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Airbnb, bank run, banks create money, Bernie Madoff, bitcoin, Bretton Woods, Carmen Reinhart, correlation does not imply causation, Credit Default Swap, crony capitalism, crowdsourcing, Donald Trump, Downton Abbey, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, Home mortgage interest deduction, Jeff Bezos, job automation, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, liquidity trap, Mark Zuckerberg, market bubble, moral hazard, mortgage tax deduction, NetJets, offshore financial centre, oil shock, peak oil, Peter Thiel, price stability, profit motive, quantitative easing, race to the bottom, Ronald Reagan, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Steve Jobs, The Wealth of Nations by Adam Smith, too big to fail, Uber for X, War on Poverty, yield curve
This raises an obvious question: What happens if there’s a run on a specific NetJets plane? NetJets has more than seven hundred planes in its fleet and keeps adding to that number. If the jet partially owned by a customer is in use, the NetJets rule is they offer their customers another aircraft that is the same or similar to the one the customer partially owns, or, for that matter, a larger one in their fleet that’s not being used. What if there’s a rush on all the planes in the NetJets’ fleet at the same time? If so, just as hotels have overflow deals with other local hotels, so can NetJets access private air transportation outside its fleet for its well-heeled customer base.
It’s neither the only owner of high-end aircraft nor the sole fractional-ownership jet company. What needs to be stressed is that despite multiple-person ownership of its planes, NetJets isn’t multiplying them. Even though NetJets has many multiples of seven hundred plane owners with guaranteed access at quick notice to the roughly seven hundred planes it its fleet, NetJets is not playing a trick on its customers. Without presuming to do its complicated math for it, I wager that Net-Jets understands probabilities. While all of its owners have guaranteed access to private flight in a timely manner, the company is well aware that they’re not all going to need to fly at once.
Arguably, the best-known provider of private air transportation is Net-Jets. Based in Columbus, Ohio, and owned by Warren Buffett’s Berkshire Hathaway holding company, NetJets sells fractional ownership of the jets in its fleet of seven hundred planes. The benefits to the customer are fairly apparent. Whether they buy fifty hours of flight time per year or four hundred, they have guaranteed access to the plane they’ve purchased a fraction of with little notice required. Obviously, the bigger the fraction they buy, the more annual flight time they have. NetJets oversees the maintenance of each plane, makes sure the pilots are well-trained and licensed, and houses the planes.
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
affirmative action, Albert Einstein, anti-communist, Ayatollah Khomeini, barriers to entry, Bonfire of the Vanities, Brownian motion, capital asset pricing model, card file, centralized clearinghouse, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, desegregation, Donald Trump, Eugene Fama: efficient market hypothesis, global village, Golden Gate Park, Haight Ashbury, haute cuisine, Honoré de Balzac, If something cannot go on forever, it will stop, In Cold Blood by Truman Capote, index fund, indoor plumbing, interest rate swap, invisible hand, Isaac Newton, Jeff Bezos, joint-stock company, joint-stock limited liability company, Long Term Capital Management, Louis Bachelier, margin call, market bubble, Marshall McLuhan, medical malpractice, merger arbitrage, Mikhail Gorbachev, moral hazard, NetJets, new economy, New Journalism, North Sea oil, paper trading, passive investing, pets.com, Plutocrats, plutocrats, Ponzi scheme, Ralph Nader, random walk, Ronald Reagan, Scientific racism, shareholder value, short selling, side project, Silicon Valley, Steve Ballmer, Steve Jobs, supply-chain management, telemarketer, The Predators' Ball, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transcontinental railway, Upton Sinclair, War on Poverty, Works Progress Administration, Y2K, zero-coupon bond
At the shareholder meeting, Buffett told investors, “Our idea of tough times is periods like now.”9 With too much cash, too few wonderful ideas, and without calling the Air-a-holic hotline, Buffett now bought a company for Berkshire called NetJets for $725 million.10 He sold the Indefensible and became one of NetJets’ customers. This company sold time-shares in jets of various makes and sizes; its planes all had tail numbers that started with QS, or Quebec Sierra. Susie had gotten Warren to buy her a quarter share in a “fractional” jet from NetJets in 1995, worth two hundred hours a year of flight time, which she referred to as The Richly Deserved.11 She joked that QS stood for Queen Susie. Buffett took to NetJets so much that he had appeared in an ad and endorsed it even before he bought it.
