CRE datapoint du jour, Tishman Speyer edition

The crisis has not been kind to either the empire or the reputation of property developer Tishman Speyer. In August, the Wall Street Journal reported a partnership led by Tishman had been hurt by the downturn in office property, and was in "default on debt tied to one of the largest office portfolios in the Washington area":...

Care Dynamix Raises $7 Million

Care Dynamix, a provider of nationwide preventative health services like in-school vaccination programs, has raised $7 million from H.I.G. Ventures.

PRESS RELEASE

H.I.G. Ventures, LLC, the venture capital affiliate of H.I.G. Capital, today announced its $7 million growth capital investment in Care Dynamix (d/b/a FluBusters). Care Dynamix provides nationwide preventative healthcare services, including vaccination programs and wellness screenings for schools, government agencies, corporations, retail businesses, religious groups, unions and professional associations.

“Our equity investment in Care Dynamix comes at a time when we are seeing increased demand for these types of services in communities across the country in order to expand the reach of critical immunization programs and protocols, as well as aggressive, new medical developments that are fueling overall growth of the healthcare industry,” commented Craig Burson, Managing Director at H.I.G. Ventures. “The global attention to new outbreaks, such as the H1N1 flu virus, has accelerated the interest and demand of schools, government agencies, corporations, religious groups and professional associations in preventative healthcare. The H.I.G. team is excited to be working with a top provider of onsite health and wellness services as it further expands its geographic reach and service offering.”

“We have a unique opportunity around the country to establish onsite vaccination clinics or complement existing planned immunization clinics,” commented Jim Greiff, President of Care Dynamix. “With established partnerships with the National Parent Teacher Association and the National Association of Elementary School Principals, Care Dynamix will provide flu clinics at thousands of public and private U.S. schools and provide onsite healthcare services alongside programs sponsored by state and local governments. Our partnership with H.I.G Ventures is an important step in our expansion and ability to meet rising demand, while ensuring clients receive the same personalized service that has been the hallmark of our founder’s family practice.”

About Care Dynamix, Inc.
Founded in 2002, Care Dynamix is a leading provider of cost-efficient, high quality onsite vaccination clinics at U.S. companies, schools and retail locations of every size. Our vaccines and other preventative healthcare services are provided through a national network of licensed healthcare professionals. Care Dynamix is headquartered in Roswell, GA. For more information, visit www.flubusters.com.

About H.I.G. Ventures
H.I.G. Ventures partners with entrepreneurs to provide the capital, expertise and relationships necessary to build market-leading businesses. The fund’s investment strategies are supported by a growth equity team, focused on high growth companies in need of expansion capital, and a BioVentures team that concentrates on investments in biopharmaceutical, medical device and specialty pharmaceutical companies. With over $550 million in dedicated venture and growth capital under management, the firm’s two teams invest throughout North America in early to growth-stage information technology, healthcare, life science, media and service businesses. H.I.G. Ventures is the venture capital affiliate of H.I.G. Capital, a leading private equity investment firm with over $7.5 billion of capital under management, with offices in Atlanta, Boston, Miami, New York and San Francisco. For more information, visit www.higventures.com.

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Southlake Equity Back In The Fundraising Saddle

Southlake Equity Group has resumed raising its debut fund, after taking a hiatus to do a deal, beef up the team and find a placement agent. The Texas-based firm is again actively marketing a $250 million vehicle, Southlake Equity Group Fund I, with Neuberger Berman serving as placement agent.

The firm has held almost 100 meetings so far with potential backers, according to a source with knowledge of the situation. A second round of meetings will begin in September. Southlake Equity Group appears to be approaching about $100 million in commitments for a first close in the fall, and, if all goes well, said the source, a final closing could occur sometime in the first quarter of 2010.

Southlake Equity Group was formed in 2007 to buy lower-middle-market companies with enterprise values ranging from $20 million to $150 million in the South-Central region of the United States.

The firm had originally tried to raise a fund of $300 million to $400 million, had completed a PPM and had met with some funds of funds to discuss possible commitments. But after Tom Keene joined founding partners Todd Robichaux and Doug Wheat at the firm, several potential investors indicated they would like to see the three principals do a deal together. In June 2008, Southlake Equity Group completed its first acquisition with the purchase of PJ Trailers, a manufacturer and distributor of heavy-duty, open utility trailers.

