Happy Hump Day, Viewfinders. On to this afternoon's links.
Dan Loeb is back with another fun letter
This one was to William Ruprecht, chairman and chief executive officer of Sotheby's, whom Loeb called on to resign. Loeb disclosed that his firm Third Point LLC had boosted its stake in the auction house to 9.3 percent and that he would seek a board seat. As usual, his missive had some real gems, like this: "In the course of our investigation into the company’s business practices, we came across numerous anecdotes of waste. Typical of the egregious examples was a story we heard of a recent offsite meeting consisting of an extravagant lunch and dinner at a famous `farm-to-table' New York area restaurant where Sotheby’s senior management feasted on organic delicacies and imbibed vintage wines at a cost to shareholders of multiple hundreds of thousands of dollars. We acknowledge that Sotheby’s is a luxury brand, but there appears to be some confusion –- this does not entitle senior management to live a life of luxury at the expense of shareholders."
Why last year's big foreclosure settlement was a farce
New York Attorney General Eric Schneiderman sued Wells Fargo & Co. over claims that the bank violated terms of last year's big foreclosure-abuse settlement between large banks and federal and state regulators. Los Angeles Times business columnist Michael Hiltzik uses the news peg to remind readers what a scam the settlement was. "Trumpeted by the regulators as a huge victory for the consumer, it required five big banks to pay $25 billion and adhere to a long list of proper foreclosure practices," he writes. "The foreclosure settlement was always a bank bailout in disguise. Of the headline number, $25 billion, only $5 billion of that was cash coming out of the banks' pockets. The rest was `credits' they received for modifying underwater mortgage loans; since a loan modification that staves off a foreclosure almost always saves the lender money in the long term, the banks were actually getting credit for doing something that was in their interest anyway."
Matthew Lynn of Market Watch says the euro area is turning from a financial crisis to a political crisis and that politicians opposed to the euro are bound to take power in some countries that use the currency: "The real problem this time around is not the bond markets. It is the political backlash against austerity and recession, and that has the potential to be far more serious for the investors who have been piling into European equities in the past few months." On the other hand, he wrote a column a month ago recommending five ways "to invest in the euro-zone revival." So it's OK to feel confused.
Some companies are just made for each other
In Greek mythology, Cerberus was the three-headed dog that guarded the gates of the underworld -- which probably is where BlackBerry is headed if it doesn't find a buyer. In modern times, Cerberus Capital Management is the private-equity firm that owned Chrysler when the auto maker filed for bankruptcy and took a government bailout. Now the Wall Street Journal reports that Blackberry "has drawn the interest" of Cerberus, although it "may well opt against pursuing a bid." Perfect.
Breaking news from Wall Street's department of the obvious
President Barack Obama met with CEOs from the country's biggest banks, and you know what they told him? Failing to raise the U.S. debt limit would be bad. "There is a consensus that we shouldn't do anything that hurts this recovery," said Lloyd Blankfein, CEO of Goldman Sachs. Thanks for that insight.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)