Today, hedge fund bigwigs Bill Ackman and Carl Icahn delivered the most engaging TV smackdown in recent memory on CNBC.
Here's a story about two hedge funders who hate each other. It's also a story about whether or not a multi-billion-dollar nutrient company is actually a pyramid scheme.
Back in December, activist investor Bill Ackman gave the Powerpoint presentation to end all Powerpoint presentations -- it was 342 slides long -- about why he thought Herbalife, a company better known for weight-loss shakes and other assorted non-goodies, was doomed. The 1-slide version of his argument is that its web of distributors make more from recruiting new distributors than they do from actually selling products, making it less an Amway-style legal pyramid scheme, and more an illegal one. Ackman went short the stock -- in other words, he bet its price would go down by selling high and trying to buy low -- and very publicly said he expected it to go to zero.
Betting against a stock is a bit more involved than betting on it, because you can't exactly bet against something you own. Short-sellers have to first borrow the stock, then sell it, and hope to buy it back later at a lower price before returning it to the original owner. It's a risky game -- the stock can only go down so far, but it can go up an unlimited amount -- and Ackman seems to be playing a particularly risky version of it. He's short roughly 20 percent of the outstanding shares, which means he'll have a lot of stock to buy back that he might have trouble finding if, say, the price goes up and he tries to cut his losses.
That brings us to the billionaire battle. Activist investors aren't always the best of friends, and that's certainly the case when it comes to Carl Icahn and Bill Ackman. The two of them fought a seven-year legal battle over whether Icahn owed Ackman $4.5 million, a relative pittance in the rarefied air of Hedgistan, from the 2004 merger-sale of a real estate company -- a battle that Ackman ultimately won. That bad blood has carried over to Herbalife. Icahn thinks Ackman is just using his big media profile to make an easy buck manipulating the stock down, and that he's doing so in a way that could leave him very exposed. If other investors buy the stock for the express purpose of hurting his trade, Ackman might have to cover his large short position, which would send the stock racing up in a so-called "short-squeeze". Now, it's not clear Icahn is doing this ... but it certainly seems like a good bet.
Another good bet is that watching the two of them got at it on live television would be magical. It was. CNBC had the pair on, as you can see in the video below, and Icahn did not disappoint. This was tough, but here are his seven craziest quotes.
"I want to say what I want to say, and I'm not going to talk about my Herbalife position because you want to bully me ... So let's start with what I want to say. Ackman is a liar."
Discourse even more elevated.
"He wanted to have dinner once with me, and I had dinner with me. And I'll tell you, I laughed. I couldn't figure out if he was the sanctimonious guy I ever met in my life or the most arrogant."
Do these have to be mutually exclusive?
"I wouldn't have an investment with Ackman if you paid me to do it; if Ackman paid me to do it .... As far as I'm concerned, the guy is a major loser. You know, Disraeli once said, Disraeli once said about somebody that spoke in the Parliament, a young guy that spoke in the Parliament, 'Young man, I'd be happy if I could be as sure about one thing in my life as you are sure of everything.'"
"Ackman did it, look at the timing. Ackman did it with a week to go, or a month to go before he had to show his results. His results were bad for 2012, and this got his results up double, so he could get fees for himself. And then he talks about [giving these profits to] charity. That's complete bulls***."
Oops, live TV!
"I never said that I want to be friends with you Bill. I wouldn't be friends with you. And you said to me, you'd like to be friends so we could invest together .... I wouldn't invest with you if you were the last man on earth."
"I appreciate, Bill, that you called me a great investor. I thank you for that. Unfortunately, I can't say the same for you."
Give this man a mic to drop.
Okay, that was fun, but it's time for a serious point. Markets are mostly efficient, except when they're not. As Keynes, who knew a thing or two about picking stocks, pointed out, the market can be a bit like a newspaper beauty contest where you pick the six prettiest faces from a list of 100, and the winner is the one whose picks come closest to the most popular of the combined picks. But this means your optimal strategy is picking the faces you think other people think are the prettiest, not the ones you think are the prettiest. In other words, you're betting based on the crowd, and not the "fundamentals". It's the same with stocks, even before we consider hedge fund billionaires using a nutrient supplement company's stock to settle their grudge match.
Or, as Disraeli might have said, there are lies, damn lies, and efficient markets.
"[Ackman's] like the crybaby in the schoolyard. You know, I went to a tough school in Queens, and they used to beat up the little Jewish boys. And [Ackman] was like one of these little Jewish boys, crying that the world was taking advantage of him."
How much do you really need to say to put a sentence together?
