Posts tagged warren buffett
Deals wrap: Competition for Potash?
Sep 7th
China’s state-owned chemicals group Sinochem has approached Singapore state investor Temasek to join a consortium that may bid for Potash, sources said. It was unclear if this potential consortium will bid to buy a blocking stake or make a full counter offer. *View article
Air Products raised its bid for Airgas to $5.5 billion, the latest salvo in its hostile move on the rival company. *View article
The Justice department is looking into Google’s takeover of airline ticketing software firm ITA Software Inc, to determine whether the deal would exert too much influence on the online travel industry. *View WSJ article *View scores.org graphic on Google’s acquisitions
The WSJ takes a look at Berkshire Hathaway’s bid for Wesco Financial. “This begins as a Warren Buffett love story. The intriguing question is whether it ends that way,” reports the WSJ. *View WSJ article *View additional article on the deal
When plutocrats call for higher taxes
Sep 2nd
Bob Rubin and Julian Robertson have clearly come to the happy conclusion that, having lived through the first eight months of the year, both of them are likely to survive well into 2011 and beyond. But they want to tax their fellow plutocrats who aren’t so lucky, by bringing back the estate tax for the remainder of 2010, and even trying to make the tax retroactive to January.
That’s a good idea, of course. It’s ludicrous that the estate tax is at zero this year. But it’s not going to be easy to pass a retroactive tax, especially when its biggest cheerleaders are these two guys: the person most to blame for the global financial crisis, and a hedge-fund billionaire who carefully skirts residency requirements to avoid paying millions of dollars in taxes.
In the interests of full disclosure, it would have been nice to see the amount of money that Rubin and Robertson have spent between them on estate planning and strategies designed to minimize the taxes that their heirs will pay on their billions.
The subtext to all op-eds like this — the ur-example, of course, being one of those many editorials from Warren Buffett saying that he should pay more taxes — is that the authors are so noble and selfless that they will even pay more taxes themselves if doing so is in the national interest, and if everybody else in their position has to do so too. But of course these guys are always going to have to pay whatever the estate tax happens to be, and will probably go to pretty great lengths to avoid as much of it as possible.
So while I agree with what they’re saying, I’m still a little bit nauseated by the self-congratulatory undertones to the fact that these men, in particular, are the people saying it. Rubin, in particular, needs to embark upon a very great deal of apologizing to the nation before any of us should listen again to anything he says. Even — especially — if it seems as though it makes sense. If he hasn’t learned any lessons, he’s a very bad guide to what we should be doing going forwards.
Harrisburg defaults
Sep 1st
The Daily Beast kicked off this week’s offerings with a slideshow listing “20 Recession-Proof Cities”: the ones with high pay and sustained economic growth. I’m not entirely clear on how to link to any given city on the list, but if you click through you’ll find Harrisburg, Pennsylvania at #7, the very picture of a hale urban center.
Which is now defaulting on its municipal debt. It’s the largest municipal default of the year, after Jefferson County in Alabama, and it surely presages more to come.
It also shows the moral hazard of bond insurance:
A missed payment is “a bad signal,” said Alan Schankel, managing director at Janney Montgomery Scott in Philadelphia, adding that it raises the concern that some distressed issuers may be more likely to skip bond payments guaranteed by insurance companies.
It’s worth noting that Jefferson County, too, had its bonds wrapped by an insurer.
No one explains this better than Warren Buffett, who laid it all out in 2009: the people running municipalities are far more likely to default if they end up harming only insurers than they are to default directly on their bondholders — who are also likely to be their personal friends and colleagues.
Which might partially explain — along with an incinerator fiasco — why Harrisburg, which is doing quite well, economically speaking, has now contrived to default.
Frank Rich Takes On The Billionaire ‘Sugar Daddies’ Backing The Tea Party
Aug 29th
ANOTHER weekend, another grass-roots demonstration starring Real Americans who are mad as hell and want to take back their country from you-know-who. Last Sunday the site was Lower Manhattan, where they jeered the “ground zero mosque.” This weekend, the scene shifted to Washington, where the avatars of oppressed white Tea Party America, Glenn Beck and Sarah Palin, were slated to “reclaim the civil rights movement” (Beck’s words) on the same spot where the Rev. Martin Luther King Jr. had his dream exactly 47 years earlier.
Vive la révolution!
There’s just one element missing from these snapshots of America’s ostensibly spontaneous and leaderless populist uprising: the sugar daddies who are bankrolling it, and have been doing so since well before the “death panel” warm-up acts of last summer. Three heavy hitters rule. You’ve heard of one of them, Rupert Murdoch. The other two, the brothers David and Charles Koch, are even richer, with a combined wealth exceeded only by that of Bill Gates and Warren Buffett among Americans. But even those carrying the Kochs’ banner may not know who these brothers are.
