Wii and PS3 console sales slump in US

The US video game industry, which appeared to be riding out the recession last year, had the horse shot from under it in the first half of 2009.

The June sales figures released by the NPD research firm on Thursday night showed the fourth consecutive month of year-over-year declines. June’s 31 per cent drop was the greatest year-over-year monthly fall since September 2000, when the industry declined 41 per cent.

“The first half of the year has been tough largely due to comparisons against a stellar first half performance last year, but still, this level of decline is certainly going to cause some pain and reflection in the industry,” said Anita Frazier, NPD analyst.

There have been no game releases to match last year’s launches of Grand Theft Auto IV and Wii Fit in the first half of 2008, but there is a strong release schedule planned for the second half, which should mark an upturn in fortunes.

Analysts at Wedbush Morgan Securities said in a Friday note that June sales were lower than their weak expectations, but the trend probably only had another month to run.

“We are most troubled by the decline in sales of the three major consoles. On a year-over-year basis in June, combined console sales were down 30 per cent, with [home] consoles down 41 per cent and handhelds down 17 per cent, ” they said.

“We don’t think that a weak software lineup is enough to explain what happened, and can only conclude that consumers aren’t sufficiently interested in buying consoles to drive sales higher each month. We attribute this lack of interest to price fatigue, and note that the Wii has gone longer than any console in history without a cut of its launch price, while the PS3 has gone more than 18 months without a cut.”

That may explain why Microsoft’s Xbox 360, which has driven its price down to be the cheapest console at $199, is the only one of the three to show growth so far this year.

Sales were up 20 per cent in the first half and 9 per cent year-on-year in June, with 241,000 units sold.

Nintendo released its Wii Sports Resort this month with the Wii Motion Plus improved controller included inside. It may have come in the nick of time, with its Wii Play package of sports games not featuring in the top ten list in June for the first month since its launch at retail 29 months ago.

If Sports Resort does not do well, Nintendo may have to look at a price cut in the autumn, while Sony will certainly be contemplating a reduction, in time for the holiday season.

A recession bottom does not guarantee a recovery

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One aspect of the economic cycle investors need to keep at the forefront is the nature of economic change and economic recovery, as promulgated by economist John Maynard Keynes.

First, toss out any notions that market forces, left to their own devices, will always bring about a quick economic recovery.

Continue reading A recession bottom does not guarantee a recovery

A recession bottom does not guarantee a recovery originally appeared on BloggingStocks on Fri, 17 Jul 2009 18:00:00 EST. Please see our terms for use of feeds.

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peHUB Rewind

Here’s a look at the past two weeks of scoops, opinions and analysis from the peHUB blogging team.

Facebook’s London Sprawl Beginning to P.O. Neighbors [Social Networking]

Silicon Valley Smackdown Over Twitter Leak and Its Handling [Social Networking]

Amazing: Comic Dave Chappelle Tries Last-Minute Show in Portland; 4,000 Twitterers Crash Scene [Social Networking]

The Curiously Unsociable CEO of Social Networking Giant LinkedIn [Social Networking]

Google’s Eric Schmidt: I Might Step Off Apple’s Board. Eh, or Not. [Decisions Decisions]

Oops! No website for Andreessen Horowitz [Ironies]

Do “Operators” Make The Best VCs? [Midas List]

Mark Cuban to peHUB: You’re Wrong on This One [Impropriety]

Mark Cuban Cleared of Insider Trading Charges [Impropriety]

Steven Brill Tries Clearing the Air - and His Reputation - Around Clear Pass Debacle [Shrinking Violet]

More Clarity on the Verified Identity Shutdown [Scoops]

New Report, Same Result: VC Fundraising Drops in Q2 [Numbers]

If CIT Goes Down, These Companies May Be Hurting [The Right Size to Fail]

PE Council Testifying In Support of PE Firm Registration [Regulation]

Riverlake Partners Suspends Fundraising Action [Raisin' The Funds]

Navis Asia Fund Halfway To Target [Raisin' The Funds]

