Parisian Family Office, CEO. Began Wall Street, 82. Founded investment firm, CHIPPEWA PARTNERS, Native American Advisors. Member, White Earth Chippewa Tribe. Was NYSE/FINRA arb. Conservative, raised on Native reservations. Pureblood, clot-shot free. In a world elevated on a tech-driven dopamine binge, Dean trades from Ghost Ranch, on the Yellowstone River in MT, TN farm, Pamelot or CASA TULE', his winter camp in Los Cabos, Mexico. Always been, will always be, an optimist. Chase your dreams!
Thursday, March 31, 2011
Buffett Misses Chance to Show Moral Courage
What were they thinking? How could Warren Buffett excuse David Sokol’s trading in Lubrizol Corp. (LZ) stock while Sokol was pitching the company to Berkshire Hathaway Inc. (BRK/A) as an acquisition candidate?
Buffett and Sokol both say that nothing “unlawful” was going on (Sokol even went so far as to tell CNBC he did nothing inappropriate). Their explanation is that, because a deal with Lubrizol hadn’t actually been struck and wasn’t likely when Sokol bought his shares, it was all right for Sokol to profit from his knowledge of a possible deal.
On Wall Street, we call this kind of trading front-running, and everybody knows that it is wrong. People get fired for doing it. Sokol said that he is leaving Berkshire to pursue other business interests, and the timing is linked to Berkshire’s April 30 annual shareholder meeting, which is attended by tens of thousands of people. That’s probably true, in a sense. Buffett must want this mess cleared up and out of the way before he has to take questions from shareholders.
Buffett gave out a few facts in his press release yesterday, but the Schedule 14A filed with the Securities and Exchange Commission by Lubrizol fills in the damning pieces. After deciding to pursue Lubrizol as an acquisition candidate for Berkshire in the fall of 2010, Sokol tried to buy 50,000 shares on Dec. 13, the day he presented Berkshire’s possible interest to Citigroup Inc. and asked it to set up a meeting with Lubrizol’s management. He was able to acquire only 2,300 shares, and sold them a week later.
On Jan. 5, the day before Lubrizol’s management held a special meeting to discuss a possible sale to Berkshire, Sokol began to buy stock again. The following day, Lubrizol hired Evercore Partners Inc. (EVR) as its banker to respond to the potential interest of Berkshire. By Jan. 7, Sokol had purchased 96,400 out of a targeted 100,000 Lubrizol shares.
It strains credulity to claim these dates were coincidental and that Sokol had only a 5 percent belief (as he has stated) that Berkshire would buy Lubrizol. Sokol covered his bases by casually mentioning to Buffett that he owned stock when he pitched the acquisition in December. He gave no details and apparently kept quiet for almost three months, until after the Berkshire board had sealed the deal on March 13.
When Berkshire announced it was buying Lubrizol, the stock soared and Sokol pocketed a $3 million profit. It’s a large sum, but Sokol is a very rich man already, and it looks like he fell into the classic trap of the rich and powerful, who so often blow their reputation over trivia.
Misleading by Omission
With hindsight, Lubrizol’s SEC filing may be misleading by omission -- inadvertently so. Nowhere is Sokol’s financial interest mentioned in the catalog of events leading up to the deal. The relevant section of the filing says, in short, that neither Berkshire nor any of its subsidiaries (other than its externally managed pension funds) directly or indirectly owned a material amount of Lubrizol stock within the past three years.
Sokol may not technically fit into the definitions of this section, but it highlights the importance of disclosing positions in acquired stock by interested parties who could profit from the deal and that are material. In this light, you have to wonder what Lubrizol management thinks today about its dealings with Sokol.
Not surprisingly, according to the Financial Times, the SEC is now beginning an investigation. Presumably, it will look into whether there are similar patterns of trading in advance of other acquisition pitches by Sokol to Berkshire, whether consummated or not. One specific transaction that has piqued the curiosity of onlookers for months is Sokol’s purchases of shares of Middleburg Financial Corp. (MBRG) since 2010. And even if the SEC concludes that Sokol did nothing illegal, the known facts suggest that what Sokol did was wrong.
In substance, when Sokol pitched the deal to Buffett, he was holding stock in Lubrizol that had the equivalent of free lottery tickets attached. These 96,400 lottery tickets gave Sokol unfair odds -- odds far better than in the kind of lottery the general public gets to play.
It would be inexcusable for the chief executive officer of Berkshire Hathaway to front-run a potential acquisition this way. Why then, couldn’t the CEO of Berkshire admit it is inexcusable for one of his own senior managers to do so? Instead of condemning Sokol, Buffett gave him a pat on the back on the way out the door. Since when is it enough to merely uphold the letter of the law, especially at Berkshire? Whatever happened to Buffett’s famous saying, “Lose money and I will forgive you, but lose even a shred of reputation and I will be ruthless”?
It’s too bad that Buffett missed an opportunity to show moral courage, stand up for principle, reinforce to his employees what he expects from them, and, not least of all, to live up to his own public reputation.
Editor’s note: Alice Schroeder has been subpoenaed by Berkshire subsidiary NetJets seeking confidential information related to her news sources for other publications. The matter is being heard in Connecticut state court.