In May 2009, David Spuria joined the firm as partner and general counsel. Spuria was formerly the general counsel of TPG Capital.

This story first appeared in Buyouts magazine (subscription required), where Nancy Gordon is a Senior Editor.

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Zero Hedge and the Ten Year Result

The Zero Hedge blog consumes much time and effort on the topic of the Federal Reserve and monetization of the debt. I have involved myself in several high level fracases with the folks who run that blog.

I had promised myself that I would not be controversial again regarding that site and would accept some of the good stuff which they write and excuse the bad.

The blog’s coverage of the 10 year note auction is just egregiously incorrect and demonstrates the collective lack of knowledge of the various authors on the daily ebb and flow of the bond market. Here is a line from that blog’s story on the result of the 10 year auction.

“Yields 3.510% vs. Exp. 3.350%, 16 bps miss in final High vs. Exp.”

John Jansen writing again. The author noted that the 3.51 percent stop was 16 basis point higher than the 3.35 expected result. The story’s headline notes an expected stop of 3.35 percent. When I first read that headline I excused it as a simple transposition of 3.53 and 3.35.

I am a typographical disaster and hesitate to seriously criticize anyone for that error. However, when you refer above to the first line I cut and pasted here which states ” 16 basis point miss in final High vs Exp” you realize that this was not a typographical error and that it exposes the author’s ignorance and inexperience on the topic.

The author would have known before he/ she composed that line that the WI 10 year note has traded all day in the upper 3.40s and low 3.50s and had not traded in the 3.30s since Friday morning before the labor report.

That blog has made wild charges regarding the Federal Reserve System. I believe that the authors know very little about the Federal Reserve or the moment to moment iterations of the Treasury market.

If they did it would have been impossible to make such an outrageous conclusion about the auction.

One must logically conclude that when they make such a fundamental factual error as they did today that they should not be trusted when making grandiose charges about the conduct of monetary policy.

The comments of the bloggers at that site look and feel authoritative. They write well and and present themselves on a glossy site. The only problem is that in this instance they have demonstrated a fundamental lack of experience, expertise, and erudition on a topic in which they claim to possess all of those traits.

I am sorry to spend so much time on this but I think it is important to address the issue.




Fed’s Beige Book

The Beige Book describes economic activity as stabilizing and an uptick from the July report that called ‘economic weakness moderating.’ With respect to overall activity, 5 districts saw signs of improvement, Dallas said activity has ‘firmed’, while 5 said things are stable or showing signs of stabilization. St. Louis said the pace of decline appeared to be moderating. Most said that their ‘business contacts remained cautiously positive.’ Most said retail sales were flat but CFC helped auto’s. ‘Most districts reported some improvement in residential RE markets but home price pressures remained. CRE demand ‘remained weak’ and commercial construction ‘continued to decline.’ ‘Most districts reported improvements in manufacturing.’ ‘Labor market conditions remained weak across all districts’ but 8 districts said staffing co’s had ’slight uptick in the demand for temp workers.’ Consumer prices were steady in most districts.


Talbot’s (TLB) falls on weak Q2 revenue

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TLB logoTalbot's (NYSE: TLB - option chain) stock is trading lower today after the company posted a Q2 loss of 0.45 per share, which came in better than analysts' expected 0.52 loss. However, revenues of $304M were lower than the $309M that was anticipated. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TLB.

This morning, TLB opened at $7.80. So far today the stock has hit a high of $7.81. As of 11:50, TLB is trading near the day's low at $6.84, down 27 cents (-3.8%). The chart for TLB looks bullish.

Continue reading Talbot's (TLB) falls on weak Q2 revenue

Talbot's (TLB) falls on weak Q2 revenue originally appeared on BloggingStocks on Wed, 09 Sep 2009 13:20:00 EST. Please see our terms for use of feeds.

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Maquarie Cuts Palm to Neutral

Macquarie research analyst Phil Cusick this morning cut his rating on Palm (PALM) to “Neutral” from “Outperform,” with a $15 price target, down from $20, and cut his estimates following the company’s announcement of a new Web OS-based device, the “Pixie,” which he thinks generally means lower prices for Palm’s devices, including the existing “Pre” handheld.