Pandora Tunes Into $35 Million [Raisin' The Funds]

Advent Raising Fifth Latin America Fund [Raisin' The Funds]

Huntsman Gay Raises $1.1 Billion for Debut Fund [Raisin' The Funds]

DFJ Moving on Japan [Raisin' The Funds]

Israeli Startup Funding Up (Slightly) in Q2 [Raisin' The Funds]

KKR Delays Fundraising Drive [Raisin' The Funds]

Former BSMB Pro Launching Moxie Capital [Hello New Firm]

Level Equity Formed by Ex-Insight Venture Pros [Hello New Firm]

PE Mergers a Reality? Edgewater Sells To Lazard [Doin' the Deals]

What Consumer Credit Protections? GTCR Ropes Rhodes for New Credit Platform [Doin' the Deals]

Sunday Funny: Cash4Gold To Solve U.S. Budget Shortfall [Random]

CastleGuard Partners Wants To Revive Middle Market Lending [Doin' the Deals]

Midweek M&A Madness [Regulars]

VC Love Affair with India Apparently Cooling [Just Not That Into You]

Q&A With Healthcare VC Doug Kelly [Interviews]

8 Questions, 7 Answers for Richard Zannino, CCMP Capital’s New Retail & Media Guy [Interviews]

From Cinnabon to Private Equity: 5 Questions for Geoff Hill [Interviews]

Laundry Room Chronicles: Q&A with Michael Toporek of Brookstone Partners [Interviews]

Steve Rattner Steps Down, What Next? [Headscratchers]

Steve Rattner Leaves DC, After Buying $4 Million  Home [Headscratchers]

Price Doesn’t Matter in VC Deals, But The “Promote” Does [Vox Pop]

Silicon Valley Lessons for Detriot [Links Lists]

The New Criterion for MBA Admissions [Links Lists]

Michael Huffington sues The Carlyle Group [Links Lists]

How Dead is M&A? [Links Lists]

How to Write an MBA Admissions Essay [Links Lists]

How Bad Is CIT’s Loan Portoflio? [Links Lists]

Best VC Homepage Ever [Links Lists]

Does PE “Get” Social Media? [Links Lists]

A Tale of Two Bailouts [Links Lists]

Silicon Valley’s Beleaguered Moneymen [Links Lists]

Last week: peHUB Rewind #13


Where’s That Goddamn Ringing Coming From?

Nobody listens to me.

Were I not a charter member of Ye Ancient and Hoary Order of Pompous, Arrogant, and Misogynistic Assholes—more commonly known in this day and age as investment bankers—I might take this state of affairs amiss. But my ego, like my checkbook, is constructed of seamless cast iron, so no little absence of sustained attention to my pearls of wisdom can disrupt my customary bonhomie, especially on such a pleasantly sweltering Summer Friday as today in New Jack City.

But this afternoon, as I surveyed the crater-strewn landscape outside my window that used to be the gleaming crossroads of international finance over the remnants of a particularly satisfying cigar, I became filled with magnanimous concern for those among my brethren who perhaps are not in as comfortable a situation or as equable a mood as I.

I speak, of course, about such friends and colleagues as those who man the 24-hour money spinning machines at Goldman Sachs and JPMorgan. Poor, sad, pitiful wretches. For surely, even as they labor valiantly over the swelling piles of filthy lucre in the engine rooms of the global economy, sweating buckets into their custom-made shoes and staining their $5,000 suits with unsightly streaks of salty perspiration, these poor creatures know that appreciation and admiration among the general populace for their selfless acts of daily heroism are nowhere to be found.

On the contrary, jibes, epithets, and scurrilous abuse are what they encounter. No "Thank you, Sir, for sacrificing your weekends in St. Barts and daily visits to the manicurist to shovel ever greater piles of gleaming coin into your shareholders' and senior executives' bank vaults, whence surely they will eventually trickle down to water the parched and thirsty lips of a grateful nation." No, instead they get called "vampire squid," and are castigated for having blood funnels.

As if that's a bad thing.

