Oh No You Di'int

"Don't make me angry. You wouldn't like me when I'm angry."

— The Incredible Hulk

Oh, no, no, no, no, no.

Nuh-unh. No way. Forget it.

John Carney over at Clusterstock called my attention this morning to a little nugget in The Wall Street Journal which I missed yesterday. In retrospect, I understand why I skipped over the offending piece, because it started in the most unsurprising and anodyne way possible:

Financial Firms Lobby to Cut Cost of TARP Exit

By DAMIAN PALETTA and DEBORAH SOLOMON

WASHINGTON -- The banking industry is aggressively lobbying the Treasury Department to make it less costly for financial institutions to get out of the Troubled Asset Relief Program.

Big whoop, right? That's what I thought, and that's why I didn't even bother to scan the rest of the article. Who needs to read about yet another pork-fed banker from East Bumfuck, Arkansas complaining how those evil, socialist TARP funds prevent him from serving deep-fried Twinkies to his retail customers? Not me.

Fortunately, however, Carney actually read the thing, as good journalists are wont to do. Then he offered up a slightly more accurate headline for what is going on:

Banks Lobby To Screw Taxpayers Out Of Billions

Well, that caught my attention. Being a taxpayer and all.

* * *

It turns out those clever little scamps from K Street are pressuring the government to "expunge," or void, the warrants the Treasury Department received in TARP funds recipients' stock when it loaned them the money. The Journal explains:

Many banks want to return their TARP money and, as part of that effort, want to expunge the warrants. To do that, banks must either buy them back from the government or allow the Treasury to sell them to private investors.

...

Bankers say it is unfair to charge what amounts to a "prepayment penalty," which makes it additionally onerous to escape TARP. Bank representatives say the cost of buying back the warrants could be equivalent to paying 60% annual interest on short-term loans. That, they argue, would exacerbate banks' existing problems.

Aww. Poor, poor pitiful bankers. Don't you just bleed for them?

But Carney detects a darker subtext to the article:

The banking sector lobbyists have been arguing that they should be allowed to purchase the warrants back at deeply discounted values, or [perhaps] even have them cancelled outright on the grounds that they are currently worthless.

Based on some key passages from the WSJ article, and what I know of human depravity, I suspect he is right. But the rub here is that these warrants are in no way worthless, even though the prices at which the Treasury could exercise them and exchange them for common stock are currently above the market prices for the underlying banks' stock.

* * *

In fact, they are extremely valuable. (Carney's source pegs the combined value of the Goldman and JPMorgan warrants alone at around $3 billion.) It is pretty easy to understand why.

Simply put, a warrant is nothing more complicated than a long-dated, privately contracted form of call option on an underlying stock. The key word here is "option." The warrant holder has the option, not the obligation, to exchange the warrant for shares of the underlying stock at any time during the life of the security. Therefore, the fact that the underlying stock is trading below the exchange or exercise price at any one time (i.e., is "out of the money") means approximately bupkis. The warrant still has value, because the holder still has an opportunity to exchange it for stock at a profit at any time during the remaining life of the warrant.

Unless you believe there is absolutely no chance that any of the bank stocks subject to the TARP warrants will ever climb higher than their exercise prices over the next nine or so years, you have absolutely no basis to claim that the warrants are worthless. In fact, I might venture out onto a limb and speculate that even such a rank, moldy piece shit as Citigroup stock might crawl out of the cellar sometime in the next decade. (Well, don't quote me on that.) Ten years is a very long time, in market terms.