Just as fish presumably don’t know they’re wet, many English speakers don’t know that the way their language works is just one of endless ways it could have come out. It’s easy to think that what one’s native language puts words to, and how, reflects the fundamentals of reality.
But languages are strikingly different in the level of detail they require a speaker to provide in order to put a sentence together. In English, for example, here’s a simple sentence that comes to my mind for rather specific reasons related to having small children: “The father said ‘Come here!’” This statement specifies that there is a father, that he conducted the action of speaking in the past, and that he indicated the child should approach him at the location “here.” What else would a language need to do?
On both sides of the Atlantic—in the United Kingdom and the United States—political parties are realigning and voters’ allegiances are shifting.
When United Kingdom voters last week narrowly approved a referendum to leave the European Union, they underscored again how an era of unrelenting economic and demographic change is shifting the axis of politics across much of the industrialized world from class to culture.
Contrary to much initial speculation, the victory for the U.K. leave campaign didn’t point toward victory in the U.S. presidential election for Donald Trump, who is voicing very similar arguments against globalization and immigration; The British results, in fact, underscored the obstacles facing his agenda of defensive nationalism in the vastly more diverse U.S. electorate.
But the Brexit referendum did crystallize deepening cultural fault lines in U.K. politics that are also likely to shape the contest between Trump and Hillary Clinton. In that way, the results prefigure both a continuing long-term realignment in the electoral base of each American party—and a possible near-term reshuffle of the tipping-point states in presidential politics.
It happened gradually—and until the U.S. figures out how to treat the problem, it will only get worse.
It’s 2020, four years from now. The campaign is under way to succeed the president, who is retiring after a single wretched term. Voters are angrier than ever—at politicians, at compromisers, at the establishment. Congress and the White House seem incapable of working together on anything, even when their interests align. With lawmaking at a standstill, the president’s use of executive orders and regulatory discretion has reached a level that Congress views as dictatorial—not that Congress can do anything about it, except file lawsuits that the divided Supreme Court, its three vacancies unfilled, has been unable to resolve.
On Capitol Hill, Speaker Paul Ryan resigned after proving unable to pass a budget, or much else. The House burned through two more speakers and one “acting” speaker, a job invented following four speakerless months. The Senate, meanwhile, is tied in knots by wannabe presidents and aspiring talk-show hosts, who use the chamber as a social-media platform to build their brands by obstructing—well, everything. The Defense Department is among hundreds of agencies that have not been reauthorized, the government has shut down three times, and, yes, it finally happened: The United States briefly defaulted on the national debt, precipitating a market collapse and an economic downturn. No one wanted that outcome, but no one was able to prevent it.
They say religious discrimination against Christians is as big a problem as discrimination against other groups.
Many, many Christians believe they are subject to religious discrimination in the United States. A new report from the Public Religion Research Institute and Brookings offers evidence: Almost half of Americans say discrimination against Christians is as big of a problem as discrimination against other groups, including blacks and minorities. Three-quarters of Republicans and Trump supporters said this, and so did nearly eight out of 10 white evangelical Protestants. Of the latter group, six in 10 believe that although America once was a Christian nation, it is no longer—a huge jump from 2012.
Polling data can be split up in a million different ways. It’s possible to sort by ethnicity, age, political party, and more. The benefit of sorting by religion, though, is that it highlights people’s beliefs: the way their ideological and spiritual convictions shape their self-understanding. This survey suggests that race is not enough to explain the sense of loss some white Americans seem to feel about their country, although it’s part of the story; the same is true of age, education level, and political affiliation. People’s beliefs seem to have a distinctive bearing on how they view changes in American culture, politics, and law—and whether they feel threatened. No group is more likely to express this fear than conservative Christians.
American-Indian cooking has all the makings of a culinary trend, but it’s been limited by many diners’ unfamiliarity with its dishes and its loaded history.
DENVER—In 2010, the restaurateur Matt Chandra told The Atlantic that the Native American restaurant he and business partner Ben Jacobs had just opened would have 13 locations “in the near future.” But six years later, just one other outpost of their fast-casual restaurant, Tocabe, is up and running.
