Not that I sit around cackling at the idea of middle aged billionaires groveling for money, but, true or false: there's something mildly amusing about the idea of a man who has pinchers where, anatomically speaking, hands should be, down on his crab hands and knees, begging for some clams?

Steve's Sorry [NYP]

At a conference hosted by the Confederation of British Industry yesterday, a visibly shaking Stephen Schwarzman said that private equity is "a force for good" whose only goal is to help the children. Then he bemoaned the fact that his industry is seen as a "destructive force with a short-term perspective, levering companies and stripping their assets to enrich a few nasty people (like me), who then don't even pay taxes on all that they get in such an unsavory manner," just before yelling "good bye, cruel world" and throwing himself off a second-story balcony. (Schwarzman also offered this rave review of himself, courtesy of his own family, on the way down: “My wife and children were not ashamed to have me sit with them at the Thanksgiving table on Thursday.” You know what? Sold. I don't even know what he's selling, but sold.)

Stephen Schwarzman Speaks [DealBook]

Stephen Schwarzman threw his son Teddy and new daughter Ellen a lavish Jamaican wedding last weekend blah blah blah $20,000 barbecue blah blah blah$8,500 4-hour fireworks display blah blah blah bought up the entire hotel for a $50,000 flat fee blah blah blah $150,000 open bar blah blah blah $1,000 wedding cake blah blah blah that’s a lot of money for flour, eggs and milk blah blah blah. No. This little gathering was a drop in the bucket compared to the $3 million birthday party Stephen threw himself last year. The subtext here is that Schwarzman is a bad father. The excuse that Blackstone just lost $113.2 million holds no water because we hear Schwarzman has plans to put stone crabs on the endangered species list by the end of the year. (Last complaint, because we’re really not trying to be negative about the whole thing, it’s just happening organically but 4 hours of fireworks? Seriously? That’s like half the workday. Wouldn’t your neck start to hurt? Wouldn’t your ears start to ring? What am I missing here? I’m really asking. Educate me.)

Earlier: Crab Hands Jr. Is Off The Market

Like Pa, Like Son [NYP]

John Studzinski, senior managing director at Blackstone, worked in soup kitchens as a teenager in Massachusetts, where he also helped start a toll-free number to educate adolescents about sexually transmitted diseases. Today he gives away half of his cash compensation after taxes to the arts, the homeless, and human rights. He’s pledged $10.2 million toward the expansion of the Tate Modern which, considering Blackstone’s stock performance, is quite generous. He’s the vice-chair of Human Rights Watch, and was instrumental in the founding of The Passage, London's biggest homeless day center where he regularly volunteers. He says it’s “dangerous” to not help those who come to him in need. Without knowing anything else about him, one could make the argument that he’s a pretty selfless, decent human being.

Based on his previous writings about charitable giving, you know Studzinski’s generosity of time and money toward the less fortunate nauseate John Carney. But, quite obviously more importantly, how do you think it makes Studzinski’s boss, Stephen Schwarzman, widely known for his staunch opposition to using his excessive wealth to help others, feel? It’s pretty common knowledge that sucking up to the guy above you on the food chain by pretending to share the same interests is a good way to get that promotion, or to at least ensure the preservation of your current job. (Like this, see—Carney: What are you up to this weekend? Me: Oh, you know, probably just going to head over to the Port Authority, little unprotected sex with trannies here, little intraveous drug usage there. And my regularly scheduled Klan rally on Sunday, of course.) Essentially outright saying that you don’t share his beliefs—and pretty much making the guy look like what some people might call a "cheap bastard"—can’t be good for business.

Blackstone's Studzinski Gives Millions Nurturing Tomorrow's Art [Bloomberg]

We’re on the record as being skeptics of the charity industry. But even we were surprised to read how little Blackstone’s Stephen Schwarzman gives away. The latest issue of Contribute magazine carries a story by Michael Gross describing the paucity of Old Crab Claws charitable donations.