The handy-dandy graph above shows the relationship between the value of a call option, or warrant, at any one time, and the option's "intrinsic value," or "moneyness," which represents the value of the underlying stock minus the exercise (or "strike") price of the option. You can see that an option always has value, even if it is out of the money. This is because there is always the possibility that the underlying stock could move in the option holder's favor, thereby coming into the money and generating a profit. You will also notice that, even at the far right edge of the graph, where the option is deep in the money, the option is still worth more than its intrinsic value alone. As long as any time whatsoever remains to expiration, a call option gives its holder an opportunity to make more money if the stock moves up even further and also confers the valuable right to walk away without exercising if the stock suddenly drops far enough to make exercise uneconomic. Obtain such rights over a highly volatile stock like Citigroup or Bank of America for ten years, and you have a really valuable piece of paper.

You would think the self-styled paper of record for financial matters in the United States would understand this. (It is Options 101.) You would be wrong. Instead, the Journal reporters spoon feed their readers this bit of tendentious nonsense:

Today, most of the warrants are essentially worthless, because their exercise price is higher than where most banks' stocks are trading. But the government believes the warrants still have value, since they give the Treasury the right to buy common stock at a set price for 10 years.

You got that, Rick Santelli? The warrants really are worthless, but the government "believes" they still have value. And we all know if the current government "believes" something, it must be cover for a creeping socialist plot. If any recent Journal sentence is more likely to end up on a hand-lettered poster carried by a financially illiterate troglodyte at the next anti-government "Tea Party," I would like to know what it is.

So I can throw up now and get it over with.

* * *

Anyway, I am with Carney in hoping there is someone at Treasury who is smarter than these reporters, and who has the taxpayers' interests enough at heart to beat the crap out of any banker who comes whining for relief with such disingenuous bullshit. Someone also needs to take Barney Frank aside so he can head this attack off at the pass in Congress, too. I shudder to think what mincemeat a clever banking lobbyist can make of the bog standard Congressman or -woman who can't balance his or her checkbook.

Frankly, getting warrants in the underlying stock of the TARP recipients was one of the few elements of the whole misbegotten process I thought the Treasury got right. If we taxpayers are going to pull the collective chestnuts of a bunch of incompetent boobs out of the fire by lending vast amounts of funds at below-market interest rates, I—unreconstructed capitalist that I am—sure as hell want to make sure we share in said boobs' potential recovery. No (balance sheet) remediation without (profit) participation, you might say.

But in the final analysis, I worry that Tim Geithner and his three junior colleagues at Treasury persist in bringing rusty penknives to a gun fight. Career bureaucrats and third-year Analysts fired from Merrill Lynch just can't compete with investment bankers who compute option vegas in their heads and persuade Eastern European prostitutes to pay them for sex.

You need some help, man. Hire some real bankers to negotiate for you.

The offer still stands. Call me.

© 2009 The Epicurean Dealmaker. All rights reserved.

Welcome to Duloc!

“I just know before this is over I’m gonna need a whole lotta serious therapy. Lookit my eye twitchin’.”

— Shrek

It appears that, notwithstanding my diligent efforts to the contrary, more and more hapless boobs poor misguided souls are independently discovering or being intentionally directed toward these pages.

Today’s¹ precipitous surge of ten new visitors seems to have been triggered by a malicious Tweet from blogging legend Paul Kedrosky, who clearly got pissed off at his Twitter followers for some reason or other this afternoon and steered them this direction in retaliation. One can only imagine the sort of misdeeds Mr. Kedrosky’s acolytes must have perpetrated which could make the normally equable pundit snap so viciously. [*Shudder*]

Aannny-hoo. Here you are, so I suppose I should offer some sort of desultory introduction to the site.

DESULTORY INTRODUCTION TO THIS SITE
Most of what you need to know is already scattered about this location, but since I am known for recondite, abstruse, and impossibly verbose verbal stylings, I thought for courtesy’s sake I would collect them here in one clean, nifty, well-lighted post. That way, once you have discovered that your innate interest in my pontifications ranks slightly below having your genitals gnawed off by ill-tempered, mutated sea bass with laser beams attached to their heads, you can slink quietly away without disturbing the less discriminating readers among my audience.

