Somali pirates are in command of a Saudi supertanker in the Indian Ocean after staging their most daring hijacking yet off the coast of Kenya.
The Sirius Star, owned by the Saudi company Aramco, is the largest ship ever taken by the pirates, and can carry a cargo of crude oil worth more than $100 million.
As pirates have become better armed and equipped, they have sailed farther out to sea in search of bigger targets, including the oil tankers, among the 20,000 tankers, freighters and merchant vessels passing through the Gulf of Aden each year.
Attacks have increased by more than 75 per cent this year.
With many attacks ending with million-dollar payouts, piracy is considered the most lucrative work in Somalia. Pirates rarely hurt their hostages, instead holding out for a huge payday.
The strategy has been effective: a report last month by a London-based think-tank said pirates have raked in up to $30 million in ransoms this year alone.
Everyone who is anyone in the art world was in London last week for a series of sales and fairs.
The trouble is, too many collectors left their checkbook behind in the clearest sign yet that the global financial crisis has finally caught up with the art world. Experts warn that things are likely to get tougher.
A far bigger test for a market which had largely defied the gravity of economic gloom comes next month, when Sotheby’s and Christie’s, the two dominant auction houses, hold major sales in New York. The Art Basel Miami Beach show follows in December.
“Now is not a brilliant time to be selling — people are facing such a complicated financial situation they are not prepared to do anything,” said Philip Hoffman, chief executive of the Fine Art Fund Group.
“The market place is much tougher, and in light of what’s happened in the financial markets, the art market cannot be immune to it. Liquidity is tighter everywhere.”
I think Sotheby’s and Christie’s will undoubtbly be effected by the Down Economy.
But like anything, if the price is right, now is the time to be buying.
The Rest is Up to You…
Michael Porfirio Mason
AKA The Peoples Champ
AKA Your favorite International Playboy’s, favorite International Playboy
The Guide to Getting More out of Life
http://www.thegmanifesto.com
You’ve touched on the core of what is the reason for the financial collapse over the past few weeks.
The sad thing is, most people watching their CNNs and MSNBCs have no idea why they’re losing their shirt and will be led like chickens to the slaughter in the next few months. It will only get worse.
To explain what’s going down, let me first drop a bit of economic background. All around the world, banks must comply with what are known as Basel regulations. These regulations determine how much capital a bank has to have in reserve. The amount of reserve a bank needs depends on the quality of the loans on its books. The more risky your loans on books, the more capital you need.
What AIG (the main company to blame) did, was to get around these Basel rules by issuing out unregulated insurance contracts, known as credit default swaps, that didn’t require ANY collateral or real capital to back it up. I’ll get back to all this.
Here’s how the hustle worked. Say you’re a heistman (wall st. bank) that had a lot of extra goods (deposits) lying around. You’ve got some nice jewelry in the stash and figure that you could earn some extra cash if you were to rent it out and have someone else temporarily hold on to them. There are some broke folks (subprime borrowers) a few blocks down the street that are trying to look hood rich and will pay you damn near all of their disposable income to wear your bling. The only problem is, you don’t really trust these broke folks. And even if you did trust them, you’d only loan out about 1/3 of your stash (total deposits) to make sure you had enough of the stash in your house (capital reserves) just in case things fucked up.
One day the nighborhood boss (AIG) comes to you with a proposition. His lieutenants (mortgage companies) have been selling weed, DVDs, fake Louis Vitton bags to the broke folks for years. He’s almost always gotten his money back. He trusts that they will pay him back, because he’s got their respect and he knows their history.
The neighborhood boss (AIG) proposes that HE rents out your jewelry to the broke neighborhood folks. In fact, since you don’t really trust his people, what he’ll do is he’ll back up his word with an IOU (CREDIT DEFAULT SWAPS!!!) for just 2% of however much jewelry you want to loan out. If anyone in the neighborhood doesn’t pay the boss back, he’ll cover your entire losses out of his own pocket if you’ve got the IOU.
Now you’re loving this shit! You can earn the high rent (interest rate) by loaning out your jewelry (deposits) to the broke neighborhood folks (subprime borrowers), but you’re being backed by the neighborhood boss’s (AIG) IOUs (credit default swaps). You DEFINITELY trust the neighborhood boss because he’s old school from the days of Freeway Ricky Ross and has seen them all come and go. He’s got a solid rep.
In fact, you trust the boss so much, that you’re gonna loan out 95% of your stash. You KNOW he’s good for the payback, so why not make rent on as much of your stash as possible?
Well after a few months it turns out the neighborhood folks didn’t really have enough money to pay the rent for the bling. Between food, heat, bills, they just didn’t have the cash to keep up the hood rich lifestyle. And they all engraved their names on your jewelry so you can’t just take the jewelry back.