* * *

Apparently there is some small concern that, after having been thrown several government-issue lifejackets and buoyed upon a flood of free taxpayer money to preserve the illusion that they were no better off than perennial basket cases like Citigroup and Bank of America, Goldman et al. are displaying a striking tone deafness when it comes to the recompense of their toiling hordes. They are accruing bonuses according to the old "halfsies" rule, which history tells us was first formulated in the late Pleistocene when a natty Cro-Magnon investment banker promised to help acquire a particularly troublesome Mastodon for a gormless bunch of Neanderthal cubicle dwellers in exchange for half the choice steaks.

Sadly, tradition is no substitute for judgment in these troubled times. Accordingly, out of deep charity and the everlasting goodness of my heart, I am more than happy to share again some thoughts I transcribed on this very subject a mere 8 1/2 months ago, which the executives of the surviving investment banks might find useful. I will not take offense that my previous advice seems to have been ignored, since I am sure that last October Messrs. Blankfein and Dimon were far more concerned with swatting piranhas and alligators away from their submerged testicles than with fine-tuning the optics of a politically acceptable and competitively workable compensation model.

For any of you who are too lazy to click through to the original, plus those (like Lloyd) who have been charged by Timothy Geithner with itemizing every surplus hyperlink they have taken on the taxpayers' dime, I offer the core of my measured advice here:

Pace the structural changes in the industry, which all point toward a long-term decline in both the absolute and relative levels of investment banking compensation, the CEOs and Boards of Directors of major commercial and investment banks are under severe short-term political pressure to reduce pay. Because this is true for the entire industry, senior management at the leading banks may take this opportunity to cut their wage bill in tandem from, say, the traditional 50% of net revenues to 40%, or lower.

I can think of many senior executives who would love to stick it to their restive, pain-in-the-ass bankers and traders who are never happy with their pay, no matter how high it is. This crisis could provide the industry great air cover for a structural change in the level of pay to employees. "It's not us," they will cry, "Congress made us do it!"

Nevertheless, even at reduced payouts the absolute level of pay for the typical bog-standard Managing Director will still be plenty large enough for Henry Waxman to string him up with piano wire on the steps of Capitol Hill and be applauded for doing so. Panicky, resentful voters who can only dream of making enough money to break into Obama's higher tax bracket and who are worried about keeping their homes, their jobs, and their three large-screen plasma TVs will not look kindly on anyone making over $1,000,000 this year. Even in a shitty year like this one, there will be plenty of those to go around.

So i-bank management better start getting pretty clever about justifying, explaining, and structuring its compensation practices and payouts in the glare of public scrutiny. For what it is worth, I think most people could accept even high pay packages if it were shown that bankers were not walking away with the family silver after the public has saved their house from burning down. Limit maximum cash compensation for everyone to less than $1 million, and make up any excess in the form of long-dated options and long-vesting restricted stock. I imagine even Joe the Plumber could accept an MD earning $10 million this year if he knew that $9 million of it was in the form of company stock he cannot touch for five to 10 years. That way, the banker will thrive or suffer in tandem with his firm's other shareholders and the US taxpayers who have rescued his cookies, and Messrs. Waxman and Cuomo will take comfort in knowing that TARP's billions have not flown straight out the door to fund cocaine and hooker binges on St. Barts this Christmas.

There you have it. Put on the hair shirt, don the mucking boots, and just wade right into the Augean Stables. You have the best excuse in the world right now to screw over your employees. All you have to do is point out the window and show them the snarling crowds of Congressmen, auto machinists, and Rolling Stone readers waving pitchforks and torches on the sidewalk to persuade them that yes, perhaps just this once, they might forgo squealing like little girls if they receive less than half of the total, crisis-inflated dollars rolling in the front door and defer most of their cash compensation to another day.

As usual, you can soften the blow by reminding them that most citizens outside the charmed circle of investment banking have all the basic understanding of finance and accounting of Maxine Waters and frontal lobes which are easily distracted by the shenanigans of John and Kate or the Jonas Brothers. This too, as as our colleague and mentor the Devil himself has maintained from time immemorial, shall pass.

