Showing posts with label Banking. Show all posts
Showing posts with label Banking. Show all posts

07 November 2013

In Defence of Bankers

In response to the ugly anti-Bankerism that infects our society, I insist on having a word.

I recently crunched the numbers, ran the algorithms, consulted the spreadsheets, and the results are in.

For every one dishonest banker there are at least 1,000,000 foolish American consumers who are ignorant about money, who refuse to save, who do not invest, and who absolutely must spend their cash on every consumer gadget, frivolous toy, and 2,000-square foot home they can't afford.

Of course I'm not absolving banks of any responsibility. They made mistakes and took foolish risks in a market that is largely rigged. Even more blame should fall on Government, however, which, desperately hungry for votes both native and imported, pushed the banks to lend at increasingly reckless rates.

Greed, of course, is not confined only to bankers and government bureaucrats. It never was.

I know of one 20-year girl in Newport Beach who inherited several million dollars after both parents passed away. Within 3 years the little bitch was broke, having spent the dosh on trips to Hawaii and Europe, clothes, sports cars, drugs, monthly raves in Palm Springs, and who knows what else.

I personally know of ageing, unemployed hippies living in million-dollar homes in Laguna Beach, having inherited them decades ago, and who can barely scrape together enough money to pay property taxes because they're too busy doing drugs and not looking for a job.

Speaking of which, I've met numerous 50-70-year olds who have frittered away their lives waiting for their rich parents to die.

And don't get me started on the throngs of addicts and "disabled" out there, people who have simply dropped out and expect someone else to care for them.

I find this fucking pathetic.

Having lived in and out of this country, and having travelled extensively abroad, I've come to certain conclusions. You know what defines Americans? A pervasive, deep-rooted childishness and immaturity, from which comes the sense of entitlement and greed that got them where they are today.

When I hear American consumers express their hatred for the banks, I immediately think of the young women who make false accusations of rape against a man after a drunken night of seduction and sex.

Embarrassed, and feeling buyer's remorse, they have no other response.

25 July 2012

Old School Banking

As you may have heard, I've just been recruited for a key investment role by another firm.

My new home is a small New York City-based trust company founded by hard-drinking WASP financiers, whose corporate culture, I can now report, has been happily transported to West Coast offices. Longwing brogues are de rigueur. Facial hair is verboten. Gents' jackets are to remain on at all times. And don't forget cocktails at half six. This sort of thing.

You don't need me to list for you the perks of a new job offer. I can disclose, however, that they do include lavish lunches and dinners with eager headhunters, who, in my experience, seem to vary widely between dull betas and cute and willing blonde fillies, the latter providing an opportunity to charm my way into both bank and panties.

Chaps of my background, experience, and impeccable profile are in stiff demand at the moment. The recruitment process is a bit like courting a new girl. The bank for its part sets out to determine with unblinking eye whether the applicant can provide the necessary assets, networks, and expertise to increase revenue. The aspiring banker, for his part, decides if said bank will put out and provide a home in which he can thrive.

When it comes to marriage, as you know, I'm a bit of a traditionalist. So parlous is the idea of marrying a modern girl, however, that one is tempted to demand a dowry. It's the same in banking, where it appears in the form of a hefty signing bonus. Or, as it is sometimes called in the industry (for reasons that elude me), the money shot.

Forgive me if I appear to honour the occasion in excessive, yet private, style.

21 April 2012

Odey On Stocks

As you know, my role in the hedge fund community these days is tangential at best. But I remain in touch with HF colleagues in London, New York, and San Francisco. And I continue to follow very carefully a handful of HF managers whose thinking I respect and whose results over the years have been more than impressive. Chief among these is Crispin Odey of Odey Asset Management in London. His recent remarks on the stock market (below) contradict the common sentiment of the crowd. Which is why I listen to him. Read for yourself:

'Odey is probably one of the few people in the modern financial world who believes that a "history degree is far more useful than a CFA" and a rarity among fund managers in being as comfortable talking on macro issues and politics as he is about individual stocks. His clients are the end beneficiaries of this intellectual restlessness. His long term track record stacks up against the very best. After a poor 2011 in which his funds were overweight equities too soon, 2012 is so far proving yet another stellar year.
...
Overall, Odey remains bullish on equities and has progressively cut his cash holdings. "But in Europe credit is broken so it is hard to say any trend or rally will be maintained in the long run. The only thing I am absolutely certain of is that cash and bonds will not earn a real return and that equities are cheap. They are cheap because they are unloved and will continue to be volatile, but equities remain the right asset class to hold to protect wealth," he says.'