You’re pretty pissed about how that went down, but you’re not too worried yet. Remember that the neighborhood boss (AIG) sold you some IOUs just in case, so you plan on getting you’re money back.
Well as it turns out, you weren’t the only heistman (bank) the neighborhood boss was dealing with. He was doing business with hundreds of heistman across the country and giving out IOUs. The only problem was he didn’t have enough cash to back up all of these IOUs.
Now all the heistman are coming at the neighborhood boss with guns blazing AT THE SAME TIME asking for their goods back, but the boss doesn’t have nearly enough. He thought everyone would have paid him rent on time so he could keep up the hustle, but it didn’t turn out like that. Shit is about to get real ugly.
The local mayor (US gov’t) sees that a major war is about to break out in his neighborhood that’s going to take lives. If this war goes down, most of the heistman are going to get shot, the neighborhood boss DEFINITELY will get shot, and a lot of the neighborhood folks will get shot in the cross fire.
To ease the situation for a while, the mayor says he’ll pay off the heistmen and the neighborhood boss with some money he’ll raise by doubling property taxes next year.
At first the heistmen are cool with this proposal. Everybody stays alive, for now.
But then they start to wonder, how will they survive next year when the neighborhood folks have no money to rob?”
The Rest is Up to You…
Michael Porfirio Mason
AKA The Peoples Champ
AKA Your favorite International Playboy’s, favorite International Playboy
The Guide to Getting More out of Life
http://www.thegmanifesto.com
Most men are born timid, chances are — you were too. Most societies across the world today have promoted a culture of political correctness, conflict aversion, trend following, and a desire to be liked by all. And this isn’t entirely a bad thing. Going down this path will get you an OK house in the suburbs with a plain wife, 2.5 kids, and a dog named Spot. If this is a lifestyle you desire, stop reading now. For my real and aspiring G’s, please continue…
Bold Men Have Wills of Steel
One of my favorite UFC Fighters when I had time to watch TV was Tito Ortiz. The guy was a beast unleashed and if you had the misfortune of getting in his way when he was on a rampage, you were going to pay. He had a quote, which I try to live by that says: “RESPECT: I don’t earn it; I just fuckin take it!” But even as much as I admired the rawness of this cat, there’s another lesser known UFC Fighter who was a true man of boldness. Lee Murray. Let that name marinate for a bit.
Back in 2002, outside a London nightclub, Tito and Lee exchanged words, which eventually led to blows. Tito let out a left-right combo which both missed Lee. Lee then followed up with a 5 punch combo that knocked Tito the fuck out. COLD.
If that was the end of the story, he’d be an interesting side note in UFC history. But its what Lee did after which really impressed me with the strength of this man’s character (whether you agree with the DIRECTION of his character is another matter altogether).
In 2006, Lee was the alleged (ha! I love this word) mastermind behind the 53 million Pound CASH robbery from a British bank (about $100M US). He then fled to Morocco, which coincidentally(?) has no extradition treaty with England. The British gov’t has been coming after Lee since the robbery, but the Moroccan gov’t has steadily refused to give up Mr. Murray. (Side note: There are two women I have ever met that have given me the “Thunderbolt”, one was Moroccan.)
Lesson: I’m not recommending anyone going out and pull heists. Most people who try this would probably drop the ball and end up behind in the back seat of a squad car. What I DO recommend is that you find where you have an edge and adopt a mentality with an will of steel that was required for Lee to pull off what’s he’s done…while he was STILL in his 20’s. You have to have an unbendable vision of what you want, and anyone that stands in your way has to be dealt with accordingly.
Caution: Boldness without planning, boldness without information is leveraged stupidity. Do NOT do this. This is like doubling down when you have no edge. You will lose. Notice that Lee had a well executed after plan. Unlike many of the smash and grab low level criminals you find in major cities, he didn’t go back to his apartment or his mom’s house. He got out the country and went to a non-extradition country.
To win at chess, you have to see several moves ahead and anticipate your opponent’s move. If you don’t have the wisdom, the time, the STRENGTH OF WILL, and/or the balls to do this, stick to Checkers.
In 1925, 5 highly successful scrap metal dealers in France were invited to an official and highly confidential meeting with the “Deputy Director General of the Ministry of Post and Telegraphs” at the Hotel Crillon, then the most luxurious hotel in Paris. (Imagine this). The men had NO idea why they were invited and were overwhelmed with curiosity. Eventually, the director stepped into the room and addressed the men. He told the men that the French Government had decided to tear down the Eiffel Tower . Maintenance costs were too high, the gov’t was in debt and simply wouldn’t put up the money to upkeep it. At the time (this was in the 1920’s) Parisians thought the tower was a boondoggle, and eyesore, so this plan made sense at the time. The dealers saw this as a golden opportunity and saw they could make a killing selling the scrap metal on the open market.
