Why bankers + free time = stupidity

Often, simply saying "I'm an investment banker" is enough to make women (esp at Establishment) swoon... if that's your thing. This list is for the more discerning banker, one who is trying to find a woman who is switched on and "gets it". And there's no better way to test her "getting-it-ness" than to pile on the jargon and see. So here we present the latest Frankenstein lovechild of banker brain power and permanently adolescent humour: banker pick-up lines.

1) Let's correlate.
2) That's not a Capital Market Line in my pocket.
3) No, it's not a Laplace distribution either.
4) I'm a big fan of two-asset models.
5) Only the price-earnings ratio matters, baby... your price, and my earnings.
6) You're already a positive NPV investment. (I've lowered my expected rate of return.)
7) I'd like to be on your efficient frontier.
8) I'll be the alpha, you be the beta.
9) I'm long-only.
10) I'd like to Ctrl + "+" then C if you'll let me.
11) I'm into M&M. No, I'm not talking about the chocolates either.
12) May I toggle your PIKs?
13) You can subordinate me tonight.
14) I'm experienced in long, drawn-out mergers.
15) Baby, you are the market portfolio.


P.S. I like this. "Take a quick look around you right now. If you are surrounded by attractive models, fast cars, and high-quality cocaine, you have a good pickup line. Either that or you are an investment banker, in which case you also probably have syphilis."

P.P.S. I don't have syphilis. Honestly.

What's he saying?

After Citi's $5.9B third quarter writedown, what is the very regal Citi CEO Charles O. Prince III saying here?


(a) "But luckily for me, it was your 5.9 billion dollars."
(b) "And I'll see YOU in the penthouse *wink*"
(c) "If I go down, you're coming with me."
(d) "You stay classy, Planet Earth."
(e) "Quick pull my finger, I can't hold it anymore!"

EXXXcel

You know you have a serious problem when this turns you on. I have already scheduled my appointment with a shrink.

I am where I should be.

R.I.P. Rockett Stepdad. I know you'd be stoked about where I am and what I do. Thanks for believing in me. I am where I should be. My only regret is, you only got to see it in your mind's eye.

Labour Day Holiday (oxymoron alert)

Last week was a little quieter than I expected. Or rather, my expectation did not normalise for the fact that last week was the annual Private Equity Schoolies Week, hence nothing gets done, unless you include golf and mistresses (phwoar indeed). It's like the grown-up version of all those school excursions to fun places... a site/activity is chosen, and it is somehow made to look weakly related to the curriculum to justify miles of beaches (Geography), Men's Gallery (Phys Ed), and rollercoasters (Maths, what else).

With the market being so hot right now (yawn), the office environment becomes a tinderbox, ready to explode at any moment. For example, on Friday night we nearly had to settle a heated argument about where we should go for Friday night drinks... with a coin toss. Luckily my leadership skills saved the day, and everyone managed to have an equally bad time all round.

Yesterday being a Labour Day holiday in this fair city, I decided to take advantage of the great weather and leave the office, Jimmy Cayne-style, for a game of golf. Unfortunately I had some trouble procuring my golf clubs (they are 'in transit', so to speak), and so I was reduced to borrowing the clubs for hire. Any hardcore belief that golf is a non-discriminatory sport was quickly assuaged by the fact that I, as a tall southpaw, was given the worst set of clubs I have seen in my life. I couldn't hold the clubs without nearly sitting down. The putter was short, skinny, crooked, and went both ways... who wants a stick like that? Needless to say, the craftsman was frustrated by his tools. I would have scored better kicking the ball along.

In general news unrelated to my golfing prowess:

UBS and Citi write off enough money for the past three months to give US $1 to every person alive (give or take a few dollars).

RAMS sells name to get cash to delay its death. I wish I could sell my name to pay off my debts too.

Signs of life or just a dead-cat bounce...

OK been a while since the last post, I figure it's time to show some minor sign of life. Maybe a link dump to warm up with...

