Tell It To Al

SeaWorld rode the waves with an  initial public stock offering on Friday that soared about 25% in it’s first day of trading.

One of the lead underwriters was none other than Goldman Sachs, also known as the great vampire squid. Goldman is also going to redeem some of the debt instruments it has issued SeaWorld as part of the deal.

Buyout firm Blackstone Group purchased SeaWorld from Anheuser Busch in 2009, flooding the theme park operator with debt. Friday’s IPO valued the company at $2.5 billion and the company has $1.8 billion in long-term debt.

Investors looked beyond the bloated balance sheet, though, lured by a promised 3% annual dividend.

Click here to read my column in The Sunday Wall Street Journal. And click here to watch me talk about this and other stories with Will Ripley of Denver’s NBC affiliate, 9News.

Goldman Sach’s former trader Matthew Marshall trader barely ranks as a footnote in the annals of rogue trading.

He admitted that in December 2007, he hid an $8.3 billion futures position from his supervisors that resulted in a $118.4 million loss. That’s lunch money compared to  Kweku Adoboli who lost $2.3 billion at UBS AG  in 2011 or Nick Leeson who brought down the 233-year-old Barings Bank with a 830 million pound loss in 1995.

It would be barely a rounding error in the $6 billion lost by the “London Whale” at J.P. Morgan Chase.

Rogue traders losing large sums of money crop up from time to time. There’s just something about the pressures of the job that cause some traders to go rogue.

Click here to read my column on MarketWatch.

Warren Buffett is perhaps America’s most beloved billionaire, affectionately called the Oracle of Omaha.

Goldman Sachs is perhaps America’s most despised investment bank, famously nicknamed the “Great Vampire Squid.”

Last week, Goldman CEO Lloyd Blankfein and Mr. Buffett announced a deal that will make Mr. Buffett’s Berkshire Hathaway one of the top 10 holders of Goldman.

What remains to be seen is whether Mr.Buffett will put a halo on Goldman or whether Goldman puts horns and a tail on him.

Click here to read my column in The Sunday Wall Street Journal. Click here to watch me talk about it with Will Ripley of Denver’s NBC affliate, 9News.

Here’s a sign the market is nearing its peak: A unknown  company can do an initial public offering with not even saying what it will do with the money.

A Denver-based company called H2 Financial has just  completed a $153 million in what is known as a “blank check offering.” Yes, investors gave them a blank check to do just whatever. The company – which isn’t really an operating company – says it’s going to use the money to buy a company. What kind of company? Where?

Sometimes all it take to blow up a company is a boss with an enormous ego who refuses to listen to anything other than his own insulated mind.

This is largely what caused the meltdown of MF Global, a $40 billion commodities trading and investment firm run into the ground by Jon Corzine, the former Goldman Sachs chairman, Democractic U.S. Senator and New Jersey governor, according to a report released by Republican members of the House financial services committee.

Of course, there’s no law against having a ridiculously sized ego, and the report stops short of assigning any sort of criminal liability.

Click here to read my column in the Sunday Wall Street Journal. And click here to download the full report from the commitee.

It’s never a good sign when a company adopts a “poison pill” plan to fend off a corporate raider.

Netflix’ recent move to thwart Carl Icahn only exposes it’s desparation after a series of missteps that sent it’s stock tumbling.

Click here to read my column in The Sunday Wall Street Journal.

Salon.com is out with a fascinating piece that suggests “sometimes being mad is a good thing.”

Click here to read, “How Psychopaths Take Over.” It claims psychos “are more common than you might think in big business. The reason we don’t hear more about them is because they’re relentlessly, ruthlessly successful, and terrorize those around them into blind, untrammeled obedience.”

Sound like your boss?

Remains me of a piece I wrote earlier this year for The Sunday Wall Street Journal headlined “Pyschos On Wall Street.” Click here to read that. Some huge percentage of the people running our biggest companies and handling our money are complete psychos. How else do you explain the never-ending parade of scandals and crises?

Unlike the suggestion in the Salon piece, I don’t think it’s a good thing. The author seems to be unable to come to honest terms with the fact that his father is a psycho. He casts him in heroic terms and advises:

“Tone up that psychopath muscle by having one day a week when you leave Mr. Nice Guy at home. Give up feeling bad about feeling bad. If it’s up for grabs, grab it.”

Yeah, go ahead, be a self-aggrandizing jerk. That advice will get a lot of hits on a website.

When it comes to protecting your income from taxes, there is no better way than to become a highly compensated private equity fund manager.

Not only do they take most of their income as capital gains in a perfectly legal way, but they’ve also got a trick to take their remaining income at a lower tax rate as well. It’s a bit of a grey area, of course. New York Attorney General Eric Schneiderman is investigating if this trick is legal.

Click here to read my column in The Sunday Wall Street Journal.

For a clear primer on how financial markets really work, check out the the Visual Guide to Financial Markets by David Wilson.

Mr. Wilson is a familiar voice on Bloomberg Radio, delivering hourly stock reports in his jovial but straight-forward muse. He’s also the guy who puts together Bloomberg’s enlightening “Chart of the day” column.

His book is guide for financial professionals and students alike, explaining everything from the Byzantine world of derivatives to the basic lessons people running some of the biggest banks in the world seem to forget, such as the tradeoff between returns and risks.

“Investors who pay too much attention to the returns can end up suffering unexpected losses when a change in market direction highlights the risks,” writes Mr. Wilson.

And, oh, how the risks get highlighted. Just ask the London Whale at JP Morgan Chase or Jon Corzine at MF Global. The financial world would be a safer, smarter place if the people in charge of our money kept this book on their desks.

The people who make the big money on Wall Street are corporate insiders – at least as long as they don’t get busted.

Today’s news brings yet another insider trading case. This time it’s a Bristol-Myers executive allegedly buying up stocks of little drug companies he knew Bristol-Myers would purchase. Click here to read the details.

One thing the Justice Department and the Securities and Exchange Commission seems to have done well since the 2008 financial crisis is nail people for insider trading, including a top guy at Goldman Sachs and a lauded hedge fund manager. Their cases, however, probably only represent a tiny slice of what has become a huge industry trafficking in insider information.

From professionals who cheat to computers that make trades nobody understands, the little guy has about as much of a shot on Wall Street as he does in Las Vegas. At least in Las Vegas, they serve food and drinks while they shake you down.