If only women could own sports franchises, they’d sell for one-tenth what they sell for now.” He told the shareholders that NetJets would return to profitability and would dominate its market. He did not point out, however, that it might not earn the margin on capital he had hoped, at least not any time soon. It was a letdown, but still a lot better than a money-losing textile mill. Besides, NetJets was fun. He knew mountains of minutiae about how the planes were purchased, managed, scheduled, routed, maintained, insured, piloted, crewed, and even how the pilots were trained. NetJets was cool. He did a lot of elephant-bumping at NetJets events. He would never sell it, even if the world’s other mega-billionaires tried to arm-wrestle him for it.
Every board member interviewed reached some variation of this conclusion, no matter where they stood on later events. 8. Mark Pendergast, For God, Country, and Coca-Cola. New York: Charles Scribner’s Sons, 1993. 9. Speaking at the 1998 Berkshire Hathaway shareholder meeting. 10. At the time, NetJets marketed itself both as NetJets and by its legal name, Executive Jet, Inc. It was renamed NetJets in 2002. 11. Interviews with sources; Anthony Bianco, “The Warren Buffett You Don’t Know,” BusinessWeek, July 5, 1999. 12. The business requires a “core fleet” of redundant aircraft, so expensive that running a fractional jet company is by definition unprofitable unless done on a huge scale (or used as a loss-leader by an aircraft manufacturer or other company with a tie-in product). 13.
asset-backed security, bank run, banking crisis, big-box store, call centre, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, housing crisis, Maui Hawaii, mortgage debt, naked short selling, NetJets, shareholder value, short selling, Skype, too big to fail, Y2K
Every month the bank paid an additional $14,000 for each of the planes, presumably for maintenance. Each time Killinger flew anywhere, it cost about $700 in fuel costs and about $2,500 each hour the plane spent in the air. It wasn’t unusual for Washington Mutual to shell out a couple hundred thousand dollars each month in plane costs. The cost to the company was not detailed for shareholders. NetJets, the timeshare company WaMu used, described one of the planes, a Cessna Citation X, as “the world’s fastest midsized business jet.” It had a 24-foot cabin and large cushy seats, as well as a refreshment center stocked with sandwiches and drinks. This was hardly the picture of corporate excess; many executives at larger investment banks and finance companies traveled on much bigger planes.
Chapman drove Tall to the emergency room. The doctors performed a series of tests late into the evening and delivered bad news: Tall needed open heart surgery, right away. But Tall wanted to return to Seattle and his own doctors. Chapman got on the phone and called Killinger. Could the executives use WaMu’s NetJets account to book a private plane back to Seattle? There was no way Tall could travel on a commercial airline in his fragile condition, Craig Chapman explained. Killinger hesitated. “I don’t know if we can get a private plane down there,” he said. After several minutes of discussion, it seemed to Chapman that Killinger either didn’t want them to use the plane or couldn’t decide whether to let them.
The private auction had failed, and they had received no word from the regulators about WaMu’s capital-raising plan. As they left, investment bankers in New York continued to camp out at the offices of Simpson Thacher, trying to find other ways to save the company. The WaMu executives debated for a long time whether to fly NetJets, which was already paid for, or commercial, which would look better publicly. In the end, they decided it was more important to return quickly and took the private plane. As they sat on the tarmac, waiting to take off, someone got an e-mail: JPMorgan was planning to hold an investor conference call at 9:00 p.m.
The Quants by Scott Patterson
Albert Einstein, asset allocation, automated trading system, Benoit Mandelbrot, Bernie Madoff, Bernie Sanders, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Brownian motion, buttonwood tree, buy low sell high, capital asset pricing model, centralized clearinghouse, Claude Shannon: information theory, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, Doomsday Clock, Emanuel Derman, Eugene Fama: efficient market hypothesis, fixed income, Gordon Gekko, greed is good, Haight Ashbury, index fund, invention of the telegraph, invisible hand, Isaac Newton, job automation, John Nash: game theory, law of one price, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, margin call, merger arbitrage, NetJets, new economy, offshore financial centre, Paul Lévy, Ponzi scheme, quantitative hedge fund, quantitative trading / quantitative ﬁnance, race to the bottom, random walk, Renaissance Technologies, risk-adjusted returns, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Sergey Aleynikov, short selling, South Sea Bubble, speech recognition, statistical arbitrage, The Chicago School, The Great Moderation, The Predators' Ball, too big to fail, transaction costs, value at risk, volatility smile, yield curve, éminence grise
In 2004, he’d become so serious about the game—and so good at it—that he joined the World Poker Tour, pocketing nearly $100,000 in winnings. He played online poker obsessively and even toyed with the bizarre notion of launching an online poker hedge fund. Weinstein, more of a blackjack man, was no slouch at the poker table, having won a Maserati in a 2005 NetJets poker tournament. Griffin simply hated to lose to anyone at anything and approached the poker table with the same brainiac killer instinct that infused his day-to-day trading prowess. No matter how hard they might play elsewhere, no poker game mattered more than when the gamblers around the table were their fellow quants.