The director invited all five men to propose bids on the project. Each of the 5 put in high bids hoping they would be the one to edge out the others and get this lucrative contract. After all the bids came in, it turns out Mr. P, one of the 5 dealers had the highest bid. He was invited to come back to the hotel with a certified check for 250,000 francs (about $1M today) to make a 25% downpayment on the total deal. After the deal was wrapped up, Mr. P waited, and waited….and waited to hear back from the director. He never heard back from him again. It turns out there was no such position as a “Deputy Director General of the Ministry of Post and Telegraphs” and that the government had no plans to tear down the Eiffel Tower!!
Lesson: The Director’s, real name, Count Victor Lustig, was a con artist extraordinaire, and he won big because he thought big. He had the BALLS to have a vision so extraordinary, that no one ever thought to question it. He even played the role of a government official to a T, having the creativity to even ask the winner of the bid for a small bribe to establish believability. Great men of history see beyond what others think impossible. Could you sell the Eiffel Tower?
Even as midprice hotels began losing business this past summer, luxury hotels continued to fill their rooms. Companies treated the hotels as perks for top executives and quality locations for high-level business meetings. And many leisure travelers considered a stay at a top hotel - even for a couple of days - to be worth the cost.
Times have changed.
Since mid-September, almost in parallel with the stock market turmoil, demand for high-end hotel rooms has plummeted. Patrick Ford, president of Lodging Econometrics, said that U.S. luxury hotel-room revenue rates “slowed in mid-September and really ratcheted downward during October.”
Revenue per available room, the standard measure of performance, dropped 14 percent at upscale and luxury hotels in the week ending Oct. 18 over the comparable week last year, according to Smith Travel Research. For hotels in general, the decline was about 8 percent.
I was at the Bellagio in Las Vegas for the first time last week (I typically stay at Wynn or THE HOTEL). I had to say there because I was invited to a meeting of Democratic heavyweights there. Bill Maher guest speaker. Chilled with Maher a Spearmint Rhino for a little too.
Bottom rooms were like $159 a night (of course I didn’t stay in the “bottom room” and it was pro-bono, but that is neither Google Stock nor Body Rock).
Super cheap. Motel-like prices.
The Rest is Up to You…
Michael Porfirio Mason
AKA The Peoples Champ
AKA Your favorite International Playboy’s, favorite International Playboy
The Guide to Getting More out of Life
http://www.thegmanifesto.com
We asked Anda Rowland, owner of Anderson & Sheppard, which recently celebrated its 100th anniversary, what the outlook is for the Row’s traditional tailoring firms.
“We are still getting new customers and many enquiries, but it has to be said that London is not really in the mood to spend and people are traveling [to London] less,” Rowland tells Luxist. “Luckily, despite the turn away from ‘bling’ spending, there has been a renewed interest in goods that have an underlying value, which is perceived as more solid and easier to understand and to explain to the customer. There is a shift from the ‘Because I’m worth it’ attitude towards one questioning ‘Was it worth it?’”
Asked about the influx of money from emerging markets, “Speaking for Anderson & Sheppard, we have not seen a growth in customers from Russia or from the UAE,” she replies. “We have had more press interest, but it has not filtered through to visits yet. China and India are growing markets [for us] due, perhaps, to a historical familiarity with the history and tradition of Savile Row.” As for the future, “I have heard from the other tailors that they believe that their trips abroad will be more and more important over the next couple of years,” Rowland says. “They feel that customers will be traveling far less and that overseas service will help them to keep the workshops busy and running efficiently.”
Summing up, Rowland, who inherited the business a few years back from her father, is optimistic. “As a relative newcomer to this industry where most houses are at least 100 years old, I am reassured by the reaction of most tailors who say that their firms have seen it all several times before,” she tells us. “I can imagine that for many of the big designer brands that are much younger, it is harder to be as quietly confident as we are on Savile Row.”
With the falling pound, it is time to pick up some more Savile Row Suits.
Worth their weight in Gold in a Down Economy. A flight to quality if you will.
The Rest is Up to You…
Michael Porfirio Mason
AKA The Peoples Champ
AKA Your favorite International Playboy’s, favorite International Playboy
The Guide to Getting More out of Life
http://www.thegmanifesto.com
Police in Milan are investigating an unusual $1m (£628,420) robbery in the heart of the Italian fashion capital.
It was, said the victim, “a masterpiece of its kind”. It was certainly daring - in broad daylight and on one of Milan’s swankiest shopping streets.
Staff at Pederzani’s, one of the city’s exclusive jewellers, thought nothing amiss when a window cleaner went to work on the plate glass display.