Perhaps to get him started in that noble pursuit [of charitable giving], the venerable New York Public Library chose to honor him at its annual corporate dinner in June—prompting the usually businessman-friendly New York Sun to pointedly note that Schwarzman’s name appears nowhere on the Chronicle of Philanthropy’s list of the 61 most generous givers. Nor is it on BusinessWeek’s Top 50 Most Generous. And it’s no wonder: the 2006 tax return for his Schwarzman Charitable Foundation shows five-figure assets of only $63,424 and notes that only $991 of that is being held for charitable purposes.

Gross is shocked that Schwarzman gives so little to charity. “You’ve proven you can bring home the bacon better than anyone else right now. But so what?” he writes. “When are you and your colleagues going to start spreading around more of the pork?”

We had a different reaction. This is a man with a will of iron, we thought. Anyone with as much money as Schwarzman has is no doubt besieged by charity racketeers seeking to exploit feelings of charitable obligation to fund their favored causes. To stand up against this horde, to refuse to seek public approval lavished upon the likes of Warren Buffett, to turn a deaf ear on the mockery from media types like Gross, to resist the temptation to attempt to buy a VIP ticket through the pearly gates...well, it strikes as heroic.

But then again, maybe he’s just cheap.

Hoard The Bacon [Page Six]
Hedgehog Heaven [Contribute; pdf file]

Nah, we’re just kidding. But old crab hands *was* in fact nominated for AskMen.com’s Top 49 Men of 2007. Not necessarily something to write home about, but not something to scoff at, either, perhaps. The list of candidates campaigning for the title of “Top Man” all “found great success in the past 12 months and have carried themselves like true men’s men,” according to AM. (The inclusion of Pete Wentz and Ryan Seacrest is suspect.)

Obviously, Schwarzman will easily beat out Mark Wahlberg, Denzel Washington and Matt Damon, fellow nominees who don’t have crab hands. Also easily defeated will be Dane Cook, because Schwarzman’s standup routine is far superior, and that counts for a lot.

But others in the field could be tough contenders. Mark Zuckerberg? He’s already convinced 930,281 Facebook users to join the group “Zucks 4 Top Man.” David Chase is reportedly taking out hits on all the nominees. And Rupert Murdoch is just plain stunning and will clearly put up a good fight. Last year’s winner, trying to go 2 for 2, was George Clooney-- not much competition there. If you care at all about Stephen, and shares of Blackstone, which are apparently predicted to spike up or down based on the results of this momentous poll, get out there and vote today.

Top 49 Men [AskMen.com]

Kids today. They all want jobs in hedge funds and private equity, and, what’s more, they don’t just want to work in the aforementioned fields—the little punks want to run them. They all want to be James Simons, they all want to be Steve Schwarzman; they all want wicked cool beards, they all want to tower over the crowd at a perch of 5’6”. Where do they get off?

There are two and a half reasons for the career aspirations of today’s youth. 0-1 is that Simons made $1.7 billion last year, with the combined income of the top 25 HF managers exceeding $14 billion. So that’s somewhat appealing. (Schwarzman also did okay for himself). 1-1.5 enables 0-1: favorable tax treatment, i.e. 35% v. 15%, the latter of which saved Simons a few hundge mill in taxes last year. If you’re a kid and you’re saying to yourself “15 or 35, what shall I do?” you probably don’t need much time to come up with an answer. (We know 15 is for carried interest and not total income, we’re just trying to make a point, so settle down trigger finger commenters and save your vitriol for whatever grammatical error is bound to come next).

1.5-2.5 boils down to stupidity and arrogance being a bad combination. Robert Frank writes that the market is a “winner-take-all market— essentially a tournament in which a handful of winners are selected from a much larger field of initial contestants.” Why is the field so overcrowded? Because people overestimate themselves and think that they, not the guy next to them or the guy next to him, have what it takes to earn $1.7 billion/yr. Apparently more than 90% of workers believe they are more productive than their average colleague.

It’s probably true that 90% of your colleagues are incompetent and lazy. But who’s reading Dealbreaker.com right now when you could be doing work? This “overconfidence bias,” according to Frank, puts talented people into an oversaturated field when their skills could be better used elsewhere (like I-banking!), adds no economic value and puts us further and further from achieving our goal of peace in the Middle East. That’s why he advocates making the “after-tax rewards…a little less spectacular,” so that less people want to work in hedge funds and P.E. and raises the attractive quotient of other fields, “ones in which extra talent would yield substantial gains.”

