInHistoryExtendsTo.html iehi-feed-59774 Sat, 14 May 2016 01:08:46 GMT Trump's Chief Fundraiser Schmoozes Hedge Fund Execs, Seeking Donations http://implode-explode.com/viewnews/2016-05-13_TrumpsChiefFundraiserSchmoozesHedgeFundExecsSeekingDonations.html Fresh off being named Donald Trump's chief fundraiser, longtime financier Steven Mnuchin headed to Las Vegas for the nation's largest hedge fund conference with one task: target elite donors to raise the $1 billion the candidate seeks for his general election campaign. From the first day of the SkyBridge Alternatives Conference, or SALT, attendees roaming the conferences and halls of the Bellagio hotel traded sightings of Trump's representatives mingling with the crowd of hedge fund managers and investors. There were even whispers that Trump might show up himself.

On Wednesday night, Mnuchin, a hedge fund manager at Dune Capital, wearing a dark tailored suit, dined with former House speaker John Boehner, billionaire hedge fund manager Kenneth C. Griffin, and former CIA director David H. Petraeus--a gathering hosted by Anthony Scaramucci, hedge funder and SALT organizer.

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Mnuchin also reportedly met with former Massachusetts Senator Scott Brown, oil tycoon T. Boone Pickens, and cosmetic business exec Georgette Mosbacher. The attitude from the financial industry was a lot more welcoming than in February, when Luke Thorburn, the sole Goldman Sachs employee who donated to the Trump campaign ($534.58), was put on leave due to his association with a website that sold hats that tweaked Trump's "Make America Great" catchphrase.

Despite all of the handshaking and potential money-passing, support for Trump at the conference felt shaky. Pro-Trump comments were often met with awkward silences from the crowd--and even gasps. Pickens's support for Trump's ban on Muslims in the U.S. for vetting purposes drew loud gasps from the crowd.

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iehi-feed-59768 Fri, 13 May 2016 14:43:54 GMT Stephen Schwarzman And Blackstone: Wall Street's Unstoppable Force http://implode-explode.com/viewnews/2016-05-13_StephenSchwarzmanAndBlackstoneWallStreetsUnstoppableForce.html EVER SINCE THE FINANCIAL crisis, risk--the fuel for Wall Street's astonishing profitability--has been forbidden fruit. The Volcker Rule, for example, means that today the mightiest trading firm, Goldman Sachs, is effectively blocked from proprietary trading. Capital restrictions have likewise limited the lending and merchant banking activities of big banks, like JPMorgan Chase JPM -0.06% and Deutsche Bank , that would have ordinarily drooled over the GE deal. The power has shifted to the so-called "buy side," to asset managers, and among them none is better positioned than Schwarzman's largely unregulated $344 billion private equity conglomerate, Blackstone Group.

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So while regulators wring their hands over restricting compensation at firms such as Citigroup C -1.06%, UBS and Morgan Stanley MS -0.49%, Schwarzman happily counts the $800 million in dividends and gains he personally took home in 2015, 34 times the $23 million that Goldman's chief, Lloyd Blankfein, earned and almost 30 times the $27 million paycheck for JPMorgan Chase CEO Jamie Dimon. Schwarzman's net worth stands at $10.2 billion, making him one of five billionaires Blackstone has produced--more than any other Wall Street firm in history.

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In the past eight years Blackstone's footprint and influence under Schwarzman have become nothing short of breathtaking. Since the financial crisis Blackstone's assets have nearly quadrupled. More than 85% of its 2,070 employees have joined since 2007, and the firm has introduced dozens of new products. Blackstone has major stakes in 92 companies, from Hilton Hotels and Michaels Stores to iconic brands like Versace and Leica Camera; it owns thousands of pieces of commercial real estate, including Manhattan's Stuyvesant Town and Chicago's Willis Tower, and more single-family homes in the U.S. than any other private entity. In nearly every business in which it operates, including hedge funds and credit, Blackstone is the leader.