Scott’s: with Crispin Odey, Founder, Odey Asset Management, EuroWeek, 20 April 2012

20 April 2012

City Gent

20 March 2012

Wall Street Traders

08 March 2012

Twenty-Five Years of 'Alex'

09 December 2011

City Gent

27 October 2011

Margin Call (Trailer)

14 October 2011

City Gent

"He used to be the bastion of Britain, sorting the nation's finances out during the week then shooting pheasant at weekends on his estate in Berkshire. These days the city gent has moved rather swiftly to being the country's favourite pariah, and is forced to wear his beloved pin striped suits and bowlers only at night in select gentlemen's clubs, to avoid being stoned in the street."

Am I A Chap?, Gustav Temple (2011)

03 October 2011

Wall Street: Notes On The Occupation

This past weekend I received a death threat for being a banker. I have received emailed threats of physical violence before, which I suppose is a hazard of the job. This one was an anonymous email in support of the ongoing 'Occupy Wall Street' demonstrations around the country that began last month. These events were ostensibly meant to protest the issue of "wealth inequality", which is like trying to blame the sun for rising. But actually they represent a feeble effort by the usual political troublemakers and urban filth--with aid from operatives in the current ruling regime--to counter the rise of Middle American political activism. It is an attempt to encourage support for radical policies of wealth redistribution and racial retribution. That they blame and target Wall Street and not Government--which is the real source of the economic crises bedevilling America--betrays their true intention. After all, the scruffy street-demonstrators are merely the foot-soldiers, the 'boots-on-the-ground', of the same hegemonic interests that have been in power for decades. Who is occupying whom? In any event, the anti-Wall Street crowd are cowards. Wall Street is a soft target. Banks and bankers are easy prey. For the time being, that is. As I have pointed out on more than one occasion, we are reaching a place where it will be shocking not that such threats are made, but that they are not carried out with relish in reply. In other words: bring it on. Today Wall Street. Tomorrow, Middle America. We look forward to the day.

05 April 2011

A Moveable Cocktail Party: Metro-North Bar Car

As you know, for much of the 1990s I worked on Wall Street in lower Manhattan. My last position was in sales at a bank next to WTC. The building later suffered a partial collapse from events on September 11, 2001. I initially lived at family apartment in Zeckendorf Towers at Union Square, but later moved to more civilised surroundings in Greenwich, Connecticut.

Having grown up near the city and visited it from a young age, I found living in NYC utterly overrated. I concluded the "New York experience" is something pursued mostly by vulgar young people on the make or by outsiders like stuck-up farm bitches from Iowa who think they're too good for their hometown. People who still use their city experience as a bourgeois status marker are boring. New York City? Been there, done that, bitchez. Next.

We drank a lot, mostly off the job. At lunch we would usually head over to New York Dolls, a strip club with a superb lunch buffet. We studied the naked girls in front of us and made pertinent observations to one another. I focused on my favourite girl, a slim, dark Eurasian beauty, staring at her small perfectly-formed tits and neatly trimmed pussy and chewing on some spicy chicken wings. Sometimes after the market closed we would head out to Scores, Flashdancers, and a few other clubs, the names of which I have forgotten. After work we hit Pipeline or various Irish bars surrounding WTC.

Once I moved back to Connecticut I caught the Metro-North train home. Grand Central Terminal is easily one of my favourite places in New York. But the drinking did not stop there. At the head of each tunnel in the Connecticut-bound terminal was a small stand selling cocktails, beers, and snacks. It was an opportunity to stock up for the long 52-minute ride home. Eventually a few of my fellow riders and I decided to hold drinking contests, measuring how many cans of Foster's and Coors Light we could consume without falling over on the way back.

Our arena was the Metro-North bar car, a veritable bar on wheels, added to commuter trains at specially-designated times each evening. It was usually packed with bankers, traders, and attorneys, plus a few women. A rolling cocktail reception. Ragging and teasing abounded. A few old boys played cards. Suits by Brooks Brothers, Southwick, Armani, Hugo Boss, and Paul Stuart. Solid black wingtips, or black loafers by Gucci and Ferragamo. Hair by Subway Barbers in Greenwich. O, happy times.

