dcollon
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Posts posted by dcollon
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Gio,
I'm glad you were able to watch it. He was a lot funnier than I thought he would be. It was the first time I had seen him present in person.
I hope you had a chance to watch some of the other presentations as well.
Take care,
David
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SoGen: Dylan Grice
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Albert Edwards
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You guys will like Nate's book if you enjoy thinking about statistics (baseball, politics, stocks are just a few of the focuses). I had originally started following Nate's political blog/commentary in the NYT and saw how right his predictions were during the elections (both mid-term and presidential), so I figured I had to read the book.
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He's got a Bloomberg on that desk Sanjeev, so he's not that cheap. ;)
Great pictures Gio.
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They had an A rating, which was always important to them. I don't understand why based on the lines that they were involved with over time. However, every time we met with management they mentioned it. There is plenty of capital that Fairfax will be able to free up.
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Fairfax Financial (FFH.CN) to acquire American Safety Insurance Holdings for $29.25/sh in cash
Monday, June 03, 2013 01:04:50 PM (GMT)
Fairfax Financial Holdings Limited (FFH.CN) and American Safety Insurance Holdings, Ltd. (ASI) announced that Fairfax and American Safety have entered into a merger agreement pursuant to which Fairfax will acquire all of the outstanding shares of American Safety common stock. American Safety stockholders will receive $29.25 per share in cash, representing an aggregate transaction value of approximately $306M. The price represents a premium of 22.1% to the closing price of American Safety common stock on 31-May-13, the last trading day prior to this announcement. The transaction is expected to close in Q4 of 2013.
The board of American Safety, after unanimously determining that the merger is in the best interest of American Safety and its stockholders, unanimously approved the merger agreement and resolved to recommend that American Safety's stockholders vote to approve the merger.
Certain of the directors and executive officers of American Safety, who beneficially own approximately 10% of the outstanding shares of American Safety common stock, have agreed to vote their shares in favor of the merger.
The transaction is subject to customary conditions, including approval by American Safety's stockholders and regulatory approvals. There is no financing condition to consummate the transaction.
Concurrent with the execution of the merger agreement with American Safety, Fairfax entered into a purchase and sale agreement with Tower Group International, Ltd. pursuant to which Fairfax agreed to sell the Bermuda subsidiary, American Safety Reinsurance, Ltd. promptly upon acquiring it from American Safety. Such transaction is subject to customary conditions including regulatory approvals.
The acquisition is expected to be financed using internal resources and is not expected to require Fairfax holding company cash. Fairfax expects several of the American Safety specialty lines groups to move to Crum & Forster and Hudson. The acquisition is expected to provide the Fairfax group with $480M of additional investable assets.
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I just read the following headline and thought it fit well within this thread...unbelievable.
Priceline (PCLN) announced the pricing of $1 billion principal amount of Convertible Senior Notes due 2020.
The notes will pay semiannually at the astonishing rate of 0.35%. Notes may be converted into cash up to their principal amount, and into shares of PCLN stock based on a conversion rate of 0.7604 shares of common stock per $1,000 principal amount.
The conversion price of approximately $1,315.10 per share, represented a 66% premium based on the closing price of $792.27 per share on May 29, 2013).
If the underwriters' overallotment is fully exercised an additional $150 MM in notes will be issued. At 35-basis points, the buy back of shares with the bond proceeds will be immediately accretive to EPS.
As of 1:38 pm EDT PCLN was up $15.28 @ $807.55 /share.
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I thought Joy Global had some interesting, but brief, comments on global growth/supply of materials in their earnings release this morning.
http://investors.joyglobal.com/releasedetail.cfm?ReleaseID=768021
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This is potentially biased, since it's published by the Association of Oil Pipelines, but it's their opinion.
http://www.aopl.org/aboutPipelines/
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hyten1,
I think some of them are getting interesting (RWT & WMC would be two). Obviously, the big question is dependent on each companies business model and structure. In addition, then we have to guess what the fed and the yield curve are going to do to spreads and volume.
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James,
I don't have specific data on any follow ups, but I thought this article was interesting.
http://online.wsj.com/article/SB10001424127887323463704578497003961136978.html
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Gio,
I enjoyed that interview. Thanks for posting it.
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From WSJ. Prosecutors considering using RICO strategy
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JEast,
This is the man that bought it http://en.wikipedia.org/wiki/Manuel_Moroun.
