Peter Lattman at The Wall Street Journal has nailed the banker’s motto: “In Cerberus we trust.” Remember when bankers were steely eyed, risk averse curmudgeons who would only lend money to those who didn’t need it? Hah, that was before the days of fee based income, monster annual bonuses and surgically enhanced trophy brides. “More than 40 elite investors from Citigroup Inc.to Third Point LLC put up at least $12 billion of the roughly $15 billion used to fund Cerberus Capital Management’s acquisitions of Chrysler LLC and GMAC Financial Services. Most even agreed to pay a fee for the privilege.” What a hangover. The banks are said to have already written off over $5 billion on those deals, and it ain’t over. “Cerberus long honed a reputation for buying companies others had left for dead”, and for doing so with other people’s money. “The firm boasts to its own backers how little of its $27 billion portfolio is allocated to the two deals — less than 5%. In his most recent letter to Cerberus investors, Mr. Feinberg didn’t even mention Chrysler or GMAC by name.” Never ones to let reality intrude, “investors have marked GMAC to about 50 cents on the dollar and Chrysler to about 75 cents on the dollar.” But hey, buying Chrysler was never about making money, that deal was pitched as a matter of “patriotic dut.” Hedge funds and bankers, the last real American patriots, right?
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I can assure you that John W. Snow, Chariman of Cerberus, never did a daggone thing that wasn’t done to personally benefit John W. Snow.
@rpol35:
Now that’s just not true. When he went to China as the U.S. Treasury Secretary (a position he surely earned) and embarrassed us, that wasn’t JUST to benefit John Snow. It was also to … well I have no idea.
You can read about his stupidity from the Cato Institute.
Justin:
I was thinking more along the lines of the $77 MM severance check he wrote himself when he left CSX after “W” tapped him to be Secretary of $$$. I think he referred to it in his Senate hearing as “standard corporate stuff” or words to that effect.
I already knew he was an imbecile; China was another way for him to assuage his Grand Canyon sized ego but thanks for the link.
I thought that at Cerberus it is Feinberg who is Big Kahoona. At least he is the founder of the Fund and conductor on all big deals. I was under impression that Snow was sort of “show girl”.