Nothing good lasts forever. There are rumours the authorities may close down the Connecticut bar car business for good. Let us hope not and instead raise our glasses to the cocktail-swilling commuter class.

01 April 2011

Jolly Country Gent: Crispin Odey

The hedge fund boss who has had a
sausage named after him -
the 'Odey sausage'
"When I arrive for lunch with Crispin Odey at Corrigans--the super-smart Mayfair restaurant of star chef Richard Corrigan--I'm treated like royalty. Odey is running slightly late and I'm shown to a prime table. The staff bustle around, checking I'm okay - nothing is too much for them. Finally, he arrives, and they go into overdrive.

A bottle of normally exquisite - and expensive - white Burgundy is produced, which he decides is not quite right. The sommelier scurries away to fetch another one. He glances at the menu and knows what he wants: a duck egg to start, followed by, if I agree, a shared steak and kidney pie. 'And what about some beef on the side, let's have the loin of beef on the side. Lovely. Oh, and we'd better have some mash and some kale - we ought to have something green.'

He calls over the wine waiter again: 'And we'd like a bottle of the Leoville.'

The claret is superb, as is the food. But this is mid-week. A bottle of white and a bottle of red. Beef on the side. Nobody has lunch like this in London, not any more, not in oh-so politically correct, watching-the-calories 2011. Not on this scale and even more rarely at this cost. What's more, with hedge fund magnate Odey, there is the feeling this is nothing special. The office of his firm, Odey Asset Management, is across the road and Corrigans might as well be his canteen.

Recession or no, he lives like this all the time. Full on, doing exactly what he wants to and perish the petty-minded dullards who get in his way.

The phrase larger-than-life could have been invented for Odey. He's well over six foot, broad and has the charm, flamboyance and confidence of someone who is extremely comfortable in his own skin, and is also blessed with a fearsome intellect. His speech is rapid, and ideas, thoughts, opinions pour out of him.

He may look like a jolly country gent down in town for a few days (his passions include fishing and shooting), but he is a financial operator of great aplomb, a man who has the markets constantly in his thrall and is famous for taking daring, often counter-intuitive positions. And he has paid himself at least £85m in the past five years, including over £30m last year.

There again, he is also a hedge fund boss who has had a sausage named after him - the 'Odey sausage'. Made with pork from a neighbour in Ross-on-Wye (where he has a country home), the sausages are sold at the Union Market, the new organic grocer in London. He's in on the deal at both ends, of course - he's an investor in Union Market, and the firm is run by his old friend former corporate financier Tony Bromovsky.

Together with his wife, Nichola Pease, a member of one of the Barclays founding families and deputy chairman of private wealth group JO Hambro (her sister's husband is ex-Barclays chief executive John Varley and her brother Richard Pease is a star fund manager), Odey is part of a formidable and impeccably well-connected unit.

They've been described as the 'Posh and Becks' of the City but in truth they could not be more unlike the celebrity duo. They're part of the old money City establishment, highly educated, conservative in taste, quiet, serious and never courting publicity. They're extremely wealthy - the Sunday Times Rich List estimates their worth at £300m.

But in that, too, Odey, 52, is quite different from his hedge fund rivals. He's absolutely not brash - the Odeys and their three children live in London, in a gorgeous but understated, art and book-filled house in the oldest part of Chelsea, near the river."

Cont...

The MT Interview: Crispin Odey, by Chris Blackhurst, Management Today, 1 April 2011

http://www.managementtoday.co.uk/go/news/article/1061079/the-mt-interview-crispin-odey/

©  Haymarket Business Media 2011

26 February 2011

Coutts & Co

1970: The smart interior of Coutts Bank on the Strand in London. The aristocratic bank
has an illustrious history and counts the Queen among its customers.

Where do you bank? I generally do not like to talk about money, for the very simple reason that I discuss it all day long. I have spent almost my entire working life in a bank of one kind or another, apart from a brief period as a London hack, including stint at Punch. Growing up, Coutts & Co was the bank. As you know, I went to school in England with the sons and daughters of English actresses, American diplomats, European bankers, Egyptian exiles, New York stockbrokers, Persian princesses, and the odd African tribal chieftan's son or two. A cosmopolitan group. For them, Coutts, established in 1692, was the financial institution of choice. A Coutts card or cheque book was a mark of status to be whipped out at the crucial moment at weekend haunts such as Hackett, Henry J Beans, The Australian, and Scalini. Mere mention of the Coutts name takes me back. Have things changed? I understand profit is down at Coutts, now the wealth management arm of Royal Bank of Scotland (RBS), due partly no doubt to the economic crisis. Fortunately I can not say the same thing about my own firm.

