SEPARATED AT BIRTH?

is it just me or does stan van gundy, the coach of the orlando magic and ron jeremy, famously fat porn star look like twins separated at birth?

GITMO IS JUST REAL ESTATE

there has been a big uproar around the world and amongt americans, more on the democratic side, to close the prison at gitmo because of our bad treatment of prisoners. we are putting the prisoners into categories; some are being released, some tried in the US and some to be detained indifinetly in the US. now some americans, with some clever stimulation by republicans are asking; do we really want the worst of the worst in our community? now you may say they are not going to be in the community, they are going to be in prison. but the prison will be in our communities. might they become targets. i dont know but i sure would not want them in my neighborhood; NIMBY!!!!!!!!!!!!!!

so what is wrong with gitmo? its just a piece of real estate. LOCATION IS NOT POLICY. you want to be nicer to the prisoners? fine. you can be nicer there. why be nicer here? its unlikely that al queda will invade gitmo; but if they do we have the right people ready with no civilians.

it seems like all symbolic bullshit to me.

NANCY AND ROGER

I think roger clemens is one of the great pitchers. i dont dont if he used steroids or not; i think he did. roger, under earth swore he has not. i think that was a mistake.

i do not think nancy pelosi is one the great speakers of the house. did she lie about the cia briefing? i dont know but like roger, i think she painted herself into a dangerous corner.

ME AND PAUL (KRUGMAN)

who thought i would agree with paul krugman about anything; even the time of day? but on may 15, he wrote in the nytimes op-ed, an article called, "empire of carbon", in which he admits that unless china deals with carbon issues we are all pissing in the wind. thats why the US was right about kyoto. kyoto without china was a joke. its like the time when i flew lufthansa to europe and i got a business class, non-smoking seat. unfortunately, the other side of the aisle was smoking. the smoke didnt know it wasnt supposed to not cross the aisle to my side.

CHRYSLER AND THE RULE OF LAW

it is pretty well accepted that there is a positive correlation between the rule of law and strong economies. so why is the obama administration trying to turn us into russia. we have probably the best bankruptcy laws in the world. companies that become insolvent can file, re-organize, and come out faster than any other country in the world.

so whats the deal with chrysler. the uaw labor contracts are executory contracts that can be voided in bankruptcy and yet for making some concessions they are getting around 55% of the reorganized company. Fiat gets to earn, i think up to 35% of the company for hitting milestones, few or none involve investing any money. and the senior secured bondholders are getting fucked and portrayed as bad people.

senior secured bonds and mortgages are supposed to be senior to everybody, excep dip loans. they are being treated like preferred stock. seems like a pure political pay off to organized labor. who owns the senior secured bonds? i dont know but assume some combo of money managers, hedge funds, individuals. hedge funds are the new black. hedge funds are money mangers; the underlying investors are wealthy individuals, pension funds, endowments, etc. by screwing these bondholders they are screwing these investors. why should these investors lose their rights? what was their crime?

this takes place while the govt. is trying to restart the credit markets. their actions in chrysler are diametically opposed to this effort. in one instance they are asking people to buy bonds with govt. supplied leverage; which implies that the investor can rely on the bond indenture and the rights of that bond under law; and in the other it is saying the indenture means nothing and the law means nothing

is this any way to run a railroad?

PUTS AND CALLS

the government announced that about 10 large banks need to raise more capital after being analyzed via stress tests. the answer? puts and calls.

in 1989, mellon bank was recapitalized with some good, creative work by bank managment, private equity firm Warburg Pincus and investment bank Drexel Burnham.

Mellon had too many non-performing assets on its books. the solution involved creating a so called bad bank where over a billion dollars of non-performing assets where transferred. that was when a billion dollars was real money. this improved the quality of the balance sheet on the asset side but its captial ratios where still too low.

the banks business franchise was sound, its stock price was low and the dilution of raising more capital weighed on the stock. the solution was an investor group was assembled;led by warburg and drexel and accepted puts from mellon that gave mellon the right to put X number of shares and Y price in 13 mos. mellon paid the investors by giving them calls. i dont remember the numbers but the deal is of public record and can be researched. in round numbers the investors got around 1 call for every 3-4 puts.

what this did was tell the market and the regulators that the bank had locked in contractually enough capital to get into capital ratio compliance at a price certain; but had the option of raising higher priced/lower cost capital over the next 13 months if possible. what happened was that with the certainty of the puts, the company raised more than enough capital thru a series of debt for equity exchange offers, and new offerings at much higher prices than the put prices; the puts expired unexercised; the shareholders experienced less dilution and the common stock appreciated alot and the put investors made good money from their calls.

how about the treasury or the fed issue 2 year puts to these 10 banks for common at todays market price and also preferred at an appropriate rate; get paid in calls and let the market sort itself out. i think the likelihood of a Mellon win win is highly likely