He thinks Palm, not partner Sprint (S), is bearing the brunt of today’s announced price cut for the Pre, and “This also will likely impact pricing on Pixi, which will need a retail price closer to US$50-80 vs the US$99 that we had expected.” Cusick cut his estimates for 2010 fiscal year profit to 4 cents from 29 cents, and for 2011 to 66 cents from $1.

Earlier, Credit Suisse analyst Deepak Sitarama cut his rating on the stock to “Neutral” along with reducing estimates.

Palm shares are down $1.15, or 8%, at $13.82.

HP on Why Giant Corporations Shouldn’t Do VC

Here in Park City, Utah, at the fall Venture Capital in Rockies conference, HP chief strategy and technology officer Shane Robison told venture investors that he’s glad the company is no longer doing much internal VC. But the $110 billion hardware, software and services giant still has dry powder for M&A, coming on the heels of a couple sizeable acquisitions of venture-backed companies.

The Palo Alto, Calif., company is particularly interested in companies developing technologies that tie in with HP R&D initiatives. But when asked whether HP has plans to launch an Intel Capital-type effort to make strategic venture investments, Robison says he sees scant likelihood of that occurring.

“We’ve had our own VC arm in the past and I actually stopped that myself because what I found was we sucked,” he says. “I don’t think big companies can have the inceptive structure in place to make it work well.” That said, Robison says he still sees opportunities for HP to make small investments in companies on occasion alongside established venture investors.

While HP is best known for swallowing giant corporations like Compaq and EDS, Robison says that small companies have a large role in the broader M&A strategy. “Though we are known for the big acquisitions, we do lots of smaller acquisitions,” he says, adding that the company “is evolving in how we want to work wit the VC community.”

“We tend to on the smaller acquisitions look or technologies that will fill a whole in our product roadmap. We tend to think of them as extensions of our R&D investments,” he says.

Robison adds: “Where we’re really interested is in the stuff you’d expect. Storage is a big issue, and we’re building out a lot in that space.” (Recent acquisitions of venture-funded companies - in the space include storage area networking company LeftHand Networks, acquired in October or $360 million, after previously raising $85 million in VC funding, and file system software developer IBRIX, which HP announced in July that it plans to acquire and which previously raised $42 million in VC.)

“Also, we’re looking at anything that’s really innovative in analytics, and helping people make sense of the data they have, as well as new tools or delivering services more efficiently, especially consumer services,” he says. “We’re also moving up the stack, and as we move up, we’re looking for more opportunities there.”

Other areas of interest he cited were next generation printing, user interfaces, sustainability, and cloud infrastructure and tools, with a focus less on hardware and more on software and services.

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MSFT: Just Get Through This Year

Briefing.com notes that Microsoft (MSFT) executives speaking at today’s Citigroup tech conference have remarked that their “renewal rates” for enterprise software this quarter are on track with expectations. The company also defended last quarter’s billion-dollar revenue miss, stating that the disappointing results were consistent with with the company’s warnings for months that the market was a tough one. According to Briefing, Microsoft’s outlook is to “get through this calendar year, and get the market share they can. Then next year, barring no meltdown, things should be looking up.”

Microsoft shares are up a penny at $24.83.

“Rethinking GDP”

Joseph Stiglitz says we need better measures of economic performance:

