Exile on Wall Street: One Analyst’s Fight to Save the Big Banks from Themselves by Mike Mayo is one of the more important books to be published since the start of the financial crisis. Part memoir, part revelatory narrative of Mike’s career, this highly personal but informative book provides some very important information about how Wall Street works – or doesn’t – and confirms the view of many people than most deals are bad deals, done only to enrich the parties but not investors.
By way of disclosure, I need to say that Mike and I both worked at Prudential Securities in the early 2000s, he as an analyst and myself as a tech banker, so we never really got to know each other. It may interest readers of The Big Picture to know that I have just joined Tangent Capital Partners in New York. I will be focusing on financial advisory and asset management opportunities, but remain Vice Chairman of Lord, Whalen LLC, parent of Institutional Risk Analytics. Maybe I’ll get to serve as receiver for Bank of America when they go belly up, but I digress.
A decade before Prudential, Mike and I almost crossed paths at the Fed, but he worked at the Board of Governors in Washington while I was at the Fed of New York. The former is supposedly in charge of the central bank’s operations, but the latter is the older and more important part of the Fed system. When Treasury Secretary Timothy Geithner was President of the New York Fed, he dispensed gifts and subsidies to Goldman Sachs and other banks without the prior knowledge or objection of Chairman Ben Bernanke and the other members of the Fed Board of Governors. Suffice to say that there are no tennis courts at the New York Fed.
Mayo provides a lot of important detail about how the major Wall Street firms operate and, in particular, why the larger banks and their clients are more concerned about making money than creating value. Mike learned as did I that truth is not beauty on Wall Street, except in those few, generally smaller firms that have been able to preserve a culture of client service and quality. As Mike points out several times in Exile, many large cap mergers are done simply to cash out the managers.
“Two things are worth noting about these super-size banks,” Mayo writes. “First, much of their growth has come from mergers and acquisitions. They are not growing like Google, by creating a product and doing it better than anyone else. Instead they are just buying out their competitors… Secondly, many of these banks would likely not have grown to their current size without federal assistance in the past. In all the bank crises of previous decades, bank failures were thought to be too economically disruptive. But government bailouts – including the most recent round – didn’t resolve that problem. They merely delayed it, allowing banks to keep growing in size and scope, making the potential cataclysm next time that much bigger.”
This quote hints at one of my criticisms of Exile on Wall Street, namely that Mike does not yet appreciate that nobody in Washington or on Wall Street wants banks, especially the largest banks, to behave. There are many places in the book where I expected Mike to turn that corner of epiphany and state this case, but let me do it for him.
Whether you talk of the National Bank Act of 1865, the creation of the Fed in 1913 or the subsequent birthing of the housing GSEs in the 1930s, both the business community and their lackeys in Washington were more concerned about stoking employment and sales today than in safety and soundness of money or banks. I touched on this point in my 2010 book, Inflated: How Money and Debt Built the American Dream, which begins with this quote from Hayek’s “Denationalization of Money” essay:
“I do not think it is an exaggeration to say that it is wholly impossible for a central bank subject to political control, or even exposed to serious political pressure, to regulate the quantity of money in a way conducive to a smoothly functioning market order. A good money, like good law, must operate without regard to the effect that decisions of the issuer will have on known groups or individuals. A benevolent dictator might conceivably disregard these effects; no democratic government dependent on a number of special interests can possibly do so.”
If you look at the decision to allow national banks to make real estate loans three quarters of a century ago or the S&L crisis in the 1980s, the point was jobs, jobs, jobs. This is why the socialists in the neo-Keynesian economic camp led by Paul Krugman chatter constantly about printing more money to grow nominal employment, even if these “workers” cannot afford to buy food at the grocery story due to galloping inflation.