12 January 2011

Confessions of a Beach Banker

After a decade in private banking in New York I moved to Southern California and submerged myself in show-coast society.

Martin was one of my first big clients. He was 86, tall and lanky, almost totally bald, with soupy blue eyes and a long nose half of which had been replaced with synthetic material due to intense sun damage sustained in his youth. His scalp and face were marked with sun-scars.

He originated from an old New York family of Dutch and German extraction; in fact his people were among the earliest settlers. He had attended Princeton University, a college in New Jersey, and was expected by his family to go into law.

After graduation, however, looking around at the small, stagnant, narrow-minded people among whom he was expected to spend the rest of his life, Martin left home one day and hopped aboard a passenger train bound for the West. He told me stories of opening the door of the rear car and pissing out the back as the train flew west through the Eastern states, a gesture of which I could tell he was most proud.

He landed in Southern California--in Orange County, to be exact, when it was little more than ranchland and a growing colony for the rich and famous of Los Angeles and the East Coast. In time Martin found work as a land agent, and, later, as a commercial real estate developer and investor. He married and had four children, two of whom entered the aerospace industry. Three of his grandchildren entered the real estate business and are currently very successful.

When I first met Martin he owned several large office buildings, in addition to his residential holdings. He owned houses in Honolulu, Newport Beach, Palm Springs, and New York and belonged to the best club in each city. His habitual outfit included a khaki linen jacket, blue or green checked shirt, khakis, and boat shoes. We bonded almost immediately. I complimented him on his "skinhead" haircut, which always made him laugh; he told me he had no choice in the matter. We traded stock ideas, though he was much more of a stock-trader than I ever was. His wealth, like that of most rich men in Southern California, had been built on real estate.

We regularly met for lunch at a small Middle Eastern restaurant on Pacific Coast Highway in Corona del Mar. Sometimes his fourth wife, a friendly German lady twenty years his junior, would join us. He would invariably launch into his reminscences. A constant theme was his disappointment with the quality of modern people; I could sympathise.

"Our people flew to the stars and landed on the moon," he would say, and then, gesturing to the people around us, including small exotic foreigners chattering in excited and unintelligible tones, "All they can do is line up at the welfare office".

In time I left the bank and joined a hedge fund concern. We met several times after that; but then, despite attempts to meet, lost touch.

18 December 2010

Dresscode UBS: Swiss Banker Style

• "A flawless appearance can bring inner peace and a sense of security."

• "Adopting impeccable behavior extends to impeccable presentation."

• "The garment is a critical form of non-verbal communication."

• "Jacket buttons should be closed. When seated, they must always be open."

• "Only when it is very hot, and after confirmation of your supervisor, can you wear the shirt without a jacket."

• "While blazers are equipped with pockets, they were not designed to contain a large number of personal effects or accessories. Leave these empty, so they do not deform."

• "The jacket should be closed when you stand or you're traveling."

• "The shoulders should have natural proportions: if the shoulders are too broad you will appear too big with a too-small head."

• "Conversely, too narrow shoulders could make your head look excessively large."

• "The jacket must completely cover your posterior."

• "Eyewear can only be in a subdued color range."

• "Ultra-trendy eyewear or too showy colored glasses are not tolerated. Ultra-hip glasses or lenses in gaudy colors are not allowed."

• "Make sure that your jewelry be matched to the metallic color of your frames."

• "Sunglasses cannot be worn on top of the head."

• "A scent should at first be perceptible at a distance - an arm's length - but should be discreet."

• "If you like wearing perfume or after-shave, remember, the scent of a perfume is more pleasant than being invaded by a fragrant cloud."

• "Try a new fragrance during your lunch break

• "Stop wearing bracelets and earrings."

• "Piercings, besides earrings, and tattoos are prohibited. Tattoos, piercings or anklets are outdated and do not look professional."

• "You can wear a watch to the extent it does not threaten safety."

• "Out of consideration for our foreign customers, avoid conspicuous religious symbols."