In 2005, Weinstein’s boss, Anshu Jain, flew to meet with Berkshire Hathaway chairman Warren Buffett in Omaha, Nebraska, to discuss a number of the bank’s high-profile trades, including Weinstein’s. The two moguls were chatting about one of their favorite pastimes, bridge, and the conversation eventually switched to poker. Jain mentioned that Weinstein was Deutsche Bank’s poker ace. Intrigued, Buffett invited Weinstein to an upcoming poker tournament in Las Vegas run by NetJets, the private-jet company owned by Berkshire. Weinstein made his boss proud, winning the tournament’s grand prize: a spanking new Maserati. Still, gambling was just a pastime, a mental curiosity or warm-up for the real deal. Weinstein’s main focus, his obsession, remained trading—winning, crushing his opponents, and making money, huge money.
He never lost his cool, even when he was down. He knew it was only a matter of time before he was back on top. The quant poker games lasted late into the night, at times stretching into the following morning. In 2006, Muller took the PDTers on a ski trip to an exclusive ski resort out west, flying the gang on a NetJets private plane. His treat. It would be one of the last few such trips they would make in years. A credit crisis brewing on Wall Street would put an end to such carefree jaunts. But that was a worry for another day. Muller, meanwhile, was getting restless. Playing endless rounds of poker, hiking exotic trails in Hawaii, kayaking in Peru, shooting off on private jets to the Caribbean, dating models—it was all fun, but something was missing: trading, making millions in the blink of an eye, watching the winnings tick up like a rocket.
How to Kick Ass on Wall Street by Andy Kessler
Andy Kessler, Bernie Madoff, buttonwood tree, call centre, collateralized debt obligation, family office, fixed income, hiring and firing, invention of the wheel, invisible hand, London Whale, margin call, NetJets, Nick Leeson, pets.com, risk tolerance, Silicon Valley, sovereign wealth fund, time value of money, too big to fail, value at risk
In good times, you’ll be paid in cash. I don’t know if anyone actually hands out checks anymore, but try to get a check, something tangible for all that work. Then immediately cash it (in case they change their mind) and keep it in the bank. Buy a nice dinner. Don’t buy a Porsche or a place in the Hamptons or a NetJets card. Not yet. Build up the notorious FU money. At least a year or two of living expenses in case you want to leave or have to leave. What you may not realize is that in bad times, you still are going to be paid some bonus, though much lower than you’d like. But that bonus is often paid with little pieces of paper with your CEO’s picture on it.
Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland
Albert Einstein, algorithmic trading, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, conceptual framework, corporate governance, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy
“A lot of people under forty years old are making, like, $20 million or $30 million a year in these hedge funds, and they don’t know what to do with it.” As an example, she described a conversation at a dinner party: “They started saying, if you’re going to buy all this stuff, life starts getting really expensive. If you’re going to do the NetJets thing”—this is a service offering “fractional aircraft ownership” for those who do not wish to buy outright—“and if you’re going to have four houses, and you’re going to run the four houses, it’s like you start spending some money.” The clincher, Peterson said, came from one of her dinner companions.
A California technology executive—himself a global nomad who has lived and worked in Europe and Asia—explained to me that a company like Bharti has a competitive advantage in what he believes will be the exploding African market: “They know how to provide mobile phones so much more cheaply than we do. In a place like Africa, how can Western firms compete?” ARISTOCRACY OF IDEAS Just as the railroad created new cities, private jets and private jet time-shares like NetJets have contributed to the globalization of the super-elite—owning homes and doing deals around the world becomes feasible when you can travel the planet as easily as the middle class steps into a car. New technologies have helped, too—instant and mobile communication makes it possible to live on the move and around the world.