Raise the tax. Don’t raise the tax. Whatever. Let’s attack the problem at the root and lucky for us, the Wall Street Journal has a list of HF and PE enemies on hand. Who or what caused an entire generation to ballpark its earning potential at $1 billion-or-so/yr? Mr. Rogers.

That’s right—you can send your pipe bombs to the estate of late Fred Rogers, who told all small children that they were “special,” even the ugly ones.

"Mr. Rogers spent years telling little creeps that he liked them just the way they were. He should have been telling them there was a lot of room for improvement. ... Nice as he was, and as good as his intentions may have been, he did a disservice."

Indeed! Because of Mr. Self-esteem and that puppet king in the bizarre alternate universe, everyone thinks they can eat $40 crab legs. And you know who else is to blame? The parents. Too much “A for effort,” not enough “you’re a moron.” Too much “I believe in you,” not enough “You will fail.” Too much, “You can be Stevie Cohen when you grow up,” not enough “hopefully McDonald’s is hiring.”

The overcrowding of these fields as a result of coddling and child-rearing techniques that foster confidence and self-worth (read: entitlement) is a problem that must be stopped.

We’re doing our part. When we held our six month-old niece a few weeks back, we didn’t look into her eyes and say “You can do anything you want!” like we’re sure our brother and sister-in-law do on a daily basis. We said “Listen, the bottom line is you’ll probably be overeducated but not necessarily that gifted. And you’re also a woman and a (1/2) Jew to boot. And your father couldn't tell time until he was 13. So I’m not exactly sure what we’re looking at but I know it’s not ‘hedge fund manager,’ at least not at a reputable shop. Let’s set the bar at eye-level and check back in a few years. Good talk.”

A Career in Hedge Funds and the Price of Overcrowding [NYT]
Blame It on Mr. Rogers: Why Young Adults Feel So Entitled [WSJ]

Blackstone closed at $30.75 yesterday, down 5.2% for the day and below its $31 initial offering on Friday; shares fell to $30.48 during pre-market trading. This is embarrassing. Nobody (here) knows for certain why life is being so god damn unfair to Stephen Schwarzman, 5’6”, but perhaps it could have to do with the Schwarz’s outrageous pay package, the nebulous amount of disclosure about the actual content of the Blackstone funds, or the fact that equity investors haven’t been duped into thinking they are LPs.

This also might have something to do with it:

One particularly risqué segment posed a personnel problem more pressing than a potential shunning at Shinnecock. “The kid, Dylan, was either going to hump a chair or hump the nanny’s leg,” Holly [Peterson, Peter’s daughter] said. “As a mother, I wasn’t going to ask my kids or my friends’ kids to do that.” Hence, the dwarf. Jay [Peterson, Peter’s nephew] recalled, “We thought, why we don’t hire a little person? That should get some good laughs.

For his part, and for Blackstone’s sake, the elder Peterson had the decency (and good sense) to appear embarrassed:

Pete Peterson has been trying to distance himself from the video, saying last week via e-mail that he would never have agreed to lend his apartment had he known that “The Manny” was going to be filmed there, rather than, as he thought, a taped interview of his daughter."

Within Days, Share Price of Blackstone Is Below $31[New York Times]
Schwarzman Stake Sinks Like Blackstone [New York Post]
Making the Manny [New Yorker]

The morning after: not always so pretty, is it?

Neither is the morning after the morning after (weekends don’t count in trading land), especially if you’re Stephen Schwarzman. After closing at $35.06 on Friday, Blackstone’s shares fell 7.5% to $32.44. This translated to a loss of about $655 million for The Schwarz, and (we're assuming) no crab leg salads for a week.

When we started to write this post, BX had fallen to $31.15. It took us a while to find where the edited Crab Hands graphic was on the computer, and by the time it was located, they were down to $30.60. And not that we’re into kicking people when they’re down, but it should also be noted that Goldman Sachs, Merrill Lynch and Bear Stearns are all up (since yesterday’s close, trending with the market), so BX has no one to blame but itself.