Herewith, perhaps, are some of the thoughts which may be roiling your pretty little heads right now:

Who the hell is this guy?: (Funny, that’s what Steve Schwarzman keeps asking.) I am me: investment banker, M&A guru, economic and financial commentator without portfolio, guy on a bell tower with an AK-47. They haven’t caught me yet, and I’ll be damned if they ever do.

What the hell do you write about?: Oh, you know: life, the universe, and everything.² More specifically, I tend to focus on those areas which I happen to know a little bit about, like M&A, investment banking, financial markets, a smidgen of non-traditional economics, and industry-standard binomial-lattice pricing models for Star Trek memorabilia.

Focusing on what I know is one of the traits which distinguishes me from 99.9% of all professional bloggers (and Nobel laureate economists) in the universe. Should you be interested in reading some stuff by other members of this select 0.1%, you can find them to your left under “Recommended reading.”

Why the hell haven’t I heard of you before?: How the fuck do I know? Do I look like your mother?

Seriously, though, no-one has heard of me. That’s part of my charm. So, read quickly before Kedrosky or somebody else sends another ten guys over to louse up the party and drink all our beer.

Why the hell don’t you allow comments on your site?: Are you kidding? With the kind of language you’re using right now? This is a goddamn family blogsite, fer chrissakes. Geez.

In all seriousness, I don’t have time to wade through thousands of vulgar, harebrained responses by the likes of Steve Schwarzman and Paul Krugman to the impeccably balanced and thoughtful word bombs I post here. I have a day job, you see. At least until my partners fire me and revoke my charter membership to the Emperor’s Club. So forget it.

Should you feel absolutely convinced that you have something incredibly important to say to me, feel free to send me an e-mail via the instructions contained in the “About your dedicated bloggist” section of this website. I promise to read it before deleting it, and if you include valuable insider trading stock tips or a foolproof way to win the New York Lottery, I may even send you a small token of appreciation in return. Word to the wise, though: don’t hold your breath.

I am sure you all have a passel of pressing questions yet to be answered, but frankly I can’t be bothered right now. Come back in six months or so, and I might post another scintillating gem of heartbreaking genius for your entertainment. Or not.

In any event, this post is over. Piss off.

¹ I am nothing if not topical. “Today,” in this instance, refers to the original date of this posting. Since I intend this introduction to remain standing long after Manhattan has sunk beneath the waves, I encourage you to jump lightly over the temporal reference without excessive concern. Sort of like you might jump over some character’s Russian patronymic in a Tolstoy novel, if you’re into that sort of thing. If the world has changed so much that you don't know what I mean by Twitter and Tweets, well ... I can't help you.
² Anyone diligent enough to have clicked the links above has discovered that it is integral to my peculiar genius to foil easy searching of these archives by less-than-dedicated readers. No trite, obvious keywords here. So, if you want to find something specific, like “Pictures of Steve Schwarzman fucking a goat” or “High speed rail service in Mogadishu, Somalia,” may I direct you to the upper left corner of your screen? There you will find a remarkably straightforward Blogger.com search box which should satisfy your cravings. Enjoy!

© 2009 The Epicurean Dealmaker. All rights reserved.

Weekend Tonic

A faithful reader writes that I have become over-strident and harsh in some of my recent scribblings. This is fair criticism. Enforced inactivity in my profession and uncertainty in the economy wear on me, just as I presume they do on many of you.

As a modest token of amends, please accept these offerings from two of my betters as helpmeets to improve your weekend mood:

When I play on my fiddle in Dooney,
Folk dance like a wave of the sea;
My cousin is priest in Kilvarnet,
My brother in Mocharabuiee.

I passed my brother and cousin:
They read in their books of prayer;
I read in my book of songs
I bought at the Sligo fair.

When we come at the end of time,
To Peter sitting in state,
He will smile on the three old spirits,
But call me first through the gate;

For the good are always the merry,
Save by an evil chance,
And the merry love the fiddle,
And the merry love to dance:

And when the folk there spy me,
They will all come up to me,
With ‘Here is the fiddler of Dooney!’
And dance like a wave of the sea.

