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."
Delegates in Cleveland answer a nightmare question: Would they take four more years of Barack Obama over a Hillary Clinton presidency?
CLEVELAND—It was a question no Republican here wanted to contemplate.
The query alone elicited winces, scoffs, and more than a couple threats of suicide. “I would choose to shoot myself,” one delegate from Texas replied. “You want cancer or a heart attack?” cracked another from North Carolina.
Hillary Clinton and Barack Obama have each been objects of near histrionic derision from Republicans for years (decades in Clinton’s case), but never more so than during the four days of the GOP’s national convention. Republicans onstage at Quicken Loans Arena and in the dozens of accompanying events have accused President Obama of literally destroying the country in his eight years in the White House. Speakers and delegates subjected Clinton to even harsher rhetoric, charging her with complicity in death and mayhem and then repeatedly chanting, “Lock her up!” from the convention floor.
Biology textbooks tell us that lichens are alliances between two organisms—a fungus and an alga. They are wrong.
In 1995, if you had told Toby Spribille that he’d eventually overthrow a scientific idea that’s been the stuff of textbooks for 150 years, he would have laughed at you. Back then, his life seemed constrained to a very different path. He was raised in a Montana trailer park, and home-schooled by what he now describes as a “fundamentalist cult.” At a young age, he fell in love with science, but had no way of feeding that love. He longed to break away from his roots and get a proper education.
At 19, he got a job at a local forestry service. Within a few years, he had earned enough to leave home. His meager savings and non-existent grades meant that no American university would take him, so Spribille looked to Europe.
It’s known as a modern-day hub of progressivism, but its past is one of exclusion.
PORTLAND, Ore.— Victor Pierce has worked on the assembly line of a Daimler Trucks North America plant here since 1994. But he says that in recent years he’s experienced things that seem straight out of another time. White co-workers have challenged him to fights, mounted “hangman’s nooses” around the factory, referred to him as “boy” on a daily basis, sabotaged his work station by hiding his tools, carved swastikas in the bathroom, and written the word “nigger” on walls in the factory, according to allegations filed in a complaint to the Multnomah County Circuit Court in February of 2015.
Pierce is one of six African Americans working in the Portland plant whom the lawyer Mark Morrell is representing in a series of lawsuits against Daimler Trucks North America. The cases have been combined and a trial is scheduled for January of 2017.
Taking over Stephen Colbert’s Late Show to blast Fox News, the former ‘Daily Show’ host was unapologetically partisan while also seeking to build bridges.
There are so many things that make this election season one without precedent. Why, then, has a faction of late-night punditworld responded with a reversion? Earlier this week, Stephen Colbert resurrected his satirical “Stephen Colbert” character, and then, last night, he invited the retired Jon Stewart to take over his Late Night desk for a classic 10-minute Daily Show rant. The biggest shock: The routines have felt vital and fresh, not mere nostalgia bait or retreads.
The reason for the throwback to golden-years Comedy Central fake news probably lies in politics itself. Stewart’s and Colbert’s original heydays were during the George W. Bush era; their entire personas are based not on indiscriminately satirizing the entire world’s absurdities but rather the particular absurdities of America’s right wing. Under Obama, that meant a certain amount of punching down. Donald Trump’s Republican National Convention, though, offered an even more unvarnished display of popular conservative thinking, attitudes, opinions, and bluster to hold America’s attention than, well, the last RNC. Colbert’s retitled program this week conveyed his glee at the prospect: “The 2016 Trumpublican Donational Conventrump Starring Donald Trump as the Republican Party* *May Contain Traces of Republican.” (His comparatively deflated DNC title: “The 2016 Democratic National Convincing, A Technically Historic Event: Death. Taxes. Hillary.”)
This week, the co-author of Donald Trump’s autobiography said in The New Yorker that if he were writing The Art of the Deal today, it would be a very different book with a very different title: The Sociopath.