* * *

But Lloyd, Jamie ... Guys.

I'm a businessman, too, you know. I figure my advice will save you and your firms billions of dollars in current compensation, and, what is more, garner you a priceless trove of positive publicity and political capital that will just keep on giving into the future. (As long as you continue to water it with ongoing campaign contributions, of course.) I think I deserve to be compensated for my critical contributions to your firms' value creation, don't you?

Whaddya say we split the difference, and I take 5% of your combined 2009 annual revenue as a fee. That's fair, right?

Oh, and by the way, I want top billing on the deal tombstone. Tossers.

© 2009 The Epicurean Dealmaker. All rights reserved.

Mattel up on earnings news, but its Barbie toys need help

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Mattel, Inc. (NYSE: MAT) is all about fun and games, but it doesn't play around when it competes against Hasbro, Inc. (NYSE: HAS) and JAKKS Pacific (NASDAQ: JAKK). In fact, the stock is up over 7% today as of this writing on the toy manufacturer's earnings news. According to Reuters, Mattel made 6 cents per share during the second quarter, beating estimates by a whopping five pennies.

Pretty good news for Mattel, considering it's been having trouble lately with its Barbie line. Mattel has also had problems with its top-line sales. They dropped 19% in Q2. Fluctuations in the value of the dollar helped to hinder the sales picture, but make no mistake -- Mattel has to step things up a couple notches to keep the top line healthy. Toys are a difficult category to sell during a recession. And when toys do sell, even during the Christmas retail period, they might not command top dollar. Hot toys do, of course, but an entire portfolio cannot necessarily be saved by a single fad item.

Continue reading Mattel up on earnings news, but its Barbie toys need help

Mattel up on earnings news, but its Barbie toys need help originally appeared on BloggingStocks on Fri, 17 Jul 2009 17:40:00 EST. Please see our terms for use of feeds.

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Pepsi remains the choice of a new generation

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Forget the mantra about Pepsi's North American market's beverage and snack revenue being hurt, yada yada.

I'm Reiterating my Buy rating for PepsiCo, Inc. (NYSE: PEP) first recommended on March 13, 2009 at a price of $48.62.

Continue reading Pepsi remains the choice of a new generation

Pepsi remains the choice of a new generation originally appeared on BloggingStocks on Fri, 17 Jul 2009 17:20:00 EST. Please see our terms for use of feeds.

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The Week In Private Equity: The Bolsheviks Are Coming

This week in private equity:

First, there is no way to make this item cheerful or zany, so we’ll just do a quick “news from the valley of debt refinancing” segment to get it all out of the way. Kellwood Co., the struggling Sun Capital Partners-backed apparel manufacturer, was unable to renegotiate and extend a bond issue that matured Wednesday. But it extended the deadline for a proposed debt exchange until midnight tonight. It also negotiated a forbearance agreement with its bank group. Elsewhere, auto parts supplier Cooper-Standard Holdings Inc., backed by Cypress Group Inc. and Goldman Sachs Capital Partners, secured a waiver for its senior notes through Aug. 14. And Thomas H. Lee Partners-backed mattress maker Simmons Bedding Co. missed a $7.9 million interest payment.

lenin_E_20090717173645.jpgAssociated Press

That was fast award: To carry out the analogy, is Andrew Cuomo Lenin? Quadrangle Group co-founder Steven Rattner’s tenure as car czar lasted less than six months, despite the fact that he bought himself a $4.35 million mansion in D.C. just two months ago. Despite government platitudes about the U.S. car industry having found its way to a better place now, speculation abounds that his departure has something to do with Quadrangle’s involvement in the ongoing pay-to-play scandal at New York State Common Retirement Fund. Facts, however, are thin.

Who me, worry? award: CIT Group Inc. may be close to bankruptcy, and it may be a big lender to mid-market buyout firms’ portfolio companies, but the ones we spoke to say they’re generally not worried. Why not? Because they’re doing things like drawing down their credit lines to make sure they still have access to them - which, of course, is pushing CIT closer still to insolvency.