The other, related point to make about Mayo’s memoir is his somewhat embarrassing paean to Paul Volcker. Like Mike, I have great personal regard for Chairman Volcker as a public citizen, but we cannot allow the author of a book about the bad behavior of large banks to get away with this omission. Simply stated, Paul Volcker is the father of “too big to fail.” A former Chase banker, Paul Volcker has always been an advocate of bailouts going back to the Penn Square Bank failure. As I wrote in Inflated:
“In his 2010 book Senseless Panic: How Washington Failed America, former FDIC Chairman William Issac confirms that Mike Bradfield, then general counsel of the Fed and now in the same position at the FDIC, demanded that the FDIC bail out Penn Square Bank, no doubt with the knowledge of Volker and other Fed governors. Issac responded that he would if the central bank shared the cost, but the Fed balked.”
Overall, Mike Mayo deserves great kudos for writing this readable and very personal narrative of his years on Wall Street. Like Mike, I have spent a lot of my career fighting the tendency of big banks and politicians alike to paper over the truth in the name of expediency. Exile on Main Street is a valuable, firsthand account of why in our democracy big banks and the people who run then tend to be less concerned about creating value for investors than in extracting value for themselves. And as long as America remains a messy, ill-managed free market system, it is likely to remain so.
There are few feelings as frustrating as encountering a flight delay or cancellation, especially during holiday travel.
Your anguish can be compounded by poor communication and a lack of customer service from the airlines.
First, try these 6 Tips To Avoiding Flight Delays. But if delays and cancellations do occur, realize that you’re not powerless in these situations.
Take these steps to reach your destination as soon as possible – while making the most of the situation when you can’t…
Arrive armed. Not with guns, with knowledge. It’s the greatest weapon against airport delays. First, check the status of your flight before leaving home. I once found out that my 8 a.m. flight was going to be delayed two hours, so I slept in an enjoyed a leisurely breakfast at home. When I arrived at the airport, it was clear that most of my fellow passengers had been waiting at the gate since sunrise.
Plan alternates. As a pilot myself, I know never to take off without a back-up plan in case I encounter a problem en route to my destination. As a passenger, I practice the same technique. If it’s critical I get there that day, I do some research before my traveling to find out what other flights I could take if mine is delayed or cancelled. I investigate alternate routes on the carrier I’m ticketed on, as well as other airlines with service to my destination. I might even look for flights to another airport that’s not too far from where I’m going. In the event of a delay or cancellation, I can quickly propose these alternate plans to the airline’s customer service – speeding things up for me while making their job easier.
Stay away from lines. I’ve seen hundreds of people in the gate areas lined up to get what’s called re-accommodated when airlines start delaying or canceling flights. By the time these passengers reach the front of the line, it’s likely they’ve already missed the next flight or lost out on the remaining available seats. So the moment you’re aware of a lengthy flight delay or an outright cancellation, call the airline and ask to be confirmed on a new routing. Some carriers, such as Delta, even offer the ability to do this at an airport kiosk or online. If you can’t get through on the phone or their website, use any other means necessary to speak with a representative as soon as possible. This can mean exiting security and going back to the check-in counter – or even paying for a business lounge day pass to promptly speak with an agent. Some travelers have received immediate assistance by tweeting their airline with their problem.
Get out! The only thing more depressing that watching people try to kill the day in an airport is seeing people who are spending the night there. Once you know you aren’t going anywhere for a while, try to make the best of it. If you have a few hours to kill, go to a decent sit-down restaurant and have a nice meal – one of my favorite Alternatives to an Airport Lounge. If you have longer, leave the airport. Nearby hotels may have a free shuttle and offer a reasonably priced day pass to their pool and fitness club. Some airports have observation lounges or even aviation museums, such as the Smithsonian Air and Space annex at Washington Dulles. When you must spend the night, get a room. If your airline won’t give you a hotel voucher, be sure to get a distressed-traveler rate or try these 8 Tips to Save at Any Hotel.
This post originally appeared at Money Talks News.