To title a person’s life story with that label is a serious accusation, and one worth considering. The stakes are high. Tony Schwartz, the writer of the best-selling book, said that he “genuinely believe[s] that if Trump wins and gets the nuclear codes, there is an excellent possibility it will lead to the end of civilization.” In that light, Schwartz said he feels “deep remorse” at having “put lipstick on a pig.”
That seemed to me to be something of a contradiction to the charge of sociopathy, as pigs have been found to show signs of empathy. If you call a pig by name, it will come and play with you, reciprocating affection like a dog. So which is it, pig or sociopath?
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
Fractured by internal conflict and foreign intervention for centuries, Afghanistan made several tentative steps toward modernization in the mid-20th century. In the 1950s and 1960s, some of the biggest strides were made toward a more liberal and westernized lifestyle, while trying to maintain a respect for more conservative factions. Though officially a neutral nation, Afghanistan was courted and influenced by the U.S. and Soviet Union during the Cold War, accepting Soviet machinery and weapons, and U.S. financial aid. This time was a brief, relatively peaceful era, when modern buildings were constructed in Kabul alongside older traditional mud structures, when burqas became optional for a time, and the country appeared to be on a path toward a more open, prosperous society. Progress was halted in the 1970s, as a series of bloody coups, invasions, and civil wars began, continuing to this day, reversing almost all of the steps toward modernization taken in the 50s and 60s. Keep in mind, when looking at these images, that the average life expectancy for Afghans born in 1960 was 31, so the vast majority of those pictured have likely passed on since.
One day in February 2009, a 13-year-old boy named Sasha Egger started thinking that people were coming to hurt his family. His mother, Helen, watched with mounting panic that evening as her previously healthy son forgot the rules to Uno, his favorite card game, while playing it. She began making frantic phone calls the next morning. By then, Sasha was shuffling aimlessly around the yard, shredding paper and stuffing it in his pockets. “He looked like an old person with dementia,” Helen later told me.
That afternoon, Sasha was admitted to the hospital, where he saw a series of specialists. One thought Sasha might have bipolar disorder and put him on antipsychotics, but the drugs didn’t help. Helen, a child psychiatrist at Duke University, knew that psychiatric conditions develop gradually. Sasha’s symptoms had appeared almost overnight, and some of them—including dilated pupils and slurred speech—suggested not mental illness but neurological dysfunction. When she and her husband, Daniel, raised these issues, though, one doctor seemed to think they were in denial.
Over its two-decade history, the British comedy has made an absurd comic spectacle out of the inevitability of women aging.
The 1990s were something of a golden decade for portrayals of women segueing angstily into middle age, Smirnoff bottle in one hand, self-help book in the other. In 1995, CBS premiered Cybill, a zingy sitcom starring Cybill Shepherd as a twice-divorced actress facing the twilight of her mediocre Hollywood career with the help of her best friend Maryann (Christine Baranski), a fabulously wealthy, comically drunken divorcee. In 1996, Helen Fielding published Bridget Jones’s Diary, the first-person account of a hapless, luckless 30-something who subsists on Chardonnay, Marlboro Lights, and cheese while pratfalling from one public shaming to another. But before either of those, all the way back in 1992, there was Absolutely Fabulous.
In his speech to the Republican National Convention, the presidential nominee revealed a deeply flawed political strategy.
Donald Trump’s supporters yearn for the country as it was and fear the country as it is. Tonight’s powerfully dystopian Trump nomination acceptance address will touch them at their deepest emotional core. It will ignite a passionate spasm of assent from those many, many Americans—mostly but not exclusively white, mostly but not exclusively less affluent and educated—who experience today as worse than yesterday, and anticipate a tomorrow worse than today.
Don’t think it won’t work. It will work. The speech will be viewed and viewed again, on cable news and social media. The travails and troubles of this dysfunctional convention will recede, even if their implications and consequences linger. Trump’s poll numbers will probably rise. Small-dollar donations will surely flow. Many wavering Republicans will come home—even if the home to which they now return has changed in ways that render it almost indistinguishable from the dwelling it used to be.