• "Factors that lead to the pollution of the skin are many. Since our skin is basically our 'first" garment, it requires care too."

• "We recommend protecting skin by applying a skin cream that consists of nourishing and soothing elements. Thus, your skin will appear beautiful and you will be radiant!"

• "If you wear a watch, it suggests reliability and that punctuality is of great concern to you."

• "An appropriate remedy to prolong the life of shoes is to replace heels early."

• "Always put on your shoes with the help of a shoehorn."

• "Completely unlace your shoes after use."

• "After having worn a pair of shoes, allow your shoes at least one day, so let the leather dry out and rest."

• "Each time you remove your suit, untie your tie and hang or wrap it."

• "Give your tie at least one rest day before reuse."

• "The tip of your tie should under no circumstances enter your pants." [I hate it when that happens - AC]

• "Underwear is among the most intimate parts of our clothing."

• "Your underwear must not be visible through your clothes, or stand out."

• "Your figure should not suffer from the way you wear your underwear."

• "Do not wash, nor ever iron your shirts yourself."

Sources: UBS and Business Insider

05 August 2010

Dating an Investment Banker: Where to Find Your Perfect Partner - 12 More Top Firms

The popular Wall Street dating website, Here is the City, has rated a further 12 top financial markets firms in terms of how likely they are to provide single females with their perfect partner. Here is the line-up:

***

Baird

Now these guys are dark horses. Easy to underestimate, you will get sucked in before you realise it. The have a subtle charm and an easy manner. They are also stayers. When they select you as their mate, it's usually for life.

BlackRock

Not the most sophisticated date you'll ever have. Don't expect much by way of romance either. More Wal-Mart than Harrods between the sheets, but at least it's over fairly quickly. They have a good heart, though, and mean well.

BNP Paribas

If you ever wanted proof that not all Frenchmen have smouldering good looks and are AAA-rated in bed, then just date someone from BNP Paribas. Say no more.

Cantor Fitzgerald

These guys have a bad reputation. Yes, he can be hard to handle, and he does enjoy himself with his mates, but he will always come home (even though you might never know where he's actually been). But life will never be dull, and you'll be very well looked after financially.

Houlihan Lokey

If it seems too good to be true, it usually is - but not with these guys. Tall, elegant, and totally at ease with themselves. Real men, who are in touch with their feminine side too - without wanting to dress up in your clothes, which is a bonus (unless you're into that sort of thing, of course).

HSBC

These guys are usually pretty boring, but boring isn't always bad. Remember, boring banks and boring bankers are in vogue these days. You won't have the biggest house in the street, and you won't own the flashiest car, but you'll get by. And if life is dull, well, you can always have a discrete affair.

Macquarie

It's just not true that these guys spend most of their time at work looking at soft porn - that was just one guy, and he did it by accident (and then only once!). The big downside, however, is that not everyone in the factory is a millionaire these days, and a girl might not be looked after as once she might.

Nomura

What you see is what you get with these guys (at least the original Nomura lot). They love life, and overindulge themselves at every opportunity. Everything they do, they do to excess. The problem is, they might not always have time for you.

The ex-Lehman guys are a different lot - they play their cards much closer to their chest, and will be more interested in preening themselves than complimenting you on how you look.

Royal Bank of Canada

These guys are men of integrity. They are upstanding members of the community, who will always treat you with respect. But cheat on them just once (and get caught), and you'll be out. And you'll never find out where the treasure is buried.

Royal Bank of Scotland

Don't be put off by the misconception that only Scottish people work in this firm. No, the Scots were simply those who were responsible for almost bankrupting it. And in any case, not all Scottish people are ginger; some are actually very nice.

Standard Bank

A right cool lot these guys. They were smart enough to get out of all the other firms when the troubles began, and are now sitting pretty in a decent bank going places. The big problem is that they are also clever enough to spot a gold digger at 20 paces.

Wells Fargo

These guys can be as wild as the West, but you wouldn't believe it to look at them. But after a drink, he's anybody's, and that's sometimes hard to live with.

