Wednesday, December 10, 2008
A Parody of Towers of Gold
In my book on my great-great grandfather, Isaias Hellman, I go on and on (and some say on) about his prescience in backing business partners who would go on to do great things for California. For example, Hellman formed partnerships with the founders of Lehman Brothers, with Harrison Gray Otis, who bought the LA Times, and with the men who jump-started California's oil industry.
A number of these businesses have failed or are about to fail in the wake of our country's economic collapse. This is causing a number of financial wizards to scour Towers of Gold to see the next business to collapse so they can do some short selling. (or so says my brother, Steven Dinkelspiel in this scathing critique)
Here's the news:
Associated Press....December 8, 2008...With the announcement today of bankruptcy filings for the Tribune Company, the media conglomerate purchased just twelve months ago by Chicago real estate tycoon Sam Zell for a then-record $8.2 billion dollars, investors on Wall Street have turned their attention to a recently published book about the early days of California’s financial history. “Towers of Gold”, author Frances Dinkelspiel’s first book, is an examination of the life of Isaias W. Hellman, the author’s ancestor who was one of California’s first bankers. Dinkelspiel describes Hellman as having a kind of “Midas touch”, with many of his financial involvements leading to success for some of California’s most storied businesses, including Wells Fargo Bank (WFC) and the oil fields of Southern California. But what strikes interested parties on Wall Street has not so much been the engaging story of Hellman’s triumphs, but rather how – since the book’s publication - the author’s choices of examples for these triumphs have proved to be a kind of dell knell for the cited businesses.
“When the book came out just after Lehman Brothers went under, we felt sorry for the author about the timing of it all.” said Robert Zemakism President of St. Martin’s Press, the publisher of “Towers of Gold.” “Dinkelspiel had trumpeted the association between Hellman and Meyer Lehman (who were brothers-in-law). However, by the time the book was available to readers, this relationship had a different historical context with the disappearance of Lehman Brothers from the roster of Wall Street investment banks. ”
It seemed nothing more than a quirk of circumstance when the law firm of Heller Ehrman – a century old San Francisco institution which had been founded by Hellman’s sons-in-law – abruptly announced its closure just days before “Towers of Gold” hit bookstores. And few attributed the plummeting price of crude oil to Dinkelspiel’s praise of Hellman’s involvement in that industry.
But with today’s announcement that the Tribune Company – the parent company of the Los Angeles Times - has filed for bankruptcy, investors are turning to “Towers of Gold” for more than an insight into the practices and personalities of California’s early experience in the banking industry. They are looking for hints about the next institution that may fail without notice. “It is uncanny how Dinkelspiel has managed to identify early those companies that are suffering the most in our current economy,” said Thomas Steyer, Managing Partner of Farrallon Capital, a hedge fund known for its risky and successful bets on companies headed for bankruptcy. “The book talked about how prescient Hellman was to lend money to Harrison Gray Otis, the founder of the Times, and less than thirty days after publication they file for bankruptcy. I plan to scour Dinkelspiel’s book for more ideas about investments that are sure to go south.”
In recent days, the impact of “Towers of Gold” has been felt throughout California. An unprecedented rash of foreclosures of Tahoe shoreline real estate has proved inexplicable and the announcement from the City of Seal Beach, California that it only has funds on hand to last through the end of the year has stunned local residents. In another ironic twist, the Hardly Strictly Bluegrass Festival founded by Hellman’s great-grandson (and Dinkelspiel cousin) F. Warren Hellman announced that due to financial difficulties it was changing its name to “Occasionally, Sort of Bluegrass” and moving to an all-synthesized musical format. “I am going to kill my cousin,” announced Warren Hellman. “You can take my money, but don’t mess with my music,” he implored.
Dinkelspiel was unavailable for comment.