Look n find award: A Senate panel extended a psychotherapist’s couch to the private equity and venture capital industries this week, giving them the chance to unburden themselves about how they really feel about having the stuffing regulated out of them. We compared and contrasted the opinions of the token venture and PE spokesmen, an exercise we found to be sort of like those cartoons in the paper (you know, the newspaper? Maybe you’ve heard of it?) where you have to figure out what’s different about two nearly identical pictures. Except there’s only one thing different here: private equity, despite saying it doesn’t need to be regulated, is telling the government to go ahead and bring it on, whereas venture continues to resist. We think that were this really a psychotherapy session, the PE industry might be chided for failing to express some repressed emotions.

Spat of the week: This one goes to the scuffle between Michael Huffington and Carlyle Capital Corp. Huffington’s lawsuit against the affiliate of Carlyle Group is really pretty simple: he alleges Carlyle co-founder David Rubenstein guaranteed him that he would get his money back from the failed mortgage investor, but he hasn’t. We also appreciate the irony in the fact that Huffington and Rubenstein initially met in Iceland, which itself has since collapsed.

eddiebauer_E_20090717173824.jpgAssociated Press

If at first you don’t succeed award: Golden Gate Capital, together with Sun Capital Partners Inc., thought Eddie Bauer Holdings Inc. was worth $286 million cash back in 2007. It still thinks the retailer is worth exactly that amount (just without another $328 million in debt that was factored into the original buyout). Its bid won out over a number of others, including one from stalking horse CCMP Capital Advisors, in an auction that ended at 2:30 a.m. this morning. Of course, that was only 11:30 p.m. for the Californians: perhaps they just had the most energy at the end?

Fund-raising award of the week: From what we hear, raising a debut fund in this environment is harder than sitting through an episode of NYC Prep. So we have to give props to two debut managers that have been getting it done, thanks in part to enormous personal commitments to their funds. At Huntsman Gay Global Capital LLC, managers pledged 10% of their $1 billion target, while at White Deer Management LLC, insiders pledged a whopping 13% of their intended target.

Deal of the week: This one goes to a company vaguely called Asset Marketing Services Inc., which can now count Stone Arch Capital as an investor. We have no idea how big this deal is, or what the financial health of the company is, and we don’t even care that several of the links we clicked on its Web site don’t work, because, dear readers, the coins this company sells are quite simply off the hook. There’s the 2009 Canada $4 Silver Tyrannosaurus Rex Fossil. There’s the Tutankhamun Death Mask 24K Golden Pyramid Coin. And there’s our favorite, and something we really could use around here: the Decision Coin, which has a pointer on it that you can spin around to make decisions like “ask mom,” “give up” and “next week.”

Until next week, then, and have a great weekend.

Semiconductors Up 36.13% Year To Date

If there's any one equity group that investors like to use as a leading indicator, it's the semiconductors. And if the semis are in fact "leading," the economy and the market should be in store for some nice future growth. As shown in the top chart below, the Philadelphia Semiconductor (Sox) index is now up 36.13% year to date versus...

FRBSF: The Current Economy and the Economic Outlook

Mary Daly of the Federal Reserve Bank of San Francisco gives her views on the current economy and the outlook. There are two issues revealed in the graphs below that I wish I had time to discuss further. First, the graph labeled "Gaps are typical in downturns" shows what happens to state finances in recessions, and how severe the current recession is in that regard. The budget problems of the states in downturns is a key factor working against recovery -- many states have little choice but to reduce spending or increase taxes when the economy goes into recession -- and we need to find a way to fix that problem so that this recovery impeding mechanism doesn't get in the way the next time we face the problem of reviving a stalled economy. Second, the last graph shows the relationship, or rather the lack of a relationship, between budget deficits and inflation. This is a counterpoint to the objection to using fiscal policy based upon the claim that it will have undesirable inflationary consequences. It is also noteworthy, as shown in the second to last graph, that inflationary expectations remain well anchored:

FedViews, by Mary Daly, FRBSF [Charts]: Financial markets are improving, and the crisis mode that has characterized the past year is subsiding. The adverse feedback loop, in which losses by banks and other lenders lead to tighter credit availability, which then leads to lower spending by households and businesses, has begun to slow. As such, investors’ appetite for risk is returning, and some of the barriers to credit that have been constraining businesses and households are diminishing.