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More on Climate Change
Druckenmiller exit suggests fund size may matter
Aug 19th
Stanley Druckenmiller’s departure may reveal something important about hedge funds. The famed investor plans to close down his 30-year-old, $12 billion firm, Duquesne Capital Management. On one level, it’s just a very rich guy wanting to play more golf. But on another, it suggests bigger fund firms may struggle to live up to past glories.
The onetime George Soros colleague clearly doesn’t need the money. Forbes pegged Druckenmiller’s wealth at $2.8 billion earlier this year. But he hasn’t wanted for years, and he’s only 57. The desire to keep winning has kept other billionaires involved in the investing business far longer. His old boss Soros, for instance, just turned 80. Warren Buffett is only a couple of weeks off that landmark and Carl Icahn is well into his 70s.
Early retirement can have its appeal. There’s nothing wrong with recognizing the toll that managing other people’s money can take. And investors with considerably smaller fortunes have been lured by the golf links. Druckenmiller, a seven handicap, cited both factors in his decision, according to an interview with Bloomberg. The billionaire also has serious philanthropic interests.
But there’s another factor. Duquesne is down some 5 percent so far this year. Druckenmiller’s vehicle has never lost money over a full year. He implied that managing more than $10 billion makes it hard for him to meet performance standards he sets himself, having delivered average annual returns of 30 percent or more since 1986.
Investors would be wise to reflect on the point. Much new hedge fund investment is currently going to the biggest firms — some of which now manage more than $30 billion each. They offer diversification and the plentiful resources and infrastructure that comfort many institutional investors. But they also need to find bigger opportunities, take more risk or settle for lower returns than otherwise similar smaller funds.
The succession question here offers an opportunity in this regard. Some notable fund founders have passed the baton to groomed successors, as Jim Simons did last year at Renaissance Technologies. But in other cases, like Druckenmiller’s, stepping back means investors will get their cash back and have to redeploy it. Given what Druckenmiller seems to be saying about the challenges facing the largest firms, he may have just left investors with a valuable parting tip.
Johnny Carson’s $156 Million Donation: Entertainer Continues Philanthropy After Death
Aug 9th
Information has surfaced showing that Johnny Carson, the beloved “Tonight Show” host who passed away in 2005, left $156 million to charity.
Carson’s generous posthumous donation was uncovered by The Smoking Gun, where reporters looked at tax returns filed by the John W. Carson Foundation. After his death, the $156 million contribution was transferred from Carson’s estate to his foundation, where the money is being used to support dozens of nonprofit organizations. Carson never publicly announced the donation, letting his good deed slip by quietly until its recent revelation.
So far, Carson’s money has been doled out to the Children’s Hospital of Los Angeles, the Los Angeles Free Clinic and Planned Parenthood. Carson’s foundation also supports several nonprofits in Nebraska, the entertainer’s home state.
The enormous scale of Carson’s charitable gift is reminiscent of other generous philanthropists, Warren Buffett and Bill Gates, who have recently been making headlines by pledging billions to charity and asking America’s wealthiest families to donate half of their money.
Forty Of U.S.’ Richest Vow To Donate Most Of Wealth
Aug 4th
by Frank James
Nati Harnik/AP
Bill Gates, left, and Warren Buffett have been pleasantly surprised by how ready some of their fellow billionaires have been to vow to give most of their fortunes away.
For months, billionaires Bill Gates and Warren Buffett have held dinners for some of the nation’s wealthiest people and families to get them to pledge to eventually give away most of their fortunes to charity. On Wednesday they announced forty of the nation’s richest people have signed on.
Gates and Buffett provided the names of those in what they hope will be the first of the superwealthy to agree to what they’re calling the Giving Pledge.
Their list includes Larry Ellison, the CEO of Oracle; George Lucas of Star Wars fame and New York City Mayor Michael Bloomberg.
An excerpt from Gates and Buffett’s news release:
“We’ve really just started, but already we’ve had a terrific response,” said Warren Buffett, pledge co-founder and chairman and CEO of Berkshire Hathaway. “At its core, the Giving Pledge is about asking wealthy families to have important conversations about their wealth and how it will be used. We’re delighted that so many people are doing just that – and that so many have decided to not only take this pledge but also to commit to sums far greater than the 50% minimum level.”
The Chronicle of Philanthropy reported that Gates and Buffett said during a conference call that they were surprised by how responsive so many of their fellow billionaires have been.
Worth noting is that some of those they reached to weren’t so helpful. An excerpt from the chronicle:
Asked why some wealthy people have turned him down, Mr. Buffett cited a mix of reasons. Some people spouted off about how they don’t like government, some gave him a lecture, some said they felt a responsibility to pass wealth along to their children, and others simply had a plane to catch, said Mr. Buffett.