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In its core private equity business, Blackstone hasn't had a single fund lose money since it launched its first one in 1987. The average annual returns realized by its private equity funds (19%), real estate funds (20%) and credit funds (14%) have all trounced the S&P 500, which has delivered an annualized return of 9.7% over the past 30 years.

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At 5-foot-8 with an unassuming posture and a penchant for conservative, loosely fitting suits, Schwarzman is not someone you'd expect any flashiness from. But in 2007 he ignited populist anger with a $3 million birthday bash held in New York City's Park Avenue Armory, featuring Rod Stewart, Patti LaBelle and Martin Short. He made matters worse later by comparing President Obama's threat to end the carried-interest tax preference--which lets private equity types pay capital gains rates on their income, perhaps the most indefensible tax loophole in America--to a Nazi invasion (he later apologized).

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iehi-feed-59723 Fri, 06 May 2016 20:32:27 GMT Panama Papers alleged source breaks silence, denies being a spy http://implode-explode.com/viewnews/2016-05-06_PanamaPapersallegedsourcebreakssilencedeniesbeingaspy.html iehi-feed-59722 Fri, 06 May 2016 20:26:40 GMT World's rich families put private equity firms on notice http://implode-explode.com/viewnews/2016-05-06_Worldsrichfamiliesputprivateequityfirmsonnotice.html Wealthy families are embracing their inner Warren Buffett, albeit on a smaller scale. They used to hand most of their assets to managers to invest. Now, following the likes of Buffett, Michael Dell and Bill Gates, many are acting like private equity firms, buying large stakes in companies or acquiring them outright. Families can exert tighter control over their money, give the kids something to do and cut their deal fees.

But the trend has meant that private equity shops have been forced to scramble to make sure they don't lose a critical source of money for their buyout funds.

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"After a decade of direct investing we found that we actually saved millions, which were reinvested in companies and assets -- huge, huge savings," said Chad Hagan, whose family built its wealth in private health-care and financial businesses... Almost 70 percent of family offices engage in direct investing, according to an April survey of 80 offices by the Family Office Exchange. And in 2015 they outperformed buyout firms. Direct deals returned them 15 percent on average, the survey showed -- more than double private equity results that year.

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iehi-feed-59693 Tue, 03 May 2016 19:30:41 GMT NYC Icon Fairway Falls to Private Equity, Hip New Grocer Competition http://implode-explode.com/viewnews/2016-05-03_NYCIconFairwayFallstoPrivateEquityHipNewGrocerCompetition.html New York City supermarket Fairway, an icon of the Upper West Side of Manhattan, known for its meats, cheeses and smoked fish, in addition to its branded black & white cookies, has filed for bankruptcy. The grocer's downfall can be traced to a 2007 sale of the company from the founding Glickberg family to private equity firm Sterling Investment Partners, and a recent expansion from its flagship on 74th street and Broadway across the tri-state area.

Sterling Partners listed Fairway on the Nasdaq at a $536 million valuation three years ago, raising$177 million for a nationwide expansion. However, Fairway struggled on public markets, saddled with hundreds of millions of dollars in debt and rising competition in its New York City backyard from the likes of Trader Joe's , Whole Foods, West Side Market, and Eataly.

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iehi-feed-58569 Wed, 30 Dec 2015 14:00:47 GMT Kazakhstan Looks to Private Equity for Help With Its $93 Billion Cash Pile http://implode-explode.com/viewnews/2015-12-30_KazakhstanLookstoPrivateEquityforHelpWithIts93BillionCashPile.html iehi-feed-58303 Wed, 25 Nov 2015 15:29:07 GMT CalPERS fee disclosure raises question of whether private equity returns are worth it http://implode-explode.com/viewnews/2015-11-25_CalPERSfeedisclosureraisesquestionofwhetherprivateequityreturnsa.html The nation's largest public pension fund peeled back a layer of secrecy to reveal that it has paid private equity managers $3.4 billion in bonuses since 1990, a hefty figure sure to heighten arguments over whether the controversial sector is worth its high risk and expense.

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CalPERS' disclosure, although not the first of its kind, is considered a landmark because of the system's size and influence in the market. It's expected to lead major pension funds to demand similar, or even more, disclosures from a multitrillion-dollar industry that has been insulated from calls for reform by the relatively rich returns it generates.