Tuesday, March 29, 2011
The only thing missing from Obama's speech last night was an apology to former President Bush for maligning the actions "W" took in Iraq. It is exactly what the Teleprompter-in-Chief is doing in Libya.
It is hilarious to see Soetoro forced to adopt the Bush Doctrine by Sarkozy but not seek Congressional approval as the "war criminal" Bush did. Soetoro, our national disgrace, continues to embarass all Americans with his blatant deceptions.
By the way, Obama has now launched more cruise missiles than any other Nobel Peace prize winner in history. At least his speeches are shovel-ready!
Monday, March 28, 2011
In a speech given in New Delhi, the chairman of Berkshire Hathaway warned investors to avoid "long-term fixed-dollar investments" such as 10-year U.S. Treasury bonds. Buffett worries that the $2.3 trillion in new money our government has pumped into the economy, when combined with interest rates so low they're practically giving money away, are combining to dilute the value of the dollar. As a result, Buffett warns: "If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not."
Friday, March 18, 2011
Wednesday, March 16, 2011
Tuesday, March 15, 2011
Sunday, March 13, 2011
The Anonymous manifesto:
We are a decentralized non-violent resistance movement, which seeks to restore the rule of law and fight back against the organized criminal class.
One-tenth of one percent of the population has consolidated wealth in unprecedented fashion and launched an all-out economic war against 99.9% of the population.
We are not affiliated with either wing of the two-party oligarchy. We seek an end to the corrupted two-party system by ending the campaign finance and lobbying racket.
Above all, we aim to break up the global banking cartel centered at the Federal Reserve, International Monetary Fund, Bank of International Settlement and World Bank.
We demand that the primary dealers within the Federal Reserve banking system be broken up and held accountable for rigging markets and destroying the global economy, effective immediately.
As a first sign of good faith we demand Ben Bernanke step down as Federal Reserve chairman.
Until our demands are met and a rule of law is restored, we will engage in a relentless campaign of non-violent, peaceful, civil disobedience.
In our next communication we will announce Operation Empire State Rebellion.
رفت سایه پیدا نیست نقش دیوار و چشم خیره ما نقش سایه دگر نمی دان نور اگر رفت سایه پیدا نیست نقش دیوار و چشم خیره ما
گر رفت سایه پیدا نیست نقش دیوار و چشم خیره ما نقش
سایه دگر نمی دان نور اگر رفت سایه. ر رفت
سایه پیدا نیست نقش دیوار و چشم خیره ما نقش سایه دگر نمی دان نور اگر رفت سایه پیدا نیست نقش دیوار و چشم خیره ما
I’ll let you know if I hear anything else…
Monday, March 07, 2011
2. The Washington Post is read by people who think they run the country.
3. The New York Times is read by people who think they should run the country and who are very good at crossword puzzles.
4. USA Today is read by people who think they ought to run the country but don't really understand The New York Times. They do, however, like their statistics shown in pie charts.
5. The Los Angeles Times is read by people who wouldn't mind running the country, if they could find the time -- and if they didn't have to leave Southern California to do it.
6. The Boston Globe is read by people whose parents used to run the country and did a poor job of it, thank you very much.
7. The New York Post is read by people who don't care who is running the country as long as they do something really scandalous, preferably while intoxicated.
8. The Miami Herald is read by people who are running another country, but need the baseball scores.
9. The St. Louis Post-Dispatch is read by people who want only the score of the Cardinals game. They drink Budweiser, Budweiser, and wait a minute-- -what was the question?
10. The San Francisco Chronicle is read by people who aren't sure if there is a country or that anyone is running it; but if so, they oppose all that they stand for. There are occasional exceptions if the leaders are handicapped minority feminist atheist dwarfs who also happen to be illegal aliens from any other country or galaxy, provided of course, that they are not Republicans.
11. The National Enquirer is read by people trapped in line at the grocery store.
12. The Seattle Times is read by people who have recently caught a fish and need something to wrap it in.
Sunday, March 06, 2011
The President ordered his cabinet to cut $100 million from the $3.5 trillion federal budget.
I'm so impressed by this sacrifice that I have decided to do the same thing with my personal budget. I spend about $2000 a month on groceries, household expenses, medicine, utilities, etc, but it's time to get out the budget cutting ax, go line by line through my expenses, and cut back!
I'm going to cut my spending at exactly the same ratio - 1/35,000 of my total budget. After doing the math, it looks like instead of spending $2000 a month; I'm going to have to cut that number by six cents! And, by God, I’m going to do it!
Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about. I'll just have to do without some things, that are, quite frankly, luxuries.
(Did the president actually think that no one would do the math on this B.S.?)
Signed, BOB YOUNG
Wednesday, March 02, 2011
Although the demand for precious metal coins remains high, the increase in supply of planchets—coupled with a lower demand for bullion orders in August and September—allowed the United States Mint to meet public demand and shift some capacity to produce numismatic versions of the American Eagle One Ounce Silver Proof Coin. However, because of the continued demand for American Eagle Silver Bullion Coins, 2010-dated American Eagle Silver Uncirculated Coins will not be produced.
The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.