Burke’s Peerage Pyongyang Edition

Korean Central News Agency, via Reuters

Kim Jong-un the son of Kim Jong-il and grandson of Kim Il-sung and newly appointed successor to the North Korean leadership (his stepbrother Kim Jong-nam was passed over when he was caught trying to visit Tokyo’s Disney World), may have learned some lessons from Fiorello Laguardia, the legendary mayor of New York who read comics to children over the radio during a time when his country, like North Korea, was under fire (and to whom Kim Jong-un, also pudgy and diminutive bears a slight resemblance). Like his ill-fated stepbrother, Kim Jong-un also likes Disney, but he expropriated Disney characters to curry popular support and also undoubtedly to cheer up Pyongyangians the way Laguardia once lifted the spirits of New Yorkers. Jong-un also got hooked up according to a front page piece in the Times (“That Mystery Woman in North Korea? Turns Out She’s First Lady,” NYT, 7/25/12).  Ri Sol-ju is the lucky young lady and what better morale builder could the young leader have, particularly in the light of his last failed rocket launch, which has caused some commentators to question his virility (“North Korea’s Performance Anxiety,” NYT, 5/5/12)? Sol-ju according to the Times was spotted wearing “a trim black suit in the Chanel tradition” and she showed up at “the inauguration of an amusement park” in a “fashionable polka-dot jacket.” The Times piece cites “analysts” who claim that “Ms. Ri’s fashion sense…appears to be part of the building of a youthful new image; for years North Korean women were pictured only in traditional billowing dresses or Mao-style work clothes.” Sound like the difference between Mamie Eisenhower and Jackie Kennedy? In any case, the marriage naturally makes one think about the next heir to the dynasty and what his name will be. First name has to be Kim, but after that all bets are off. If you take the “un” literally, the dauphin could be Kim Jong-deux. There is no doubt that the prospect of a new heir is a naming opportunity which could bring needed revenue into coffers of the impoverished country. For instance someone like the hedge fund operator Boaz Weinstein, who held the profitable side of the infamous London Whale, might prefer to have a child named after him rather than a hospital wing. Kim Jong-Weinstein? It’s sonorous enough, but might be too Jewish sounding for a future leader of the DPRK (Democratic People’s Republic of Korea).

La Comedie Humaine

The recent sale of the apartment occupied by Huguette M. Clark at 907 Fifth reads like a Balzac novel. Clark who actually spent the last years of her life in a special suite of rooms at Beth Israel Medical Center was the inheritor of a copper fortune and left according to the Times “a $400 million estate, two contested wills and no direct heirs.” (“Big Ticket/ Sold for $25.5 Million," NYT, 7/20/12) The apartment 12W was bought by Boaz Weinstein, the Hedge fund trader who held the other side of the now infamous London Whale in which JP Morgan’s lost its shirt. In the light of the continued problems with the trade (on which Weinstein undoubtedly profited handsomely) and the Libor scandal (in which JP Morgan was also implicated) the Times ran a front page picture of the once highly touted and now beleaguered JP Morgan chairman Jamie Dimon. Fortunes come and go as do major Manhattan residences. Recently the 15 CPW penthouse of former Citibank honcho Sandy Weill was sold to another heiress Ekaterina Rybolovlev, the daughter of the Russian potash billionaire, Dimitry Rybolovlev (whose mines have created sinkholes in the town of Berezniki) for a record breaking $88 million—which makes the $25.5 million Weinstein paid for his place at 907 Fifth seem like a pittance.  Actually Huguette Clark owned two other apartments in 907, 8E and 8W. As the Times also reported  Quatar’s Sheik Hamad bin Jaber al-Thani's $31 million offer for these “was turned down by the co-op board  because he wished to combine them.” Could the co op board’s fear about the residual effects of Arab spring have had an effect on the rejection? Balzac would have undoubtedly been fascinated by the lineage of acquisition with respect  to all three of Clark’s apartments and how they came to reflect the politics and economics of their time. But he would also have been interested in the mysterious inhabitant of these auspicious residences and how and why she recused herself from history.

The Hunch, the Pounce and the Kill

If there were a genre called business science fiction and fantasy (a mixture of Philip K. Dick and Malcolm Gladwell), then Azam Ahmed’s recent Times story about the infamous trade that put JP Morgan in the hole for a cool 2 billion and climbing (“The Hunch, the Pounce and the Kill,” NYT, 5/26/12) would definitely qualify. Consider the tale’s protagonists: Boaz Weinstein, Chrysler building based hedge fund trader, one time Stuyvesant High school grad, chess wunderkind and card shark who Warren Buffet once invited to a poker tournament and JP Morgan’s Bruno Iksil, aka “the London whale,” so named for what Ahmed described as “his outsize trades.” Iksil wasn’t Melville’s Great Whale, a creature who would have posed a slightly greater challenge in both life and art. He turned out to be easier prey for Boaz. When the initial reports of the JP Morgan loss originally appeared, most of the attention in the press concerned bank regulation. Here was 2008 with one of the most prominent and profitable financial institutions in America, taking a huge blow for trading in area that many think should be off limits to banks. However, the exact nature of the losses and what they derived from remained somewhat of a mystery. Even more important however was the fact that JP Morgan didn’t exist in a bubble. The bank’s loss had to be someone else’s gain. “The resulting uproar, in Washington and on Wall Street, has largely obscured a simple truth of the marketplace,” Azam Ahmed remarked. “Yes, Morgan lost big—but, as Mitt Romney has pointed out, someone else won. And that someone or, rather, those someones, turn out to be Boaz Weinstein and a wolf pack of like-minded hedge fund managers. In the London Whale, these traders saw a rich opportunity, and they seized it with both hands. That, after all, is the way hedge funds roll.” Like all fantasy fiction, there still is something unearthly about all of this, and for the lay person, who is likely to be stunned by all the zero’s, it’s the question, how does it all happen? Credit default swaps and synthetic derivatives still read like supernatural forces to those who aren’t versed in their workings. To the many who don’t understand these esoteric financial instruments, which are to financial journalists on the prowl for scoops what leveraged buyouts were in the 80’s, they’re the mysterious dark energy of the business world.