The housing sector, which has been at the center of the economic and financial crisis, also looks to be stabilizing—albeit, at a very depressed level. The pace of house price declines is slowing, housing starts and new home sales have leveled off, and existing home sales have edged up in recent months. These positive developments suggest that the housing market may be reaching a bottom.


Income from the federal fiscal stimulus, as well as some improvement in confidence, has helped stabilize consumer spending. Since consumer spending accounts for two-thirds of all economic activity, this is a key factor affecting our forecast of growth in the third quarter.


Whether the adverse feedback loop will continue to slow and ultimately reverse depends in part on the labor markets, which continue to deteriorate. The economy lost 467,000 nonfarm jobs in June and the unemployment rate rose to 9.5 percent. Although recent monthly job losses remain sizable, the pace of declines, however, is lower than earlier this year.


That said, ongoing weakness in the labor markets continues to push up foreclosures and pose risks to the fledgling recovery of housing.


Although the economy continues to face many downside risks, we expect the easing of the financial crisis and the bottoming out of the housing market to allow a modest recovery to ensue in the third quarter. In our view, the recovery will be painfully gradual, with the economy expanding below potential for several quarters.


The gradual nature of the recovery will put additional pressure on state and local budgets. Following a difficult 2009, especially in the West, most states began the 2010 fiscal year on July 1 with even larger budget gaps to solve.


While such gaps are typical in recessions, state governments face far larger problems than usual since all of their major sources of revenue (income, sales, and property taxes) have been disrupted. The federal fiscal stimulus payments to states should help stave off even worse difficulties, but the states likely will face constrained budgets for years to come.


As the financial crisis has subsided and the economy has begun to stabilize, some worries about inflation have emerged. In the near-term, we expect the slow recovery and the persistent and considerable slack in product and labor markets to keep inflation below its preferred longer-run rate as reflected in the minutes of the Federal Open Market Committee meeting held in April.


In manufacturing, capacity utilization is at an all time low. This excess capacity should continue to exert downward pressure on both input and final goods prices.

There also is unprecedented slack in the labor markets. Considering the official unemployment rate plus the number of workers who are employed part-time involuntarily for economic reasons, the overall measured slack is in excess of the 1982 recession. Moreover, we foresee this measure rising even higher by the end of the year.

This slack in the labor markets should continue to temper growth in wages and salaries, which has dropped off sharply over the course of the recession.


Despite the considerable downward pressures on prices, concerns about deflation appear to have abated. Market participants now expect inflation over the next five years to be on average around 1%, roughly in line with our forecast.


Over the longer-run, inflation expectations are higher, hovering in a 2 to 3% range, and despite considerable media worries about future inflation risk, expectations remain well-anchored.


Still, many remain worried that large fiscal deficits will eventually be inflationary. However, a look at the empirical link between fiscal deficits and inflation in the United States shows no correlation between the two. Indeed, during the 1980s, when the United States was running large deficits, inflation was coming down.

The views expressed are those of the authors, with input from the forecasting staff of the Federal Reserve Bank of San Francisco. They are not intended to represent the views of others within the Bank or within the Federal Reserve System. FedViews generally appears around the middle of the month. The next FedViews is scheduled to be released on or before September 14, 2009.

Fortress To Name Ex-Fannie Head as CEO

NEW YORK (Reuters) - Fortress Investment Group (FIG.N), among the largest private equity and hedge fund firms, is expected to name former Fannie Mae (FNM.P) boss Daniel Mudd as its chief executive, the Wall Street Journal reported Friday, citing a person familiar with the matter.

In a surprise move, Mudd, a Fortress director, would replace Fortress co-founder and top stockholder Wesley Edens. Fortress officials were not immediately available for comment.