., 6, 119 Morgan Stanley, 63, 122 Moritz, Michael, 234 mortgage market, 146, 166–67, 169–70, 217 Mossler, Fred, 233 motion picture industry, 98, 100, 109, 127–30 Mount, Harry, 57, 67 Moyo, Dambisa, 266 Mubarak, Hosni, 144 Mullainathan, Sendhil, 138–40 Müller-Ötvös, Torsten, 46 Murphy, Kevin J., 131–34, 137 Murray, Charles, 286 music industry, 109–10, 126–27, 170–71 n-11 economies, 30 Nakamoto, Michiyo, 169 Naspers, 66 Neeleman, David, 156–57 Netherlands, 16 NetJets, 2, 66 New Class, 264–69 New Class, The (Djilas), 89–90 New Deal, 13–14, 132–34, 177 Newsweek, 127 New Yorker, 33 New York Times, 6, 7, 39, 45, 70, 125, 126, 140, 165, 174, 227, 258, 268 New York World, 7 New Zealand, 3, 159–60 Next Convergence, The: The Future of Economic Growth in a Multispeed World (Spence), 20 Nicaragua, 191 Niccolini, Julian, 36 Nigeria, 66 Nobel, Alfred, 71 Nobel Prize, 50, 69, 123, 124, 126, 175 Nolte, Nick, 127 Nucor, 158 Oakland A’s, 129 Obama, Barack, x, 18, 92–93, 242–43, 245, 247, 249, 250, 258, 269 as empiricist, 93 Observer, 74 Occupy movement, 28, 42, 80, 83, 92, 238, 244–45, 248–51 O’Connor, Caroline, 171–72 Odnoklassniki, 163 OECD, 3 O’Neill, Jim, 19, 21, 29–30, 33 one percent, xii, 135 0.1 percent vs., 79–83 99 percent vs., 80 during 1940s–1970s period, 14 in economic recovery of 2009–2010, xiii political vs. economic focus on, xiv share of national income, 3, 14 Open Society Foundations, 70, 77 Orange Revolution, 79–80, 192 Orlov, Yuri, 90 Orszag, Peter, 18 Orwell, George, 90 outsourcing, 92, 105, 106, 155, 179, 241 Oxford University, 62 Page, Larry, 55 PaineWebber, 142 Palin, Sarah, 83, 223 Pangea3, 106–7 paradigm shifts, 144, 145, 164 see also revolutions paradox of happy peasants and miserable millionaires, 31–32, 51, 82 Paulson, Hank, 213, 271–72 Paulson, John, 148, 244 Pavarotti, Luciano, 97, 98 pay for performance, 136, 138, 139 PayPal, 171, 183 Perella, Joe, 170 Peru, 82 Peterson, Holly, 1–3, 52, 80–81 Peterson, Pete, 1, 36–37, 44–45, 70, 78, 80 Petrarca, Francesco, 278 philanthro-capitalism, 71, 74–76, 264, 267 philanthropy, 70–76, 246, 264 Philippines, 25 Philippon, Thomas, 48, 53, 220–21 Pierson, Paul, 18 Piff, Paul, 239 Piketty, Thomas, 34, 43 Pimco, 65, 251 Pinchuk, Victor, 72–73, 268, 270 Pipes, Richard, 145 Pisarev, Kirill, 103 pivoting, 171–73 Platinum Study, 43 Pleading Guilty (Turow), 38 Plepler, Richard, 72 Pliny the Elder, 195 Plutarch, 195 political influence, 222–24, 247, 260–62 political revolutions, 144–46 politicians, 76–79, 269–70 Polo, Marco, 278 Poore, Peter, 76 PopTech, 67 Porter, Michael, 23 Posner, Victor, 120, 122 Potanin, Vladimir, 151 Premji, Azim, 155 Prince, Chuck, 169–70 private equity, 120–22, 128, 190, 243, 280 privatization, 193–94, 205, 207, 222, 225 in Russia, 162–64, 176, 179–81, 188, 192–93, 198, 207, 218, 223, 225 telecom, 196–98 privilege, 239 transferred to children, 282–83 Progress and Poverty (George), 38, 40–41 Progressive Era, 39, 78 Prokhorov, Mikhail, 