— William Butler Yeats, The Fiddler of Dooney

Even old men have lessons to teach, sometimes.

© 2009 The Epicurean Dealmaker. All rights reserved.

A Heartbreaking Work of Staggering Hubris

Let’s see. How hard can writing a query letter to a literary agent be?

Dear [Agent name],

I chose to submit to you because of your wonderful taste in [genre], and because you [personalized tidbit about agent].

[protagonist name] is a [description of protagonist] living in [setting]. But when [complicating incident], [protagonist name] must [protagonist's quest] and [verb] [villain] in order to [protagonist's goal].

[title] is a [word count] work of [genre]. I am the author of [author's credits (optional)], and this is my first novel.

Thank you for your time, and I look forward to hearing from you soon.

Best wishes,
[your name]

Right. Let’s do this.

– I –

Dear [Agent name],

I have chosen to submit my work to you due to your impeccable taste in anonymous financial blogs, and because you seem to be careless enough to have opened this e-mail rather than deleting it unread. I like the combination of flawless aesthetic judgment and complete ignorance of proper time management principles this indicates. I feel we could work together well.

Albert Nothnagle III is a rich, brilliant, staggeringly handsome investment banker living and working in New York City in the early years of the 21st Century. Albert’s life seems complete, with a devoted wife, impossibly talented and accomplished children, and a series of stunningly beautiful Ukranian mistresses gracing the silken sheets of the impeccably decorated bedroom in his capacious pied à terre. But when jealous coworkers and zealous federal prosecutors go after Albert on trumped-up charges of insider trading and naked jaywalking, he must rediscover his inner Ayn Rand and humiliate his detractors in order to secure an invitation to deliver the keynote address at Davos.

NOTHNAGLE UNBOUND is a 70,000-word work of wishful thinking nostalgic financial fiction. I am the author of several unpublished erotic letters to Gisele Bündchen, and this is my first novel.

Thank you for your time, and I look forward to hearing from you soon.

Best wishes,
The Epicurean Dealmaker

Nah. No-one would would believe such a fairy tale. Investment bankers can’t afford Ukranian mistresses nowadays.

[ ... ]

– VI –

Dear [Agent name],

I chose to submit to you when I saw your picture on your agency’s website wearing that godawful toupée. Anyone that insensitive to ridicule should find marketing my book a cinch. I anticipate a close working relationship.

Apu Nahasapeemapetilon is a plucky, cheerful, staggeringly intelligent financial engineer living and working in London, England in the latter years of the first decade of the 21st Century. Apu’s life seems complete, with a devoted cat, adorably geeky coworkers and friends, and a complete collection of bootleg Battlestar Galactica episodes never before aired on television. But when the global financial system begins to melt down and correlations across all asset classes converge to one, he must battle his way across a wracked and burning London convulsed with G20 protesters in order to reboot the Amiga laptop at the heart of Morgan Stanley’s global risk management system and, naturally, save the planet.

THE COPULA IDENTITY is a 80,000-word hodgepodge of Mandelbrot distributions and engineering suspense, enlivened by several original curry recipes. I am the author of the industry standard binomial-lattice pricing model for Star Trek memorabilia, and this is my first work in English.

Thank you for your time, and I look forward to hearing from you soon.

Best wishes,
The Epicurean Dealmaker

Hmm. Too esoteric? I like the idea of the curry recipes, though.

[ ... ]

– XXIII –

Dear [Agent name],

I am sending you this e-mail because you are the last name on my list. I expect a very large advance check.