Rethink GDP fetish, by Joseph E. Stiglitz, Commentary, Project Syndicate: ...Eighteen months ago, French President Nicolas Sarkozy established an international Commission on the Measurement of Economic Performance and Social Progress, owing to his dissatisfaction - and that of many others - with the current state of statistical information about the economy... On Sept. 14, the commission will issue its long-awaited report.
The big question concerns whether GDP provides a good measure of living standards. In many cases, GDP statistics seem to suggest that the economy is doing far better than most citizens' own perceptions. Moreover, the focus on GDP creates conflicts: political leaders are told to maximize it, but citizens also demand that attention be paid to enhancing security, reducing pollution, and so forth - all of which might lower GDP growth.
The fact that GDP may be a poor measure of well-being, or even of market activity, has, of course, long been recognized. But changes in society and the economy may have heightened the problems...
For example,... in one key sector - government - we ... often measure the output simply by the inputs. If government spends more - even if inefficiently - output goes up. In the last 60 years, the share of government output in GDP has increased [substantially]... So what was a relatively minor problem has now become a major one.
Likewise, quality improvements ... account for much of the increase in GDP nowadays. But assessing quality improvements is difficult. ...
Another marked change in most societies is an increase in inequality. ... If a few bankers get much richer, average income can go up, even as most individuals' incomes are declining. So GDP per person statistics may not reflect what is happening to most citizens.
We use market prices to value goods and services. But ... the ... pre-crisis profits of banks - one-third of all corporate profits - appear to have been a mirage.
This realization casts a new light not only on our measures of performance, but also on the inferences we make. Before the crisis, when U.S. growth ... seemed so much stronger than that of Europe, many Europeans argued that Europe should adopt U.S.-style capitalism. Of course, anyone who wanted to could have seen American households' growing indebtedness, which would have gone a long way toward correcting the false impression of success given by the GDP statistic.
Recent methodological advances have enabled us to assess better what contributes to citizens' sense of well-being... These studies, for instance, verify and quantify what should be obvious: the loss of a job has a greater impact than can be accounted for just by the loss of income. They also demonstrate the importance of social connectedness.
Any good measure of how well we are doing must also take account of sustainability..., our national accounts need to reflect the depletion of natural resources and the degradation of our environment.
Statistical frameworks are intended to summarize what is going on in our complex society in a few easily interpretable numbers. It should have been obvious that one couldn't reduce everything to a single number, GDP. The report by the Commission on the Measurement of Economic Performance and Social Progress ... should ... provide guidance for creating a broader set of indicators that more accurately capture both well-being and sustainability...

UK Rates on Hold; JJB Sports Investigated

The Bank of England left its asset purchase program in place to aid the economic recovery and left its interest rate unchanged at 0.5%. JJB Sports and Sports Direct ar investigated by the fraud and competition authorities.

Economically, Democrats still don’t have a large enough majority in Congress

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Amid the lamentable health care reform debate, one fact is incontrovertible: despite President Barack Obama's large 2008 presidential election victory, one in which the Democrats gained 21 seats (to 257-178) in the House and eight seats in the Senate (59-40, not counting the late Senator Edward M. Kennedy's seat), the Democratic Party's majority still is not large enough to pass progressive legislation.

The solution to this is obvious enough: win more seats in the 2010 off-year congressional election, and then in the 2012 presidential/congressional election. And how does a majority party accomplish the above? By solving the nation's problems. These days, that means: 1) getting the U.S. economy growing again with robust job growth, 2) keeping the U.S. safe against international terrorism, and 3) ending the Iraq War successfully and making substantial progress toward victory in the Afghanistan War.

Continue reading Economically, Democrats still don't have a large enough majority in Congress

Economically, Democrats still don't have a large enough majority in Congress originally appeared on BloggingStocks on Wed, 09 Sep 2009 13:00:00 EST. Please see our terms for use of feeds.

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Vivendi calls up a deal in Brazil

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In the emerging markets, a key to growth is mobile. And, this is revving up M&A activity for the major operators, who are trying to grab marketshare.

This is certainly the case with Vivendi. Recently, the company's chief -- Jean-Bernard Levy -- said he has a credit line of close to $9 billion to do deals.

Well, he hasn't wasted much time. Late yesterday, Vivendi announced a buyout bid for GVT SA, which is a fixed-line phone company in Brazil. The transaction comes to about $3 billion (or a 16% premium to the current stock price).

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Vivendi calls up a deal in Brazil originally appeared on BloggingStocks on Wed, 09 Sep 2009 12:40:00 EST. Please see our terms for use of feeds.

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Ten Year Result

The result of the 10 year reopening was a stellar result from the vantage point of the taxpayers of America. The issue was offered freely in the market at a yield of more than 3.52 percent at 100PM but dealers paid through the market and the competitive bidding process produced a yield of 3.51 percent.

The bid to cover ratio was a strong 2.77 versus 2.63 in  the prior auction.

Indirect bidders took a robust 55.4 percent of the auction which analysts at CRT note is a record for a reopening.

Notwithstanding that. the market trades heavy and there are no reports of follow through buying.

