Finance Commentary

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Sponsors Have Edge in Clear Channel Fight

By The Prince ⋅ April 22, 2008 ⋅ Post a comment

"This proposal is yet another disingenuous attempt by the banks to avoid living up to their commitments. The banks want to move this case into the back room because they fear that a public trial will clearly expose their misconduct," the private equity firms said in a statement.
Sounds like fighting words to the Prince. The [...]

Ken Moelis on Private Equity and Investment Banking

By The Prince ⋅ April 21, 2008 ⋅ One comment

A few weeks ago Ken Moelis, former Drexel, DLJ, UBS rainmaking banker, was interviewed on Bloomberg about the leveraged loan market and the changes he expects to see at investment banks. Few people are as well placed as Ken Moelis to make such forecasts and his commentary is fascinating. He also answers questions about his [...]

The Bank of England Responds

By The Prince ⋅ April 21, 2008 ⋅ 2 comments

Finally, a constructive move by a central bank to actually address the real problem in the credit crisis, confidence. Lowering rates is not going to fix this problem. Every financial institution must be confident that its trading counterparties are on financially secure footing before banks begin to lend to each other again. This commentary by [...]

Better Risk Process or Just a Better Outcome This Time?

By The Prince ⋅ April 15, 2008 ⋅ 2 comments

Since the bloodbath on wall street began almost every major piece in the press has mentioned Goldman as the shining example of great risk management. All these articles imply that other firms do not have practices, people, or a risk management culture that apparently Goldman possesses. However, no one has come out and said what [...]

Private Equity’s Investment Style Drift

By The Prince ⋅ April 9, 2008 ⋅ 4 comments

Since the leverage loan market closed this summer, financial sponsors (private equity firms) have been pretty much absent from the buy side. Without debt financing, the sponsors have been unable to LBO new companies. This has had a profound impact on investment banking divisions since sponsors paid more in fees than other clients due to [...]

Contrarian Goldman Leverage, Liquidity, & Regulation

By The Prince ⋅ April 7, 2008 ⋅ 2 comments

In lieu of the recent predictions that the Prince made for future investment banking regulation, there are new developments that warrant his commentary. First, by and large, the predictions made by the Prince ended up being part of Paulson’s plan for more regulation of the financial services industry. The idea the Prince would most like [...]

Bear-JP Morgan Integration: Oh the Irony

By The Prince ⋅ April 5, 2008 ⋅ Post a comment

5 April 2008 - "Jeff Mayer, a former member of Bear’s five-person executive committee and a co-head of fixed income, was named vice chairman of J.P. Morgan’s investment bank, with a focus on global risk. J.P. Morgan also named Craig Overlander, the other fixed-income co-head, as a vice chairman to focus on global clients.
Mike Nierenberg, [...]

Private Equity MAC Attack!

By The Prince ⋅ April 5, 2008 ⋅ Post a comment

As more and more buyouts break the Material Adverse Clause (MAC) is rightfully getting more and more attention. Back in 2001 when the tech bubble burst and many buyouts starting breaking many sponsors pressured their bankers to invoke the MAC and kill deals that the sponsor no longer wanted to do (because the multiple didn’t [...]

Xenophobia: Lawmakers, CalPERS & Private Equity

By The Prince ⋅ April 2, 2008 ⋅ Post a comment

"xenophobic: one unduly fearful of what is foreign and especially of people of foreign origin"
There was much hand wringing and scowling in congress when sovereign wealth funds descended upon struggling U.S. financial firms with cash to mend tattered balance sheets. Many congressman made arguments reminiscent of arguments made against Japanese investments in U.S. real estate [...]

Lehman Offering: The Fears May Grow

By The Prince ⋅ March 31, 2008 ⋅ 5 comments

Add Lehman Brothers to the list of Wall Street firms that are going hat in hand for more capital in these uncertain times where confidence is wholly absent in the marketplace. Lehman is selling at least $3bn of new shares to bolster its capital base and end any fears about a cash shortage. If the [...]

Random Wall Street Quote

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing. - Gordon Gekko