162 Putin, Vladimir, 80, 107, 149–51, 255 Qiu Ying, 96 Quantum Fund, 142, 143, 154, 172 Queen Elisabeth Competition, 126 Quiggin, John, 48 Radia, Niira, 200 railroads, 178, 191 Raja, Andimuthu, 200 Rajan, Raghuram, 188–89, 198, 201, 228 Rajaratnam, Raj, 121–22 Rakoff, Jed, 256 Rand, Ayn, 249 Rauh, Joshua, 119–20 Ravid, Abraham, 130 Reagan, Ronald, 17, 89 Reagan Revolution, xii real estate, 222–23 Red Capitalism (Walter and Howie), 207–8 Reformed Broker, The, 84 Reich, Robert, 3 Renaissance, 96 Renaissance Capital, 65, 159 rentier elite, 42, 43, 283 rent-seeking, 188–228, 283 in China, 204–10 globalization and, 226–28 in India, 198–200, 228 value creation vs., 280–81 Reshef, Ariell, 48, 220–21 revolutions, 141–87 industrial, see industrial revolution political, 144–46 in technology, xiv, 4, 14–15, 18, 19, 21, 22, 25, 28, 30–31, 67, 100, 104, 146, 157–58, 164, 166, 184, 221, 285 Reynolds, Joshua, 94 “rich,” use of word, x Roach, Stephen, 210 robber barons, xv, 9, 19, 41, 42, 71, 118, 134, 191, 195, 237 Roosevelt on, 177–78 Robertson, Julian, 142 Robinson, James, 279–80 Rockefeller, John D., 195 Rodriguez, Alex, 108–9 Rolls-Royce, 46 Romney, Mitt, 77, 92–94, 236, 237, 286 as empiricist, 93–94 Roosevelt, Franklin Delano, 132 Commonwealth Club speech of, 176–78 New Deal of, 13–14, 132–34, 177 Roosevelt, Theodore, 39 Rose, Charlie, 72 Rosen, Sherwin, 97, 99–100, 107–12, 116, 123 Rosoff, Matt, 238 Royal Bank of Canada, 217 Royal Bank of Scotland, 217 Rubenstein, David, 121, 148–49 Rubin, Bob, 213 Russia, 3, 14, 19, 35, 56, 62, 66, 82, 96, 148, 149, 159–61, 163, 164, 178–81, 186, 206, 260 billionaire-to-GDP ratio in, 189 Bolsheviks in, 14, 93, 145, 284 privatization in, 162–64, 176, 179–81, 188, 192–93, 198, 207, 218, 223, 225 Revolution in, 152–53 science and technology in, 178–79 Russian oligarchs, 42, 46, 51–52, 61–62, 72, 92, 107, 147, 149–52, 186, 193, 196, 223, 255, 285 Ryan, Paul, 83, 190 Sabharwal, Manish, 32 Saez, Emmanuel, xiii, 34, 35–36, 43, 117, 281 Saïd, Wafic, 62 Sainath, Palagummi, 32 Saint Laurent, Yves, 114–16 Salganik, Matthew, 126 Salinas, Carlos, 196, 198 Salomon Brothers, 130 Sandberg, Sheryl, 174–75 Santorum, Rick, 246 Sawiris, Naguib, 4, 35, 77 Say’s law, 30–31 Schiff, Peter, 245 Schmidt, Eric, 56, 58, 69, 104–5, 236, 238, 280–81 Schmidt, Jacqueline, 70 Schrage, Elliot, 47 Schultz, Howard, 69 Schumer, Chuck, 211–13, 227 Schumpeter, Joseph, 32, 118 Schwarzman, Steve, 1, 36–37, 45, 46, 60, 147, 237, 243 science, 123–25 screenplays, 128 Seasteading Institute, 250 Securities and Exchange Commission (SEC), 226, 256 self-interest, 178, 215, 216, 239–40, 243–44, 249, 273–75, 286 Sennett, Mack, 98 Sense and Sensibility (Austen), 274–75 sewing machine, 113–15 Shaw, George Bernard, 39 Shelley, Percy Bysshe, 89 Shubrick, 40 Silicon Valley, 46–47, 56, 93, 163–64, 166, 171, 174, 175, 181–83, 230–31, 235, 236, 238, 283, 285 Silver Lake, 59 Simmons, Ruth, 284 Singapore, 63 Singer, Paul, 