24 July 2010

Dating an Investment Banker: Where to Find Your Perfect Partner - 12 Top Firms

Down at the investment bank, every day is a stress test. To relieve the pressure we inflict pranks on unsuspecting colleagues intending to embarrass and humiliate. Banter of an explicit racial and sexual nature abounds. We discuss in some detail the sexual merits of female bankers and office staff. Which is amusing I suppose when one learns they return the favour. Here is the City, a popular Wall Street dating website, rated 12 top financial firms in terms of how likely they are to provide single females with their perfect partner. Here is the list:

* * *

Bank of America Merrill Lynch

Keep to the guys who are based in the main financial centers, as the others can be a little rough around the edges. If you are looking for a life-long commitment, then these guys are generally not your best bet. The Merrill set, in particular, have been known to stray. Relationships can be very intense, yet of relatively short duration. These guys often have low boredom thresholds.

Barclays Capital

These guys are pretty smart, and are usually quite happy to splash their cash, bearing in mind uncle Bob Diamond is always happy to dish out big bonuses each year-end. Be a little careful, however, especially with the bankers who came over from Lehman - some of those guys had a lot of their net worth invested in that firm, and aren't now as well off as you might expect.

Citi

Those Citi boys are really quite a decent lot. Your mother would like them. They are generally respectful and are into commitment. You'll know where you stand. The only downside, however, is that they can be boringly conventional.

Commerzbank

If going out with a 'jack-the-lad' type appeals to you, then you should probably go hunting at Commerzbank. These guys might not earn the most money, but generally they have great sense of humours and enjoy a good night out. The downside is that your Commerzbank man might well prefer to be at Upton Park or Stamford Bridge, rather than at home having a romantic evening in with you.

Credit Suisse

Family men. Dull, but worthy. If it's a secure home and quiet family life you want, go fishing in the Credit Suisse pool. But it may be more exciting watching paint dry.

Deutsche Bank

Cool, polished, and debonair. Deutsche Bank man has the look (and feel) of James Bond about him - except the guys from Essex. In fact, you are probably better off searching out an Italian or US soulmate from the German bank (the place is full of them). It might take you a little longer to reel them in, but it will be worth it. And Italian bankers from Deutsche make the best lovers.

Goldman Sachs

What can you say about Gold man ? If you can bag him, you are in a no lose situation, although he is generally cautious, and wary of ladies who might see him as a meal ticket (which he is). And remember, those canny Goldman types always hedge their risks, so they probably have stashes of cash secreted away, and you'll never find out how much they are truly worth (and neither will your lawyer!).

Jefferies & Co

The firm might be a relatively small one, but these guys aren't small in any way. Generally tall and imposing, they are casual yet sophisticated. Many have huge packages (they do well at bonus time too). Intelligent and high-minded, the only downside is that they can be a little intimidating for a girl on the make.

JPMorgan

Imagine a firm full of little Jamie Dimons. Exquisite. OK, so there are a few Tesco Tonys (and Willy Wal-Marts) scattered around the firm, but JPMorgan men are the guys that will generally sweep you off your feet. If you are playing for keeps, look no further than Jamie's finest - each built in his image, and comes with a money-back guarantee!

Morgan Stanley

If you find a Morgan Stanley banker who is rich, free and single, you'll need to snap him up quickly. Girls put their names down early for these White Shoe boys. But be careful - you will have to pass the 'Mummy' test on both counts - you'll need to come from good stock to gain the approval of the family, and be made of stern stuff yourself, as babies are likely to come off the production line in quick succession following marriage.

Societe Generale

A glint in the eye, a warm French smile. Oodles of charm and fantastic sex. But your SocGen dream man will probably turn out to be happily married too.

UBS

Surprisingly adventurous and open-minded, UBS soulmates are generally good fun to be with. You'll need to be selective, however, as they are a mixed bunch. Keep away from the ones who might be into leather and latex though (unless that's really your thing).

24 September 2008

Confessions of a Beach Banker

I used to work for a European-based private bank in Southern California. My clients were successful, educated professionals looking for investment management, second loans, and lines of credit.

A typical client of mine was a high-level executive or entrepreneur from the East Coast, Europe, or the Middle East. Many of them owned several properties. Their primary residence was in, say, Corona del Mar, but they often owned condos or duplexes in less affluent areas nearby rented to Hispanics, Asians, and other immigrants. In fact, not a few of them told me they wanted to snap up more properties to take advantage of all the immigrants coming in. They were aspiring to be slumlords.

Almost all of these high net worth clients had a belief that the housing boom in Southern California would never end. It simply did not figure into their anlaysis. And it showed. Their mortgages were mostly ARMs, with little to no documentation required. Sometimes a quick 'phone call would suffice. The falsification of income and assets was commonplace, but at the bank we were encouraged to turn a blind eye. Of course, many of the loans and lines we extended to these clients were secured by investment portfolios.