In the last decade, at least a handful of articles predicted that Native American food would soon see wider reach and recognition. “From the acclaimed Kai restaurant in Phoenix to Fernando and Marlene Divina's James Beard Award-winning cookbook, Foods of the Americas, to the White Earth Land Recovery Project, which sells traditional foods like wild rice and hominy, this long-overlooked cuisine is slowly gaining traction in the broader culinary landscape,” wrote Katie Robbins in her Atlantic piece. “[T]he indigenous food movement is rapidly gaining momentum in the restaurant world,” proclaimed Mic in the fall of 2014. This optimism sounds reasonable enough: The shift in the restaurant world toward more locally sourced ingredients and foraging dovetails nicely with the hallmarks of Native cuisine, which is often focused on using local crops or herds. Yet while there are a few Native American restaurants in the U.S. (there’s no exact count), the predicted rise hasn’t really happened, at least not to the point where most Americans are familiar with Native American foods or restaurants.
As it’s moved beyond the George R.R. Martin novels, the series has evolved both for better and for worse.
Well, that was more like it. Sunday night’s Game of Thrones finale, “The Winds of Winter,” was the best episode of the season—the best, perhaps, in a few seasons. It was packed full of major developments—bye, bye, Baelor; hello, Dany’s fleet—but still found the time for some quieter moments, such as Tyrion’s touching acceptance of the role of Hand of the Queen. I was out of town last week and thus unable to take my usual seat at our Game of Thrones roundtable. But I did have some closing thoughts about what the episode—and season six in general—told us about how the show has evolved.
Last season, viewers got a limited taste—principally in the storylines in the North—of how the show would be different once showrunners Benioff and Weiss ran out of material from George R.R. Martin’s novels and had to set out on their own. But it was this season in which that exception truly became the norm. Though Martin long ago supplied Benioff and Weiss with a general narrative blueprint of the major arcs of the story, they can no longer rely on the books scene by scene. Game of Thrones is truly their show now. And thanks to changes in pacing, character development, and plot streamlining, it’s also a markedly different show from the one we watched in seasons one through four—for the worse and, to some degree, for the better.
University leaders and observers discuss the intersection of student protests, free speech and academic freedom.
In a Thursday debate titled “Academic Freedom, Safe Spaces, Dissent, and Dignity,” faculty or administrators from Yale, Wesleyan, Mizzou, and the University of Chicago discussed last semester’s student protests and their intersection with free speech. They shared the stage at the Aspen Ideas Festival, co-hosted by the Aspen Institute and The Atlantic, with Jonathan Greenblatt of the Anti-Defamation League; Kirsten Powers, author of The Silencing: How the Left Is Killing Free Speech; and Greg Lukianoff, who leads the Foundation for Individual Rights in Education.
My colleague Jeffrey Goldberg was the moderator.
The most interesting exchange involved Stephen Carter, a law professor at Yale, and Michael S. Roth, the president of Wesleyan University.
In an era fixated with science, technology, and data, the humanities are in decline. They’re more vital than ever.
Earlier this month, the Washington Post journalist Jeff Guo wrote a detailed account of how he’d managed to maximize the efficiency of his cultural consumption. “I have a habit that horrifies most people,” he wrote. “I watch television and films in fast forward … the time savings are enormous. Four episodes of Unbreakable Kimmy Schmidt fit into an hour. An entire season of Game of Thrones goes down on the bus ride from D.C. to New York.”
Guo’s method, which he admits has ruined his ability to watch TV and movies in real time, encapsulates how technology has allowed many people to accelerate the pace of their daily routines. But is faster always better when it comes to art? In a conversation at the Aspen Ideas Festival, co-sponsored by the Aspen Institute and The Atlantic, Drew Gilpin Faust, the president of Harvard University, and the cultural critic Leon Wieseltier agreed that true study and appreciation of the humanities is rooted in slowness—in the kind of deliberate education that can be accrued over a lifetime. While this can seem almost antithetical at times to the pace of modern life, and as subjects like art, philosophy, and literature face steep declines in enrollment at academic institutions in the U.S., both argued that studying the humanities is vital for the ways in which it teaches us how to be human.
He told me he always wanted to be recognized as a great player. But his harassment of Jackie Robinson will now forever define his place in history—as is fair.
In 1979, having graduated the University of Alabama with no ambition more worthwhile than becoming a sportswriter, I had occasion to meet Ben Chapman—the "Alabama Flash," as we knew him—during a college baseball game at Rickwood Field in Birmingham.
"You ought to come over and interview me sometime," he said. "I'll tell ya some stories."
"I'll bet you could," I thought to myself. I knew Chapman only by reputation. He had been a pretty good ballplayer on the Ruth-Gehrig Yankees and then later with several other teams, but he was remembered for his savage heckling of Jackie Robinson in Robinson's first year in the major leagues, 1947, when Chapman was manager of the Philadelphia Phillies. Chapman was 71 and gray-haired when I met him, but he looked younger, and very fit—unlike most former big leaguers I've encountered over my career.