77 Singh, Manmohan, 155, 198–99 Sinha, Jayant, 189 skill-biased technical change, 91 skimming, 138 Slim, Carlos, 42, 46, 51, 195–98, 199, 218, 227, 236, 255 Smith, Adam, 67, 131, 138, 194, 229 Smith, Art, 112 Smith, Michael, 102 social mobility, 5, 82, 278–79 income inequality and, 283–84 Socialnet, 183 Somoza family, 191 Sorensen, Alan, 126 Soros, George, 53–54, 70, 73, 77, 141–45, 147, 148, 152–55, 172–73, 242 Soros, Jonathan, 153, 173 Soros, Tivadar, 152–53 South Korea, 32, 193 Soviet republics, former, 20, 77, 149, 155, 192, 193, 267 Soviet Union, 14, 17, 89–90, 144, 155, 178–80, 266 Spectator, 56–57, 59, 67 Spence, Michael, 20, 187 Spitzer, Eliot, 213 Splinter, Michael, 64 sports stars, 108–9, 129, 130, 138 Stalin, Joseph, 20, 90 Stanford Business School, 61, 147 Starr International, 101 Start-Up of You, The (Hoffman), 184–85, 187 Stengel, Rick, 72 Stephenson, Randall, 164, 185–86 Stevenson, Betsey, 32 Stewart, Rod, 36 Stiglitz, Joe, 27 Stock Market Boys, 51 Stoll, Craig, 112–13 Strauss-Kahn, Dominique, 72, 238–39 Stringer, Howard, 36 student activism, 268 Sull, Donald, 145, 147, 167–68, 171 Summers, Larry, xiii, 49, 87, 165, 174 Sunstein, Cass, 93 Sun Valley, 68 Sun Yat-sen, 39 superstars, 88–140 fees charged by, 101–3 globalization and, 91–92, 108 income of, vs. everyone else, 100–101 industrial revolution and, 95–99, 118 and talent vs. capital, 116–17, 122, 129–30 technology and, 91–92, 98–100, 108, 109 “Sustaining New York’s and the US’ Global Financial Services Leadership,” 211–15 Swank, Hilary, 110 Sweden, xii, 3, 12 Switzerland, 35, 63 Szelényi, Ivan, 89–90, 136, 266 Tahrir Square, 80 Taiwan, 35 Tawney, R.
Brazillionaires: The Godfathers of Modern Brazil by Alex Cuadros
affirmative action, Asian financial crisis, big-box store, BRICs, cognitive dissonance, crony capitalism, Deng Xiaoping, Donald Trump, Elon Musk, facts on the ground, family office, high net worth, index fund, invisible hand, Jeff Bezos, Mark Zuckerberg, NetJets, offshore financial centre, profit motive, rent-seeking, risk/return, savings glut, short selling, Silicon Valley, sovereign wealth fund, stem cell, The Wealth of Nations by Adam Smith, too big to fail, transatlantic slave trade, transatlantic slave trade, We are the 99%
Gradually, little red dots appeared stickered below artworks that had sold. To call your VIP lounge by its name would be crass, so the fair had a Collectors’ Lounge. Crates of Miami Basel’s official champagne were arrayed in a kind of rainbow shape at one side. The champagne brand, Ruinart, was not a conceptual artist’s joke. Past the bar I could see a booth for NetJets, the private-plane time-share company. Toward the back of the lounge was another, smaller lounge administered by UBS, the Swiss bank. You could only enter with some higher-level credential I hadn’t heard of. The fair was organized like Russian nesting dolls of exclusivity. I stopped by my friend’s gallery space for a chat.