“We don’t give up on them,” he said. “Every saint has a past and every sinner has a future.”
Tags: Giving Pledge, Bill Gates, Warren Buffett
Larry Ellison, dozens more, to give away wealth
Aug 4th
Oracle CEO along with George Lucas, Michael Bloomberg, and host of other billionaires say yes to call from Bill Gates and Warren Buffett for charity donations.
Jeff Greene, Florida Senate Candidate, Asks Warren Buffett To Dispel Attack Ads
Aug 4th
ORLANDO, Fla. — Jeff Greene reached out to fellow billionaire Warren Buffett to help defend himself against Florida Democratic Senate rival Kendrick Meek’s attack ads.
Meek, a congressman from Miami, has been airing ads in which an announcer says, “Warren Buffett called Greene’s scheme ‘financial weapons of mass destruction.’”
The campaign called Warren’s office and later e-mailed a link to Meek’s ad to the legendary investor’s assistant, Debbie Bosanek. Bosanek confirmed Tuesday she showed it to Buffett.
“He said, ‘I have never spoken about Jeff Greene or any of his transactions in any way,” Bosanek said.
An angry Greene said Meek is twisting the words of a well-respected, well-trusted individual to attack him.
“Kendrick Meek should run a commercial apologizing to Florida for lying,” Greene said after meeting with a small group of senior citizens. “His campaign is based on deception.”
The Meek campaign said it never claimed Buffett was talking specifically about Greene, but rather speaking in general about the types of investments Greene made.
Greene went from millionaire to billionaire status after correctly predicting the housing market would collapse and making investments that profited off the bubble burst.
“We’ve said Warren Buffett said it about credit default swaps and Jeff Greene invested in credit default swaps,” said Abe Dyk, Meek’s campaign manager.
He shot back that the Greene campaign is running ads stating that Meek is on a Washington watchdog group’s list of “crooked candidates” even though Greene is also on the list. Greene was added to the Citizens for Responsibility and Ethics in Washington’s list after Meek was on the initial list released last month.
“It’s grossly hypocritical for him to do that ad when he’s on the list too,” Dyk said.
Greene said he had no plans to take down the ad.
The winner of the Aug. 24 primary will face Gov. Charlie Crist, who is running as an independent, and Republican Marco Rubio. The race is to fill the seat Mel Martinez left early. Crist appointed his former chief of staff, George Lemieux, to fill Martinez’ unexpired term.
More on 2010 Elections
Deals wrap: A successor for Buffett?
Jul 30th
A fairly unheralded 44-year-old Chinese-American hedge fund manager, with a strong background as a human rights activist, has become a leading candidate to replace Warren Buffett, should he retire as founder and CEO of the $100-billion Berkshire Hathaway fund, according to the Wall Street Journal.
Li Lu, who was a student leader during the 1989 Tiananmen Square protests in Beijing, is the first person to be identified to potentially replace the soon to be 80-year-old Buffett, in what the WSJ story said is “among the most high-profile succession stories in modern corporate history.”
Buffett told the WSJ his retirement plans are not imminent and his job would likely be split after he leaves the company into separate CEO and investing functions. The WSJ story revealed David Sokol, the current chairman of Berkshire unit MidAmerican Energy Holdings, is considered the top contender for Buffett’s CEO role, while Li would potentially serve as one of Berkshire’s top fund managers.
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Recently Facebook founder and CEO Mark Zuckerberg told ABC News’s Diane Sawyer he would only consider an IPO “when it makes sense,” but now Bloomberg, “citing three people familiar with the matter,” reports that may not be until 2012.
The postponement would give Zuckerberg more time to increase users – Facebook just surpassed the 500 million mark – and boost sales which could double to at least $1.4 billion in 2010, according to the sources quoted by Bloomberg.
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After dragging out the drama for months, the Walt Disney Co. has finally agreed to sell its stake in Miramax film studio for more than $660 million to Filmyard Holdings LLC, according to Reuters.
The sale includes rights in more than 700 movie titles, including Academy Award winners such as “Chicago,” and “Shakespeare in Love,” Disney told Reuters.
“It turns the page on Disney’s foray into non-Disney branded films and completes their focus on franchise properties,” Gabelli & Co analyst Chris Marangi told Reuters.
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After Tomkins shareholder Standard Life last week objected to a buyout attempt for the UK autoparts maker by a joint bid orchestrated by U.S. private equity firm Onex and the Canada Pension Plan, ratings agencies Standard & Poor’s and Moody’s have put Tomkins on credit watch.
The ratings agencies are apparently concerned by the amount of debt involved in the $4.4-billion take-private bid, which was backed by the Tomkins board earlier this week.