Consumption was out of control. Good taste was rarely if ever noted. My associates were decked out in the latest from Armani, Patek Philippe, and Gucci. Square-toed shoes and loafers were the norm, even amongst people who should have known better. In my Brooks Brothers suits, black half brogues, and repp ties, I stood out from the sartorial crowd.

I was regularly invited to parties in Los Angeles, Newport Beach, and Laguna Beach, at which could be found an unremitting supply of girls and drugs. I recall going to a party at a beach front house in Laguna Beach. Piles of cocaine dotted a glass table in front of a large window overlooking the beach. People were having sex in the jacuzzi outside. I am too young to have experienced the excesses of the 1980s, but I imagine it was similar.

19 September 2008

Inimitable Moments

Last Saturday night, as the storm clouds gathered on the horizon and I lit a Montecristo No. 2 cigar, I was seized by a mild panic. Should a full-fledged economic crisis ensue, I thought, I might experience a disruption in the supply of quality cigars. Serious times call for serious measures, so I decided to ration my existing collection.

A week later, I can only smile. As you know, I am employed in the financial services sector; I run my own firm. I deal with hedge funds, HNWs, and property developers. The economic crisis in which the government and banks have plunged the country represents years of greed, corruption, and incompetence. It does not take a Wall Street quant to figure out how it happened. The signs were there for all to see. There were those of us who saw it coming and planned accordingly.

Almost two years ago I started trimming my real estate holdings in anticipation of a downturn. Unlike many local real estate professionals I know, who behaved as if they would live forever. It amuses me to watch these arrogant young pricks--many with Ivy League MBAs--come begging for money. Just a few years ago they were snapping up interest-only, 'no doc' loans in order to make a quick buck 'flipping' properties. They bought villas in Newport Beach, diamonds and face-lifts for their wives, expensive motor cars, private jets, mistresses, etc. The money has now dried up and they are hurting.

The chaps I do business with on the East Coast are hurting too. They are property developers and have over-extended themselves in a massive way. These old boys, with years of experience and business success behind them, are telling me they have not seen conditions like these in 40 years.

As I light another Montecristo No. 2 and pour a glass of chardonnay, taking care not to spill a drop on my Gucci loafers, I think of them. But only for a second or two. It would be unseemly to gloat. Self-satisfaction is such an ugly trait. I may be contemptuous and mocking; but smug, never.

18 October 2007

Economic Forecast 2008

One of my correspondents, a Laguna Beach-based private banker, recently attended a luncheon for high net worth investors featuring a talk given by Dr. Abidi, an economic forecaster based at a local university. There were several dozen people in attendance, including a few celebrities, while the majority consisted of investors, private bankers, investment professionals, and real estate developers.

As expected, Dr. Abidi presented a fairly bleak picture, though nothing he said should surprise us. With job growth and consumer spending down, and unemployment up, the next 2-5 years will be critical. Dr. Abidi's brief talk focused on the housing market, a subject on everyone's mind at the moment, especially here in Southern California. Home prices will continue to fall throughout 2008. He is predicting a a drop in local housing prices next year of almost 7%. The non-residential real estate market is still strong, he pointed out, but it will soon cool as well.

When asked where does he see investment opportunity, Dr. Abidi discussed international investments, particularly emerging markets. A weaker dollar currently makes foreign equities and currencies very attractve. Plus, foreign economies are enjoying higher growth than the US economy, which, he emphasised, was poised for lower growth in the next few years. I happen to agree with this assessment. Most of the investors of my acquaintance are moving their money into international funds, ADRs, or non-correlated alternative investments, including hedge funds and commodities.

The sartorial choices on display at the luncheon were varied. For the most part, local investors wore variations on a theme of navy blazer or tweed sport jacket, khakis, and loafers. A few youngsters sported striped shirts and square-toed shoes. The private banking contingent were mostly kitted out in ill-fitting navy suits. Tassel loafers from Cole Haan, Sperry, and Bass were in abundance, and most were worn with suits. One older gentleman was spotted wearing a pink OCBD, navy surcingle belt with a Bahamian crest motif, flat-front khakis, and brown-and-white saddle shoes. His companion was wearing a Vineyard Vines checked shirt.