The appointment would relieve Edens and other top executives of management responsibilities, allowing them to focus on a portfolio hit by the financial crisis and to seek out new investments, the paper said, citing the unnamed source.

The son of television newsman Roger Mudd, Daniel Mudd first did business with Fortress in the late 1990s as a top executive at GE Capital, where he worked on deals with Peter Briger, a Goldman Sachs partner who is now Fortress co-president.

The board of Fannie Mae plucked Mudd, 50, from his role as chief operating officer to lead the mortgage finance company as it tried to rebuild after an accounting scandal in late 2004.

As the housing crisis deepened, Mudd was responsible for growing the company and preserving market share assailed by the country’s largest commercial and investment banks.

Mudd was forced to leave Fannie Mae last September when the government took it over, along with its sibling Freddie Mac (FRE.N), but he retains a reputation in many quarters as an able manager who was caught up in events out of his control.

Fortress, which manages about $27 billion in assets, listed its shares near the peak of the private equity boom in February 2007. Its stock has plunged 90 percent since, though the firm’s five top principals, including Edens and Briger, own 77 percent of Fortress and raked in nearly $900 million selling a minority stake to Nomura Holdings Inc (8604.T) before the IPO.

The recession and credit crunch have weakened the firm’s portfolio. For example, Fortress is in talks with lenders to refinance a $1.6 billion loan to Florida East Coast Industries, its largest investment. The loan comes due on July 27.

The firm’s two flagship hedge funds suffered massive losses and investor withdrawals last year, prompting Fortress to impose gates to stem redemptions.

The firm has been in the news recently as management looks to take advantage of Edens calls “The Great Deleveraging.”

In May, Fortress was part of a trio of investors that agreed to inject $450 million in First Southern Bancorp, a Florida bank they intend to use for buying other distressed banks. Last month, the firm took control of about $2 billion in assets from troubled hedge-fund firm D.B. Zwirn & Co at a steep discount.

With Fannie Mae often in the crosshairs of regulators and lawmakers, Mudd, a former U.S. Marine, gave conciliatory testimony before Congress that differed from that of his predecessor, Franklin Raines. (Reporting by Joseph A. Giannone, Patrick Rucker; Editing by Gary Hill)


peHUB Second Opinion 7.17

Goldman Sachs Internal Memo: Please limit high-fives and chest bumps to a dozen a day. Don’t wear your crowns, except around the office. (New Yorker)

Strip and Flip Crowd? Am I totally out of touch in my private-equity-covering bubble to think that we moved past calling buyout firms “strip-and-flippers” awhile ago? Particularly in the middle market, which is what this article refers to, the instances that can truly be considered “strip-and-flip” are rare enough that it seems inflammatory and sloppy to call it that. (Reuters)

Distressed UK Speculation: Why is the Gates Foundation taking reckless risks? (Reuters)

Great Headlines: CNBC Scores Big With Porn And Pot (Clusterstock)

PEC Testimony Before House Financial Services Committee: “But the critical point for the members of this Committee is that the failures of individual PE-owned companies, while hardly trivial, do not give rise to the kind of systemic risk relevant to policy makers seeking to prevent global financial shocks.” (PEC)

S&P’s Solution to the AAA problem? Rotate analysts. Bogus AAAs are clearly here to stay, Dealbreaker writes.

For Fun: The 50 greatest movie trailers. (IFC)

IPO Watch: Australia version. (Carried Interest)

Happy Birthday Pete Peterson: Q&A with the Blackstone big. (FT)


Coming soon: mobile, immersive, interactive entertainment

Writing for the FT’s New Technology Policy Forum, Columbia University professor Eli Noam foresees a future in which a mobile device will be not just an undersized screen, but as an extraordinarily powerful connection point to a new style of video media.

Images will be projected through light video glasses and heads-up displays using microlaser projectors embedded in the temples of eyeglasses, and known as personal media viewers, which enables sharper and multi-dimensional images while maintaining sight lines to the real world.

Continue reading “Coming soon: mobile, immersive, interactive entertainment”