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iehi-feed-55779 Fri, 02 Jan 2015 18:37:11 GMT US eases oil export ban in shot at Opec as crude price slumps http://implode-explode.com/viewnews/2015-01-02_USeasesoilexportbaninshotatOpecascrudepriceslumps.html iehi-feed-53239 Sat, 01 Feb 2014 21:47:10 GMT Italy is wasting away month by month http://implode-explode.com/viewnews/2014-02-01_Italyiswastingawaymonthbymonth.html iehi-feed-52824 Sun, 01 Dec 2013 14:25:21 GMT Boosting Profits While Wages Sag: Japan http://implode-explode.com/viewnews/2013-12-01_BoostingProfitsWhileWagesSagJapan.html iehi-feed-52543 Sun, 27 Oct 2013 16:04:45 GMT Something Is Not Right With This $6 Million Bid To Buy The World Largest Industrial Ruin http://implode-explode.com/viewnews/2013-10-27_SomethingIsNotRightWithThis6MillionBidToBuyTheWorldLargestIndust.html iehi-feed-51580 Wed, 17 Jul 2013 21:13:49 GMT Markit: Worldwide Business Confidence Drops to Post-Crisis Low; Makes Fed "Tapering" Unlikely http://implode-explode.com/viewnews/2013-07-17_MarkitWorldwideBusinessConfidenceDropstoPostCrisisLowMakesFedTap.html iehi-feed-50692 Fri, 03 May 2013 20:13:08 GMT The Man Who Oversees $65 Billion Discusses Action In Gold http://implode-explode.com/viewnews/2013-05-03_TheManWhoOversees65BillionDiscussesActionInGold.html iehi-feed-50106 Wed, 27 Feb 2013 16:10:41 GMT New Stream Hedge Fund Executives Charged with Criminal Fraud http://implode-explode.com/viewnews/2013-02-27_NewStreamHedgeFundExecutivesChargedwithCriminalFraud.html iehi-feed-50066 Sun, 24 Feb 2013 18:57:49 GMT Post-downgrade Britain: Choose your vicious circle http://implode-explode.com/viewnews/2013-02-24_PostdowngradeBritainChooseyourviciouscircle.html iehi-feed-47491 Fri, 14 Sep 2012 17:16:18 GMT Is Wells Fargo Run By The Catty Ladies From TV's Dynasty? http://implode-explode.com/viewnews/2012-09-14_IsWellsFargoRunByTheCattyLadiesFromTVsDynasty.html iehi-feed-47371 Tue, 11 Sep 2012 19:12:34 GMT FDIC Sues Banks and Depositors Over MBS Fraud http://implode-explode.com/viewnews/2012-09-11_FDICSuesBanksandDepositorsOverMBSFraud.html iehi-feed-47246 Fri, 07 Sep 2012 19:05:06 GMT Matt Taibbi On HuffPost Live: 'Private Equity Companies Do Not Exist To Turn Around Companies' http://implode-explode.com/viewnews/2012-09-07_MattTaibbiOnHuffPostLivePrivateEquityCompaniesDoNotExistToTurnAr.html iehi-feed-45081 Wed, 18 Jul 2012 03:49:55 GMT "Romney's Bain Yielded Private Gains, Socialized Losses" - Private Equity Exec http://implode-explode.com/viewnews/2012-07-17_RomneysBainYieldedPrivateGainsSocializedLossesPrivateEquityExec.html Thanks to leverage, 10 of roughly 67 major deals by Bain Capital during Romney's watch produced about 70 percent of the firm's profits. Four of those 10 deals, as well as others, later wound up in bankruptcy. It's worth examining some of them to understand Romney's investment style at Bain Capital.

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While Bain Capital wasn't alone in using financial engineering to turbo-charge its returns, it was among the most aggressive under Romney's leadership. Enriching investors by taking leveraged bets isn't a qualification for a job requiring long-term vision and concern for public welfare. It is appropriate to point that out to voters.

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