Steve's $655M Bad Day [New York Post]
Blackstone gives up debut gains [Financial Times]

After opening with a poplet after its initial public offering on Friday, Blackstone’s stock has been trending downward toward the IPO price. On Friday, we asked DealBreaker readers to guess the price of the shares at close. (A move, we happily confess, was a blatant rip-off of a Market Beat item.)

Reader BB called it with his two PM forecast of a $35.01 close for BX. This was just a nickel short of the actual close of $35.06, making BB the winner according to our Price Is Right rules. We’ll be sending him a copies of Jack and Suzy Welch’s Winning: the Answers and Dana Vachon’s Mergers & Acquisitions. BB requested that we maintain his anonymity.

“I arrived at the $35.01 closing price by a combination of technical analysis and luck,” BB told us. “I noticed that after the initial pop in BX shares the stock sold off rather quickly, dropping from $38 and finally catching a bid around $35. It rallied back to $36, but I suspected another wave of selling before the close and guessed that the stock might hold that $35 level once again. Remembering the old Price is Right strategy, I tacked on a penny to my guess – and bingo: $35.01.”

Click here for a pop-up version of the chart BB used for his winning analysis. Arrow indicates the time the closing price forecast was submitted.

Yes, the offering priced at $31 opened 18% higher at $36.55. Yes, Erin Burnett and Mark Haines could barely contain themselves all morning. Yes, DealBreaker wrote 131 articles about the whole thing on Friday alone.

But some people—cynical assholes—seem to think the BX offering was underwhelming. Andrew Ross Sorkin notes Paul Kedrosky, executive director of the William J. von Liebig Center for Entrepreneurism and Technology Advancement at the UCSD found the first day pop “scant,” that lead underwriter Morgan Stanley may have priced Blackstone’s units “low,” and that the offering paled in comparison to that of Fortress, Bukkake Party of IPOs, whose offer surged 68%.

ARS points out, however, that Tom Wolfe was on the scene, and that’s got to mean something. Indeed it does: an open bar (according to 24.3% of the DealBreaker audience). The $7.7 Billion Man and the $1.88 Billion Man (Schwarzman and Peterson, respectively) probably don’t much care either way whether or not you think Friday was a day that will live in infamy but, just for kicks, let’s hear it. The man who enabled “The Manny” deserves no free pass.

A Glamorous Public Debut for Blackstone [NYT]

Is Blackstone CEO Stephen Schwarzman two seconds away from doing a sequel to Cole Hauser’s drastically underrated Paparazzi, the vengeance-fantasy film in which a rising Hollywood actor decides to take personal revenge against a group of four persistent photographers to make them pay for almost causing a personal tragedy involving his wife and son, only this time, it’s not a Hollywood actor kicking ass and taking names, it's the founder of a PE firm that just went public? Probably not.

But he may be making a conscious effort to stay out of the limelight, as Deal Journal reports that not only did he fail to show up to the NYSE for his own IPO this morning, but recently cancelled a planned appearance for next week at the Wall Street Journal’s Deals & Dealmakers conference, also at the Exchange. This sudden bout of shyness comes as a bit of a shock, considering that in March, David Weidner at MarketWatched pointed out that since January 1, 1985, Schwarzman’s name has been referenced 901 times, with one third of those references being made in the last sixth months. A Blackstone repetitive declined to comment, though did laugh at the question, which tells us nothing, but makes us think the sudden lack of public appearances can only point to one thing: $40/crab legs.

Schwarzman’s New Quiet Period [Deal Journal]

This was very clearly one of the most surreal moments of BX: The Opening. Amidst the crowd of traders, there appeared a man with a shock of white hair in a double breasted gray suit. And that man happened to be Tom Wolfe.

After the jump, cast your vote for what Wolfe was doing at the Blackstone opening.

Can I be honest for the first time in my life? I’ve never met Stephen Schwarzman. Nor I have I talked on the phone with him or engaged in any sort of IM conversation (but if you’re reading this Steves, it’s ohbabyitsbess and I’m waiting). So I can’t speak to whether or not he’s an asshole.

Of late, though, and especially today, that seems to be the consensus. In the Observer, Chris Shott apparently believes that Schwarzman is such a jerk that a scam had to be devised to make him seem like a nice guy who likes kids, wherein his daughter gave birth to twins while he was at the Pierre Hotel to lay out the Blackstone IPO, and he had to leave for the hospital. The weasel.