The 2year/10 year spread is 256 basis    points versus 254 basis points at the open. The 10 year/30 year spread is 86 basis points versus 85 basis points at the open.

I still think that the yield curve steepens and the market outright cheapens. (That could be the first time in nearly two years of blogging that I produced a rhyme.)


What really drove gold this week?

Gold miner Barrick Gold said on Tuesday it would raise $3.5bn via a share offering to eliminate most of its remaining gold hedging contracts. While that might not mean much if you're not a gold focused investor, for gold bugs everywhere it means a lot. First, it leaves only one other gold miner, Anglo Ashanti,...

E*Trade Financial prepares for a changing of the guard

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E*Trade Financial Corp. (NASDAQ: ETFC) reported Wednesday morning that its chairman and CEO, Donald Layton, will step down at the end of the year. He will retain all of his current responsibilities through the end of 2009, by which time E*Trade hopes to have named a successor.

In a warm and fuzzy press release, Layton summed up his tenure at E*Trade: "It was an exciting but very challenging time as E*TRADE dealt successfully with the severe financial distress of the last two years. Now that our major recapitalization is complete and the online brokerage business is growing again, I have accomplished what was needed for me to end my time as CEO on schedule. I wish to thank everyone involved -- it was a great team effort."

Continue reading E*Trade Financial prepares for a changing of the guard

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Star Tudor trader Mark Hillery joins Brevan Howard

Mark Hillery - until last year the head of emerging markets at blue chip hedge fund Tudor Investment Management and one of the most senior traders at the firm - has joined London's Brevan Howard, the FT's hedge fund correspondent Sam Jones reports. Mr Hillery, long regarded as one of the best performing,...

Wednesday links: flaunting failure

A TRIN-based short-term buy signal.  (Small Fish, Big Odds)

What does a day with zero new lows imply for the stock market?  (Trader’s Narrative)

Newsletter writers have become less bullish as the market has rallied.  (MarketWatch)

The Canadian stock market may be the best of both worlds:  a developed market with emerging market exposure.  (Market Blog)

Another gold-backed ETF, ETFS Physical Swiss Gold Shares (SGOL),  joins the fray.  (IndexUniverse, WSJ)

Did Barrick Gold (ABX) just put the kibosh on the gold rally?  (Bespoke)

Gold bugs look at gold as a currency, but it is not one and unlikely to be one in our lifetime.”  (Contrarian Edge)

Hedge fund investors are now keenly focused on redemption terms.  (WSJ)

Hedge funds are, contrary to popular belief, not back.  (The Reformed Broker)

“Dissenters can give us the greatest gift of all: an open mind. This is the prerequisite for a flexible approach toward investing. As Thomas Dewar stated: “Minds are like parachutes. They only function when they are open.”  (Minyanville)

How poker is similar to investing.  (Wall St. Cheat Sheet)

Research shows the Halloween Effect is an industry effect.  (SSRN)

Oil tanker stocks have not tracked oil prices higher.  (The Money Game)

Ten ETFs that don’t exist, but should.  (ETF Database)

Checking out Google Trends for investing.  (Calculated Risk)

NYSE Euronext (NYX) attempts to bolster its options business by taking on partners.  (WSJ)

Kraft (KFT) should not raise its bid for Cadbury (CBY).  (Deal Journal also Breakingviews, FT Alphaville)

Why Goldman Sachs (GS) always wins.  (The Atlantic)

Bogle and Buffett want to limit short-term speculation.  (WSJ, also Zero Hedge, Clusterstock, 24/7 Wall St.)

Is the moment for financial reform past?  (Big Picture)

Consumers seem to be getting their financial houses in order.  (Felix Salmon)

Shocking.  “The federal government is unlikely to recoup all of the billions of dollars that it has invested in General Motors and Chrysler…”  (WashingtonPost also Curious Capitalist, Dealbreaker)

The big media companies have only themselves to blame for their problems.  (The Atlantic)

“Higher education today also suffers from a deep cultural problem. Failure has become acceptable.”  (NYTimes also Clusterstock, Free exchange, Felix Salmon)

So don’t hide your failures. Wear them as a badge of honor. And most of all, learn from them.”  (A VC)

An interview with noted blogger Charles Kirk of the Kirk Report.  (Wall St. Cheat Sheet)

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