Dressed in regulation overalls, he propped his ladder against the window.
But then, instead of using the bucket and squeegee to clean it, he calmly unscrewed it before scooping an estimated $1m-worth of jewels into his bucket and walking off into the Friday shopping crowd.
This is not the first audacious crime to hit Milan’s fashion district this year.
Michael Porfirio Mason
AKA The Peoples Champ
AKA Your favorite International Playboy’s, favorite International Playboy
The Guide to Getting More out of Life
http://www.thegmanifesto.com
Mexican law enforcement agents have captured Eduardo Arellano Felix, a suspected leader of the brutal, Baja California-based drug cartel responsible for smuggling large amounts of cocaine, marijuana, and methamphetamine to the United States.
The DEA also confirmed Arellano’s, nicknamed El Doctor, detention. It is the latest in a series of arrests in recent years that has weakened the organization. As the cartel has lost its grip on the lucrative drug-smuggling routes into the United States, a deadly battle for control of the Tijuana region has ensued.
Eduardo Arellano’s arrest follows that of his three brothers, Benjamin, Francisco Rafael and Francisco Javier, and the death of a fourth, Ramon, who was killed in a 2002 shootout with Mexican police in the state of Sinaloa.
A nephew, Fernando Sanchez Arellano, has been said to be in charge of the group’s day-to-day operations. But Sanchez has been challenged by a former crew leader, Eduardo Garcia Simental, known as El Teo, and their battle has claimed the lives of close to 150 people in Tijuana in the past month.
Michael Porfirio Mason
AKA The Peoples Champ
AKA Your favorite International Playboy’s, favorite International Playboy
The Guide to Getting More out of Life
http://www.thegmanifesto.com
The first time I sensed the alarming change in my soul was when I caught myself, five minutes after the market open, reaching for a reefer.
Trust me, I didn’t amass legacy wealth (underestimated by Forbes magazine in the high eight figures) by smoking weed during trading hours. Exhaling that first hit I thought and might even have moaned aloud: “Whoa, dude! Why are you even running a hedge fund?” The markets were collapsing, and so was my passion.
Bloomberg subscribers have come to know me as a seriously successful hedge-fund manager who tries to serve society in more ways than one. Not only have I made as much money as possible, and proven the natural inferiority of the little rich-kid idiots from Harvard and Yale who went to work for Lehman Brothers Holdings Inc. I have also freely shared my thoughts and opinions with you.
As the trading room filled with smoke, and acquired that only sweet smell I know that is not success, I realized it was time for me to share more. To go deeper. I needed to re-examine honestly who I was, and why.
What could possibly have caused me to doubt my own value? I cannot say. But with my lungs stretching to the bursting point I felt a sudden urge to make the argument for shorting myself. I looked for weaknesses. I found three:
Misplaced Trust
1) I trusted America to do the right thing.
My fund may be an offshore entity, but I trade in U.S. markets. When they move from “God Bless America” to “Take Me Out to the Ballgame” at Yankee Stadium, I keep my hand over my heart. And I trusted my government to preserve one of man’s most basic rights: the right to short Morgan Stanley.
Six weeks ago I was right where I wanted to be: short not only Stanley but also Goldman Sachs Group Inc., in real size. Both were going to zero, and I was going to have another Merry Christmas. Then the Goldman alums at Treasury jump in and force the Securities and Exchange Commission to ban short selling.
The short squeeze forces me to buy back everything at prices that would make a Japanese investor blink. How did I feel? Imagine how it would feel to be Michael Jordan in mid-air, three feet above the rim with no one around you, when the ref blows the whistle. Dunking is now illegal, he says. The league fines you for trying to dunk; the media lambastes you for trying to dunk. Barney Frank subpoenas the dunkers.
I’m not saying I’m the Michael Jordan of hedge-fund managers. Others say that. I’m saying that for the first time in his career the Michael Jordan of hedge-fund managers feels like picking up his ball and going home. Which brings me to…
Love What You Do
2) I hate my job.
When people ask me what it’s been like making hundreds of millions of dollars for myself I always try to smile as if to say: “It’s no big deal. Some people are just built to win in the financial markets.”
The truth is nothing comes naturally in the financial markets. Winning is so much harder than you know. It comes with this huge opportunity cost: not winning at something else. For example, I think I could be one of the best ever at finding meaning in life. But I have to put that to one side, to help keep markets efficient. Don’t get me wrong. I’m not a whiner and I’m not a quitter. I’m not writing a letter to my investors to tell them why I’m too good for their money and my own Blackberry. No, I’m no Andrew Lahde. (Though he has a point about pot.) I’m just underutilized. Which leads me to…