And on Tuesday Daniel Gross penned a profile about Schwarzman called “The Golden Ass.” He submits that:

• Schwarzman has practically been begging for attention.

• I wasn't invited [to Schwarzman’s birthday party], but my gift would have been a first edition of Christopher Lasch's Culture of Narcissism.)”

• He may have single-handedly ignited class warfare that will beggar himself and his Park Avenue neighbors.

• He is a titan of self-indulgence

• His public image to date is that of an ungracious, vain yutz.

• He's like an NBA player who, having gone the length of a court for a slam-dunk with the game already put away, starts trash-talking, jumps atop the scorers' table, gestures obscenely at opposing fans, pinches a cheerleader, chest-bumps the referee, sticks his tongue out at the camera, all while grabbing his crotch and yelling loudly that he's the man.

Oh, and I once saw him gesture like he was going to give a homeless man a dollar bill and then light it on fire. And he eats crabs valued at $40/leg.

The Golden Ass [Slate]
Oh, Zibby, Thanks So Much for Calling! [The Observer]

We are all quivering with excitement over the Blackstone IPO this week, but some, like Breakingviews.com editor Edward Chancellor, are looking further into the future. Because many of us at Dealbreaker hold or are pursuing advanced degrees in comparative literature with a financial sector specialization, we were fascinated by Chancellor’s piece in the June Institutional Investor: a fictional and dead-serious letter from Stephen Schwarzman to Blackstone shareholders, dated June 1, 2012, regarding the proposed buyback and delisting of Blackstone shares.

According to the letter, after Blackstone goes public this week, it will face five perilous years marked by “deteriorating economic conditions, extraordinary convulsions in the credit markets, a worsening political and legal environment for the buyout industry, and the consequences of what is not commonly referred to as the ‘private equity bubble.’” It will all culminate with a buyback at $15-per-share (a “substantial premium to current price”), about half of the anticipated IPO price.

As a document of 2007, the letter is more didactic than damning, saying of the “Private Equity Bubble,”

The entire buyout industry, including Blackstone, must accept its share of responsibility for our current woes. At the time of our IPO, returns from buyouts had been excellent, largely because both corporate valuations and profits had been rising in tandem for several years.

In hindsight, it’s clear that we became over confident. Too much private equity money was chasing too few opportunities. We found it difficult to resist the urge to raise ever-larger funds. And we put that money to work to quickly. In the takeover frenzy, many private equity firms were over stretched. There was a collective loss of investment discipline. Too many businesses were bought at large premiums when profits were near a cyclical peak. Given the fees on offer and the ease with which assets could be flipped only months after acquiring them, out actions were understandable.

Imagining a not-too-distant world in which Blackstone forsakes its listing [Institutional Investor]

Yesterday the Blackstone Group announced that it was fast-tracking its initial public offering, so that shares in the private equity group will start trading under the ticker symbol BX a week earlier than planned. So how did Blackstone co-founder Stephen Schwarzman spend the night before this big announcement? He went to a party.

As we mentioned earlier, Monday night the New York Public Library held it’s annual corporate dinner, and Schwarzman was the guest of honor. DealBreaker Senior Library Correspondent Scott Bressler reports from the party.

Monday night DealBreaker got me on the list for Steve Schwarzman's bash at the New York Public Library. I was on the press list along with legends like Bill Cunningham from the NYT Sunday Style On The Street spread, as well as others from CNBC. Considering the media spectacle that good ole Stevie has made of himself lately, I'm surprised there was no giant platter of over-priced crab claws (though none of the waiters had squeaky shoes).

The first hour of the event was a cocktail party in Astor Hall (beautiful space for those who aren't familiar with it). Of course everyone there, as members of our cities finest waspy elite, is a major contributor to the NYPL (and I'm not talking about sneaking in through the Young Lions on the cheap).

I snapped plenty of photos of The Man Himself, Mr. Schwarzman during the cocktail hour, and got a few of some of the other big-wigs such as Donald Marron, Jimmy Lee, and Sam Butler. Just as I was leaving, Maria Bartiromo, a speaker for the event, came in with her husband, Jonathan Steinberg.

