Unstructured Finance

Pacino, Papandreou, Panetta, Paulson: Welcome to SALT 2013

The SkyBridge Alternatives Conference – the annual hedge fund blowout better known as SALT, is a month away. And the official agenda for the three-day bacchanal, which sees thousands of hedge fund investors, allocators and hedge fund hangers-on descend on Las Vegas in the second week of May, has been released.

Many regular SALT-goers will tell you, of course, that as the event has grown in popularity its official agenda has become but one part of the conference. A sideshow to goings-on inside the Bellagio are the unofficial meetings going on outside, in the hotel’s poolside cabanas.

But SALT gate-crashers – a growing group of people who don’t pay for tickets to the conference but rock up to the Bellagio to network poolside with SALT’s paying guests – will be disappointed to know that the cabanas are a costly and official part of the event this year. The bungalows were all scooped up by SALT organizers, according two people familiar with the plans, and offered to guests for $20,000 for duration of the conference, as part of a sponsorship package that includes branding and passes to attend the event.

Anthony Scaramucci, who’s fund of hedge fund firm Skybridge puts on the conference, recruits some of the best known names in the $2 trillion hedge fund industry to speak at the event, as well as big-ticket political figures like George W. Bush. This year’s list of international headliners includes former Prime Minister of Greece George Papandreou and former French president Nicolas Sarkozy. There’s also a fireside chat between former Israeli leader Ehud Barak and Leon Panetta, ex-U.S Defense Secretary and ex-Director of the CIA.

And Hollywood is coming to hedge fund land this year. Al Pacino and director Oliver Stone are both speaking. (Scaramucci has a link to both – he is an executive producer on an upcoming Pacino movie, and he consulted on Stone’s sequel to Wall Street, 2010′s Money Never Sleeps).

Goldman’s road to Wellsness

Most free marketers are happy to overlook a certain amount of outsmartiness from investment banks. After all, these are the rocket scientists who made mountains of cash by piling multiple levels of risk on dodgy investments and calling them hedges. Sure, such alchemy blew up in many a face, but the logic behind the free market does have a role to play here. Shorting synthetic CDOs would have ultimately helped force the market to recognize how much hot air was behind the subprime-fueled boom. But by not disclosing a mechanism built to fail — the Abacus CDO in question — Goldman Sachs may have taken too deep a bite out of the hand that feeds it.

When companies are being investigated by the SEC, they get a Wells Notice. They usually tell the markets when they get one. It’s a disclosure thing — you need to be upfront with the market about information that could be material to your results. There is no crime in not telling markets that you’ve received a Wells Notice, so long as the information is not material. But Goldman’s share price is tumbling, and even if it wins its battle with the SEC, Goldman could face angry shareholder charges for not revealing much sooner that it faced potential civil liability.

In those corners of the markets so consumed with conspiracy theory, it’s hard not to notice how close the timing of the charges comes to the debate on Capitol Hill about financial regulatory reform. On CNBC this morning, Democratic Senator Barney Frank dissed the idea of a conspiracy, as he would have been expected to do, but he admitted that the timing of the Goldman explosion helps Democrats’ chances of getting legislation through Congress.

Goldman draws bailout critic’s ire

Goldman SachsFirst Bill Perkins likened the architects of the $700 billion U.S. bailout to communists. Now the Houston-based venture capitalist is going after the capitalists.

In his latest full-page ad in the New York Times, Perkins raises a question about the propriety of Goldman Sachs buying the majority of Constellation Energy’s London-based commodities business.

“Question #1: Does anyone else find it troubling that a government bailed out bank (Goldman Sachs) is buying a European Energy Speculation Outfit? It’s your money!!!”

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