Neel Kashkari at the Wharton Finance Conference

November 8, 2008

Here is Interim Assistant Secretary of the Treasury for Financial Stability Neel Kashkari giving a talk at the recent Wharton Finance Conference. Given the impact that inevitable regulatory changes to the financial markets will have to private equity, as well as the role the newly socialist U.S. government is taking with banks, it’s of interest to everyone in the business to hear what the treasury is thinking (hopefully they’ll eventually be able to get the banks to actually use the money they’ve been given to issue loans).

Part 1:

Part 2:

Part 3:


Wharton Asks: Do the Answers to Our Current Financial Woes Lie in the Past?

October 4, 2008

Theories abound on which financial crisis of the past is most similar to the one we are currently living through (The Panic of 1873 and the Subsequent ‘Long Depression’?  Or perhaps it’s the Panic of 1907?  Then again maybe we need to go back to the Mississippi Bubble of the early 18th century?).  Of course the truth is that every panic is unique and someday the Credit Crunch will be a measuring board against which future turmoils will be compared.  Nonetheless much can be learned from these past events as the situations in which they arise remain eerily familiar (the more financial tools change, the more they stay the same!).

Here the good people at Wharton keep the comparisons a bit more recent and look at major banking issues that have struck the world in the past couple of decades.  Financial Historians must be estatic as they are living through times that are far more valuable than all the possible research material they could dig up in an archive.

Graphic: Banking Crisis Follows Period of Global Calm

October 1, 2008

Here’s an excellent chart depicting the calm before a banking storm. The graph comes from a research report published earlier this month by the International Monetary Fund. I’ve attached it for your reading pleasure.

Extended periods of stability can lead to some violent turbulence once the bubbles finally do burst.

Mums the Word on Calyon Job Cuts

September 8, 2008

With out of work bankers already in ample supply, there looks to be another thousand plus of them on the market to compete against soon-to-be business school grads for finance jobs.  Calyon, the oft forgotten stepchild of mother bank Crédit Agricole, is rumored to be slashing 1200 positions this week, but it’s not talking about it.  Most of the cuts would occur in London and New York (French banks are reluctant to reduce head count in the home market as they would face the wrath of a rather touchy and reactive legislature).

Given that the credit crunch hit back in August of last year, and that Crédit Agricole announced back in May that they planned on cutbacks at Calyon, it’s surprising that they decided to wait until now to make a move in personnel.  Oh well.  I guess they didn’t want to ruin anyone’s summer holiday!  Good luck to everyone waiting news in New York or London.  If things don’t work it’s always a good time to go back and get an MBA

The Spiral: Must See Web TV

August 25, 2008

From Equity Private (Going Private), it’s a five-part (thus far) series entitled the Spiral. Ballsy and brilliant!

Part I – Those Vultures

Part II – Managing Directors Everywhere

Part III – On Stage

Part IV – Liquidation

Part V – The Board

Graph of the Day: Price Multiple to Equity Contribution in Private Equity Deals Through Q2 2008

August 19, 2008

Here’s a rather clear demonstration of just how distorted price multiples in private equity deals got in the first half of 2007, which coupled with the credit crunch has forced several firms to turn more heavily to self-financing (which is really not such a bad thing!).