For the young ones, who thought bank runs were a relic of the "old world" like the gold standard, Lotus 1-2-3 and EMH, Northern Rock must have been a fascinating read. And if the rumours of low-ball bids end up true, then I will flip out if Northern Rock executives reject the bids because they are "opportunistic" (as seems to be the excuse given by many management teams who are unlikely to be given equity in the acquired entity). Aren't all bids opportunistic?

An interesting take on magic, and its implications for IP law.

Investment bank third quarter reporting season is upon us, with Lehman Brothers and Morgan Stanley starting things off, and Goldman Sachs and Bear Stearns following on Thursday ET (Friday AEST). These firms have been in the middle of the current crisis, so their third quarter results will be very interesting if only as a barometer of the impact of the crisis on its most visible players. By the way, the Bear Stearns and Goldmans results announcements are open to the public; you can dial in for a live conference call (10am ET and 11am ET respectively), or download from their sites afterwards.

Since the last post, our US and UK sources have been reporting doom and gloom... credit markets are closed... devalued portfolios... massive (~US$400B-odd) overhang of loans that no one wants to buy... bankers trying to jump out of reinforced windows and instead bouncing back to the office floor... it's terrible.

Here though, we are seeing some twitching (though I wouldn't say "normality", given how flexible the term is). Semblances of deals are trickling in at a slower yet steady rate. Normally this would make me quite happy because deals = fees = nice fat bonus. The problem, however, is two-fold:
1) there still appears to be some insistence on pricing debt at pre-August levels; and
2) no one wants to commit!

The first issue is pretty easy to solve - you can wait it out until they come crawling back (as happened to a few major local deals already... though the "restructure" of the packages is more froth and optics than an actual restructure).

With the second issue, perhaps remind them of the fact that they are sitting on billion-dollar cash boxes if they don't do any deals - and a lazy balance sheet for a PE firm is (though tastily ironic to me) a sure way to lose your BSD status in the market. This is more of a medium-term approach though... sort of like tapping someone's leg with your boot for hours, and then when they eventually try to get up, they fall into a heap because you've pulped their muscle... but I digress.

Anyway, the situation is a double-edged sword: one the one hand, the crisis has weeded out a lot of terrible deals (though certainly not all...). On the other hand, even those sitting on very good, leverageable (note: must check if this is a bastardisation of the English language) businesses are hesitant to do deals - deals that any banker worth his salt will do without even blinking.

And it is wrecking my already Lara Flynn Boyle-esque social life. I had to turn down several invites because I "am juggling a number of deals"... and so far none of them have gravitated back to my hands yet. So I'm sitting there waiting for signs of life, when I could instead have been out and about, blessing this city's somewhat tolerable establishments with my presence. And I know, I JUST know, that they will all suddenly go live next week - just before the long weekend.

Lost magic

I previously posted here about the real diversification benefits of investing in wine and artwork (either directly or via the funds that do).

Anyway I was trawling through old not-so-urgent news and found this. A downturn in the art market? So if the values of residential properties, commercial properties, high-risk asset-backed debt, high-yield LBO debt, investment-grade corporate debt, stocks across the corporate spectrum, and "alternative assets" like artwork and wines seem to move in sync of each other... where are the diversification benefits when it matters the most?

Of course, none of this is really surprising for those who first heard about diversification in undergrad and thought it wasn't all it was cracked up to be (and hence subsequently struggled for brownie points from Investment Management lecturers). I remember in one class, the lecturer began explaining diversification thus:

Lecturer: "Don't put all your eggs in the one basket, that way if you drop one basket, you still have eggs in the other baskets."

Student: "What if all your baskets are in the same cart and it crashes?"

Lecturer (himself not that far out out undergrad): "... then you have a big problem."

ABSOLUTE NONSENSE: There is no truth to the rumours that I sparked the selloff in the art world with my blog entry, which was one month before the Bloomberg report in the above link. Of course, truth is only a small percentage of what moves the markets...