Photos after the jump.

Schwarzman in the Spotlight at Library Gala [New York Sun]
Schwarzman: Doing It for the “Regular People” [Wall Street Journal]

When you’re about to take your company public and are being criticized for making too much money, attracting too much publicity, throwing yourself too grand birthday parties and eating crab legs valued at $40/leg, the best thing to do is attend a lavish soiree in your honor. Just make sure it's thrown and paid for by someone else.

Obviously, Stephen Schwarzman knows this, and will be feted tonight at the New York Public Library by a few of his closest friends. People like Blackstone Vice Chairman J. Tomilson, JPMorgan Chase & Co. Vice Chairman James B. Lee, Jr., Merrill Lynch & Co. co-president of global markets and investment banking Gregory J. Fleming, Lehman Brothers CEO Richard S. Fuld, Jr., Bank of America CEO Kenneth D. Lewis, Citigroup investment banking executive Raymond J. McGuire, Bank of New York CEO Thomas A. Renyi, Sony Chairman Sir Howard Stringer, Skadden Arps M&A laywer Peter Atkins, Wachovia CEO G. Kennedy Thompson. There's even talk that Kohlberg Kravis Roberts & Co. co-founder Henry R. Kravis will be there.

We’ll be sending Senior Schwarzman Correspondent Scott Bressler. But if you happen to find yourself in the neighborhood, stop by and send us your notes.

The New York Public Library Honors Stephen A. Schwarzman, Chairman, CEO and Co-Founder, The Blackstone Group, at June 18 Corporate Dinner [NYPL]

While the rest of us were reading about Economic Net Income and Steve Schwarzman’s big IPO payday, Lauren Silva at BreakingViews was paying attention to something far more important: which banks scored underwriter rolls in the deal. And she noticed that a big name that had been noticeably left out of the deal had found its way on to the left hand side of the front cover. That’s right, Goldman is now an underwriter for the Blackstone Group IPO.

A bit of background after the jump. And, of course, the answer to the question of how Goldman got the role.

Steve Schwarzman is an American, Philadelphia born – Philadelphia, that city of brotherly love – and goes at things as he has taught himself, free-style, and makes the record in his own way: first to knock, first admitted; sometimes an innocent knock, sometimes a not so innocent. But a man's character is his fate, says Heraclitus, and in the end there isn't any way to disguise the nature of the knocks by acoustical work on the door or gloving the knuckles.

But you can, of course, disguise the presence of the help by making sure they aren’t wearing rubber shoes. And the sound of rubber shoes squeaking is one of the things that the head of the Blackstone Group won’t tolerate, according to an extensive profile of Schwarzman in today’s Wall Street Journal.

Schwarzman comes off sounding a bit like like a character from a Saul Bellow novel—in particular Augie March. His childhood was spent working in a store but he never took to the work. “I hated waiting on people,” Schwarzman says. The early days of Blackstone’s private equity business seem built on ideals that Augie would have appreciated, including the unwillingness to adopt the “corporate raider” tactic of launching unsolicited bids at public companies. Even now he clings to an idealism that might be at home in the headquarters of Google, who famously instruct employees “Do Not Be Evil.” He tells the Journal that “he would never go after a company just to thwart a rival firm, and that he isn’t a ‘marauding, low-class, low-brow inflictor of random damage.’”

He describes himself as a counter-punch expert, lacking a “first strike capability” but unwilling to back down when challenged. “I didn’t get to be successful by letting people hurt Blackstone or me,” he says.

But in other ways he’s more of a bizzaro Augie March. Where Augie clings to his idealism of love and is thoroughly middle class, Schwarzman seems to have early on embraced a life of Machiavellian ambition. Augie’s life unfolds as a series of chance encounters with the forces of a chaotic world, while Schwarzman’s unfolds according to various complex strategies of his own devising. At the end of Bellow’s novel, Augie announces that he knows what it means to be an American. But that was 1953. Schwarzman’s version of being an American is cut from a different era—the gilded age, the roaring twenties or possibly the second half of the first decade of the twenty-first century.

How Blackstone's Chief Became $7 Billion Man [Wall Street Journal]

Debbie Does... [Dan's Hamptons via Gawker]