Trade the Senate and the House for Natural Gas? Such a Deal
The leaders of the world’s largest investment banking firms announced today that they have concluded the first-ever swap of legislators for natural gas. Members of the House of Representatives and the Senate will go to Russia in exchange for 67 cubic meters of natural gas. Russia will receive an annual royalty for each former House member or senator retained. According to an Office of Management and Budget source, these incentive compensation payments will be made from savings realized by doing away with the legislative branch.
A sticking point was resolved when a consortium of investment bankers agreed to set up a sinking fund to guarantee the incentive payments. A spokesperson for Goldman, Sachs explained, “The Russians had us. They knew we had to dump, and they held us up for a guarantee. But on an amortized basis, the U.S. comes out way ahead.”
A Salomon Smith Barney spokesperson said the sinking fund could be funded by a private placement but added, “We sense that the general public wants some kind of participation, an equity position. We haven’t ruled out bundling these sell-offs into a series of IPOs.”
Merrill Lynch and Paine Webber reported a flood of phone calls from investors inquiring about participating in the sell-off. It is rumored that the SEC may even waive its “prudent man” rule and approve on-line trading of new kinds of government futures contracts. Bear Stearns is reportedly ready to file for a directed trust of options straddles. Industry sources say a zero-coupon bond with an appreciation kicker is on the Morgan Stanley Dean Witter agenda for the week.
Concern, however, was expressed by public accounting firms regarding the write-off of the debts amassed by the House and Senate. While it is expected that the Capitol itself will be leased to Amazon.com, accountants expressed doubt that all offices could be let at commercial rates. It has been widely rumored that Tina Brown and her Miramax partners are interested in buying the Library of Congress and relocating their story development staff at the National Archives. Still another rumor gaining currency was that Michael Eisner’s Congressional Theme Park will be accorded landmark (tax exempt) status. And Cushman & Wakefield is reportedly in discussions with Bill Gates about acquiring the Senate office building as an East Coast pied-a-terre.
As to the old occupants of those buildings, the former legislators balked at the swap from the outset. They gave in only when Warren Buffett and Peter Lynch agreed to manage their 401K plans.
In Russia, reviews were mixed. A member of the new Politburo, who declined to be identified, groused, “You get our depletable resources and we get the sources of your depletion. So much for glasnost.”
As originally conceived, the swap would have meant a wholesale spin-off of the Senate and House. The arrangement was to have been brokered through the International Monetary Fund with help from Michael Ovitz. Russia would have received rights of first refusal on the former legislators. If Russia decided not to exercise these options, the legislators would have become the property of their respective political parties. Any unclaimed legislator could become an NBA free agent.
A spokesperson for Warburg Dillon Read explained that, initially, a wholesale swap had been offered to several countries. “No nation found this palatable. They feel that the acrimony and vitriol is so pronounced that the mere presence of these persons would be destabilizing.”
With World Bank misgivings, members of the Senate and House banking committees, however, are being sent to Brazil. And, in a joint venture with NATO and the U.N., members of the armed services committees, along with Kenneth Starr and his staff, are said to be on their way to Belgrade. Starr has promised indictments within a century, if he gets “appropriate levels of funding.”
Japan and Singapore are resisting any infusion of U.S. legislators. A spokesperson for Lehman Brothers acknowledged, “They have a point. For over a year now the House has been preoccupied with Clinton and Lewinsky. In that time, housing starts have gone up, borrowing rates have declined, retail sales figures have risen and new business start-ups are very encouraging. The sentiment is: Keep them preoccupied elsewhere.”
In the hours following the swap announcement, several overseas exchanges experienced heavy selling. In marked contrast, the Dow Industrials soared 867 points, breaking 11,000. The Nasdaq composite rose 10%. While back-room personnel will work through the night, traders are bracing for another unprecedented buying spree as investors abroad vote with their portfolios.