Here's a brief comment from Forbes article:
The Ambassador was privately built in 1929 by a palm reader turned financier, Joseph Bower. It became publicly held when Bower put his company, Detroit International Bridge Co., into bankruptcy in the Depression and issued stock as part of a reorganization. In the late 1970s the sage investor Warren Buffett acquired 25% of the stock, emboldening Moroun to act. In 1979 he used his small trucking company’s credit line to buy out Buffett and acquire the rest of the company for a total of $30 million. Thus it became the only major U.S.-Canada crossing that is privately owned. The bridge’s likely worth today:half a billion dollars or more.
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I just finished the Shipping Man and really enjoyed the story. I would recommend it to anyone that has an interest in the shipping business, not because of technical knowledge that you will gain, but because the author tells a great story.
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Netnet,
I have attached a speech, but I'm not sure if it's the one you are looking for, if not I apologize.
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I'm really enjoying this book. It's a lot of history, but I have enjoyed learning even more about the origins and original structure of AIG.
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Not really "macro", but Jason Zweig comments on Markets and Memory Banks
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Interesting situation here...
Fitch: Fannie's Earnings, Dividend to Complicate GSE Reform
Friday, May 10, 2013 02:30:00 PM (GMT)
Fannie Mae's strong first quarter financial results and its planned $59.4 billion dividend payment to the U.S. Treasury will likely complicate efforts to pursue far-reaching GSE reform, according to Fitch Ratings. Better operating trends at both Fannie Mae and Freddie Mac, driven by continued healing in the housing market and the growing role of recent-vintage mortgages, will likely further reduce pressure on Congress to overhaul the U.S. housing finance system.
The political motivation to overhaul the GSEs and the broader mortgage market remains limited. With the point where taxpayers are effectively made whole on their investment in GSEs now in sight, we believe broad reform will become more challenging to achieve. The Federal Housing Finance Agency has recently undertaken some initiatives to reduce Fannie and Freddie's dominance in the housing market. However, GSEs have been operating under conservatorship for close to five years and continue to dominate the market.
A one-time accounting adjustment, the reversal of a $50.6 billion deferred tax asset (DTA) allowance, drove the bulk of Fannie Mae's first quarter net income of $58.7 billion. The increase in net worth to $62.4 billion requires Fannie to pay a significantly higher dividend to the Treasury under the terms of the amended support agreement. The GSE plans to fund the payment with proceeds from debt issuance.
We think this incremental debt is manageable within the context of Fannie's balance sheet and the debt limit set out in the senior preferred-stock purchase agreement. Fannie's debt was $144 billion below the limit on March 31.
Fannie will make a cash dividend payment of $59.4 billion to the Treasury by June 30. After that payment, total dividends paid by Fannie will represent 81% of its cumulative draw from the Treasury. We believe the cumulative dividends paid by Fannie could exceed the $117 billion in senior preferred stock owned by the Treasury by late this year or early 2014, based on the current earnings run-rate.
Freddie Mac continues to evaluate its DTA allowance, but Fitch believes it will likely follow suit and reverse its $30 billion reserve in the coming quarters, as its financial performance has also improved significantly over the past year. As a result, it would also pay a substantially higher dividend to Treasury. The dividends do not technically reduce the $187 billion injected into the GSEs by the Treasury. However, both entities will have paid cumulative dividends representing over 80% of the Treasury's investment, once Freddie Mac reverses its DTA allowance.
Excluding the impact of the large DTA reversal, Fannie's pretax earnings for the first quarter were strong at $8.1 billion. Results were supported by an increase in net interest income and continued improvement in credit quality. As a result of the Bank of America settlement completed in the first quarter, Fannie recorded a one-time benefit to net interest income. Excluding this benefit, Fannie's core earnings results for the first quarter were largely consistent with fourth-quarter 2012 results.
As asset quality improved, Fannie reduced its total loss reserves by $2.4 billion during the quarter. The serious delinquency rate dropped to 3.02% at March 31, compared with 3.29% at year-end 2012. Net sales prices for REO also rose as the housing market recovery continued in the quarter.
We do not expect the reversals in the DTA allowance for Fannie Mae -- or the potential reversal for Freddie Mac -- to have an impact on ratings for either entity. The ratings are directly linked to the U.S. sovereign rating based on the U.S. government's direct financial support.
For a detailed review of the outlook for the GSEs and reform options, see "U.S. Housing Finance GSEs" Where to From Here?," dated Feb. 28, 2013, at www.fitchratings.com.
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Michael Price recent presentation
in General Discussion
Posted
I always enjoy listening to Mr. Price. Thanks for sharing the video and I completely agree...great book.