Pierpont, 131 Moro, Sergio, 273–74, 316n274 MPX Energia, 144, 147, 170, 186, 222, 246, 247 bankruptcy of, 252 Murdoch, Rupert, 93, 298n93 Musk, Elon, 277 Não Somos Racistas (Kamel), 100, 207 Naouri, Jean-Charles, 4 Nasaw, David, 205–6 Natal, Brazil, 313n237 National Foundation of the Indian (Funai), 69, 74 National Oil Agency (ANP), 248 Natura Cosméticos, 213 Nestlé, 291n42 NetJets, 28 Neves, Aécio, noteTK Neves, Tancredo, 89–90 Newcomb, Peter, 29 New York Times Maggi interview, 62, 64 Niemeyer, Oscar, 63 Nissan car company, 190 Niué island, 24 Norte Energia, 71, 73, 74, 75 NRX-Newrest, 155 OAS, 239 bankruptcy of, 273 Belo Monte dam and, 239 Carwash and, 270–71 Natal soccer stadium, 313n237 political donations and favors, 239–40, 285TK, 313n239 Roberto Marinho Ave. costs and, 34, 239 Obama, Barack, 16 Oban (Operação Bandeirante), 40–41, 42–43, 44, 87, 290n40 companies supporting, 40, 42, 291n41, 291n42 Occupy Wall Street, 17, 236 o clube da propina (bribe club), 273, 274 Odebrecht, 30, 32, 36, 44, 45, 55, 289n36, 291–92n44 aligned with Brazil’s interests, 56–57 Arena Corinthians and, 258 Belo Monte dam and, 67, 71, 72, 77 campaign donations and, 275, 284 Carwash and cartel for Petrobras contracts, 51, 270–71 Lula and, 57, 274, 285TK, 293–94n57, 316–17n274 Maracanã stadium and, 226, 227, 238 Olympic Games construction, 274 Olympic Village construction, 283–84 Odebrecht, Emílio, 51, 275 Odebrecht, Marcelo, 58, 76, 202, 273–74, 275, 293–94n57 plea-bargain, noteTK prison sentence, 285TK Odebrecht, Norberto, 291–92n44 OGX Petróleo, 135–36, 144, 145–46, 147, 150, 151–52, 156, 247, 248, 262–64, 303n136, 304n146 auction of assets, 252 auditing of, 152, 245 bankruptcy of, 247, 314n247 bonds sold, 181–82 Carneiro as CEO, 249 cessation of production, 242 CVM investigation and, 248–49, 276, 314n248 efforts to bail out, 220, 222, 223, 240–41 Eike promises to inject cash, 190–91, 241, 249, 308n190 Eike sells stock in, 241 executive luxuries, 215 impact on Eike’s empire, 187, 188 investor losses, 245, 261 investors, 182, 193, 224–25 losses of, 185–88, 189, 215, 224–25 Mendonça as CEO, 216–17 Schlumberger report, 261 stock price and, 186, 241–42 oil production, xv, 15–16, 30, 135–36, 145.
The Little Book of Hedge Funds by Anthony Scaramucci
Andrei Shleifer, asset allocation, Bernie Madoff, business process, carried interest, Credit Default Swap, diversification, diversified portfolio, Donald Trump, Eugene Fama: efficient market hypothesis, fear of failure, fixed income, follow your passion, Gordon Gekko, high net worth, index fund, Long Term Capital Management, mail merge, margin call, merger arbitrage, NetJets, Ponzi scheme, profit motive, quantitative trading / quantitative ﬁnance, random walk, Renaissance Technologies, risk-adjusted returns, risk/return, Ronald Reagan, Saturday Night Live, Sharpe ratio, short selling, Silicon Valley, too big to fail, transaction costs, Vanguard fund, Y2K, Yogi Berra
Based upon that answer, they must then ascertain which money manager possesses the best-equipped toolbox and skill set to help them achieve these objectives and make money. By the way, my friends, back in 1956 Mr. Buffett himself had a hedge fund and operated more than 12 hedge fund partnerships until 1970. Furthermore, is it any more grotesque a fee arrangement than to fly on NetJets, a Berkshire Hathaway subsidiary? Please pass the carrots with the hypocrisy; I need my night vision. As the expression goes, “Let he who is without sin, cast the first stone.” And let hedge fund managers who are incentivized to perform, make the next big trade. In the Words of a Hedge Fund Legend . . .
Execution: The Discipline of Getting Things Done by Larry Bossidy
Albert Einstein, business process, complexity theory, Iridium satellite, Long Term Capital Management, NetJets, shareholder value, six sigma, social software, Socratic dialogue, supply-chain management
A new market segment in the aircraft industry has recently changed the dynamics for manufacturers and suppliers. In the past seven or eight years, as commercial airline service and schedules deteriorated and prices rose, the corporate jet business has taken off. In 1996 Executive Jets pioneered fractional ownership, which is time-sharing in the sky, with its NetJet program. The new segment it created rapidly became the fastest-growing one in the business. Among manufacturers the big winner was Bombardier of Canada, because Bombardier built planes that were right for the market—larger than the ones made by rivals such as Beech Aviation and Cessna and smaller than those of Boeing or McDonnell Douglas, and foreign competitors.