Consumers Dealt With Even More Delayed Flights In November >
http://cssa.mit.edu/forum/index.php?showuser=45958
http://www.ncv.unsw.edu.au/index.php/member/18835/
http://www.knopm.uw.edu.pl/forum/index.php?action=profile;u=37409
http://www.u.arizona.edu/~phlee/xenonapp/forums5/xenon/profile.php?action=get&id=7208
http://music.unt.edu/pianoresearch/discussion/profile.php?action=get&id=16272
http://sweb.uky.edu/StudentOrgs/Badminton/bbs/profile.php?action=get&id=8681
http://avidbbs.cuc.edu.cn/profile.php?id=1721
http://www.uta.edu/studentorgs/cgsa/forum/profile.php?id=33272
http://ftp.itcs.tsinghua.edu.cn/papakons/teaching/advalgorithmsS11/forum/member.php?action=profile&uid=68662
http://getreal.ous.edu/forum/member.php?action=profile&uid=36957
http://forum.loni.ucla.edu/member.php?u=10198
http://forum.portal.edu.ro/index.php?showuser=386978
http://www.jiexiu.gov.cn/user/profile/20442.page
http://forums.saa.edu/profile.php?id=263561
http://yakko.cs.wmich.edu/~digiband/index.php?section=showuser&subsection=lancemara
http://www.sas.edu.pk/vb/member.php?u=32029
http://www.sti.edu.vn/members/lancemara.html
http://forum.thcsnguyenbinhkhiem.edu.vn/member.php?u=5454
http://rkjsw.sh.gov.cn/user/profile/87172.page
http://portal.aerocivil.gov.co/foro/user/profile/25230.page
http://www.fjit.gov.cn/bbs/user/profile/173385.page
http://school41.edu.ru/smf/index.php?action=profile;u=9962
http://www.scribd.com/doc/75882708/Appliance-Repair-Services
http://www.docstoc.com/docs/108712775/Appliance_Repair_Services
http://www.slideshare.net/henryjohn34/appliance-repair-services
http://member.thinkfree.com/myoffice/show.se?f=d90342b9c507ddcc38f0d41fde4ffb82
http://www.divshare.com/download/16396780-375
http://www.4shared.com/document/0X9KkdQJ/Appliance_Repair_Services.html
https://share.zoho.com/preview/writer/685465000000083014/appliance_repair_services
http://www.box.com/s/e5ms3a5duhvte9n4zqig
http://issuu.com/henryjohn34/docs/appliance_repair_services
http://www.calameo.com/books/0004699018b34a74b13b0
http://www.keepandshare.com/doc/3361132/appliance-repair-services-doc-december-16-2011-10-50-pm-54k
http://www.wepapers.com/Papers/170344/Appliance_Repair_Services
http://www.gigasize.com/get/s485m5vogkd
http://www.doxtop.com/browse/96533712/appliance-repair-services.aspx
http://www.mediafire.com/?ciyw4482dy3atym
http://www.ziddu.com/download/17839907/Appliance_Repair_Services.doc.html
http://dl.dropbox.com/u/36250372/Appliance_Repair_Services.doc
http://speedy.sh/ChBFG/Appliance-Repair-Services.doc
http://mesendfiles.info/files/gnNd1324054830.html
http://www.largedocument.com/4/5d2c0f69/Appliance_Repair_Services.doc
http://uploadingit.com/file/ylcrcv2z7ucstwx7/Appliance_Repair_Services.doc
https://docs.google.com/document/d/1Kb1Go8YnHCzaOfSEaWqAeMYnX8h96pKUORofpujcsvQ/edit
http://www.myplick.com/view/6jNtKqnkbS8/Appliance-Repair-Services
http://www.viewdocsonline.com/document/sgzpdj
http://www.crocko.com/6B8A3E8E69FE448B90DB88104BD7FF9F/Appliance_Repair_Services.doc
No comments:
Post a Comment