Albert Einstein, Atul Gawande, Benoit Mandelbrot, big-box store, Black Swan, Checklist Manifesto, Clayton Christensen, Daniel Kahneman / Amos Tversky, Exxon Valdez, Gordon Gekko, housing crisis, Isaac Newton, Long Term Capital Management, Mahatma Gandhi, mandelbrot fractal, NetJets, pattern recognition, pre–internet, random walk, Ronald Reagan, South Sea Bubble, Steve Jobs, winner-take-all economy, young professional
Sometimes I would look back at a situation where I had missed some vital clue, shake my head, and say, “How did I not see that?” Mohnish added his own mistakes to the mix. We combined these with some (infrequent) errors that we had seen Buffett and Munger make, including their investments in NetJets, Dexter Shoe Company, and Diversified Retailing—a reminder that retail is a tougher place to make money than most people realize. Buffett, with characteristic candor, confessed in his 2007 letter to shareholders: “To date, Dexter is the worst deal I’ve made. But I’ll make more mistakes in the future—you can bet on that.
affirmative action, Asian financial crisis, Berlin Wall, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Fall of the Berlin Wall, fear of failure, fixed income, Goldman Sachs: Vampire Squid, housing crisis, indoor plumbing, invisible hand, London Interbank Offered Rate, Long Term Capital Management, margin call, market bubble, Mikhail Gorbachev, moral hazard, NetJets, Northern Rock, oil shock, paper trading, risk tolerance, rolodex, Ronald Reagan, savings glut, shareholder value, short selling, sovereign wealth fund, supply-chain management, too big to fail, value at risk, éminence grise
“It’s like the Long Island energy utility trying to buy something in Russia,” he told Barancik. But they promised to do the best they could. 045 Skip McGee, a forty-eight-year-old Texan, commuted to New York every week from Houston to run Lehman’s investment banking operations. He’d board a private plane using the firm’s NetJets account every Sunday evening around 7:30, land in New York around midnight, and take a car to his rental on the Upper West Side. Come Thursday night he’d be on a first-class flight back to Houston on Continental. McGee, a classic, old-school, back-slapping banker, was clearly ambitious. After graduating summa cum laude from Princeton and getting a law degree, he had spent nearly two decades at Lehman, first as a banker for wildcatters in the oil patch of his backyard and then moving up the ranks until he became the head of the entire investment banking division and joined Fuld’s vaunted executive committee.
., after the market had closed. The last thing they could afford was for news of the meeting to leak. Paulson, who usually made the trip to New York on US Airways, which offered a government discount—Wendy had always given him grief about flying in a private jet—arranged to charter a plane to New York, using his NetJets accounts. He couldn’t afford to be delayed; the matter at hand was too important, and the weather was atrocious. If anything, he was worried the plane wouldn’t even be able to take off. As they sped toward Dulles to catch the flight, Paulson, almost inaudibly, said, “God help us.” CHAPTER FOURTEEN Lloyd Blankfein was milling about the greenroom at the Hilton Hotel on Fifty-third Street at Sixth Avenue, waiting to make a speech at the Service Nation Summit, an annual conference coordinated by a coalition Service Nation Summit, an annual conference coordinated by a coalition of nonprofits that promotes volunteerism in America.
The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds by Maneet Ahuja, Myron Scholes, Mohamed El-Erian
Asian financial crisis, asset allocation, asset-backed security, backtesting, Bernie Madoff, Bretton Woods, business process, call centre, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, en.wikipedia.org, family office, fixed income, high net worth, interest rate derivative, Isaac Newton, Long Term Capital Management, Mark Zuckerberg, merger arbitrage, NetJets, oil shock, pattern recognition, Ponzi scheme, quantitative easing, quantitative trading / quantitative ﬁnance, Renaissance Technologies, risk-adjusted returns, risk/return, rolodex, short selling, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, systematic trading
Many leading investors, like Weinstein, are recognized experts in chess, and say an affinity for the game is favored in hiring as games of strategy mirror the strategy of financial decision-making. Photo credit: (c) Hiroko Masuike/The New York Times/Redux Boaz Weinstein (center) alongside Warren Buffett (far left) at the NetJets First Annual Poker Championship in June 2005. Photo credit: Boaz Weinstein