The Epicurean Dealmaker is a sour, misanthropic, staggeringly verbose anonymous blogger who claims to live and work in Manhattan during the present day. TED’s life used to be complete, with fawning subordinates, more money than God, and the unalloyed admiration of Fed Chairmen and MBA students alike. But when the heads of most major investment banks decide en masse to shit the bed, he must find some way to monetize the thousands of words he has spewed forth on the internet in order to make payments on the Lamborghini.

INVESTMENT BANKERS CAN’T WRITE is a 120,000-word semi-fictional memoir of a friend of mine who really, really does exist. I am the author of caustic character assassinations and semi-instructional diatribes on the web, and this is my first time trying to write while sober.

Thank you for your time. Don’t fuck with me.

Best wishes,
The Epicurean Dealmaker

I like it. Click “send.”


© 2009 The Epicurean Dealmaker. All rights reserved.

Done to Death by Slanderous Tongues

Leonato: "Which is the villain? Let me see his eyes,
That, when I note another man like him,
I may avoid him. Which of these is he?"
Borachio: "If you would know your wronger, look on me."
Leonato: "Art thou the slave that with thy breath hast kill'd
Mine innocent child?"
Borachio: "Yea, even I alone."
Leonato: "No, not so, villain; thou beliest thyself:
Here stand a pair of honourable men;
A third is fled, that had a hand in it.
I thank you, princes, for my daughter's death:
Record it with your high and worthy deeds.
'Twas bravely done, if you bethink you of it."

— Much Ado About Nothing

I tell you what, my friends.

I understand the widespread anger average citizens feel toward bankers and their kind. I really do. In fact, I believe a large portion of that opprobrium is very well-deserved. Greed, arrogance, stupidity, and hubris have permeated the financial services industry over the last several decades, and when the recent credit bubble burst and the inevitable shit hit the fan, many individuals were justifiably upset that they were splattered with debris as well.

I personally am seriously pissed off, as my own net worth and investments are in tatters, my business of advising corporations is lying comatose on a hospital gurney, and my tax bill for the indefinite future is likely to reach the stratosphere in order to pay for the reckless bumbling of the feckless knuckleheads who were in charge of our financial system this past decade. And who, by the way, raised the price of every good and service I consumed these past years through the increased pressure of their stratospheric pay.

That being said, I am getting pretty goddamned sick and tired of ill-informed, self-righteous, ignorant assholes taking gratuitous pot shots at my industry and the people who work in it, simply because they are too intellectually lazy to address the problem in all its complexity and nuance. Too many well-educated commentators and pundits in a position of influence and authority—people who should know better—are channeling the CAPS LOCK hooligans in the comments section of the blogosphere with virtually no filter. When they do so, they come across—to me, at least, and to anyone who has more than a passing acquaintance with the global finance industry—as damn fools.

Or worse.

* * *

Exhibit A in the List of Shame is Steven Pearlstein of The Washington Post, who penned this this little gem of character assassination last week:

The most important is culture -- in the case of Wall Street, a culture that not only tolerates but almost celebrates taking advantage of customers. Here is an industry in which brokers traditionally get their start making cold calls to strangers, offering bogus stock tips, and investment bankers cut their teeth peddling bad merger and acquisition ideas to corporate clients. It is an industry in which the majority of money managers consistently underperform the broad market averages, analysts and strategists are almost always bullish, and firms rarely run into a security that can't be brought to market. These days, Wall Street is a place where the trading culture has supplanted the investment culture and score is kept on the basis of how many securities a banker or a firm underwrites rather than whether those securities actually turn out as good investments.

Leaving aside the minor quibble that it is not Wall Street's job to make sure every security that ends up in Mr. Pearlstein's 401K is a "good investment," whatever the fuck that is supposed to mean, I take severe umbrage at his characterization of my colleagues and me as shysters, hucksters, and con artists.

I don't know what kind of stockbroker Mr. Pearlstein is familiar with, but I can assure him that most practicing financial advisors haven't knowingly peddled a "bogus stock tip" to an existing or potential client in their entire careers. Sure, there are bad apples, and even a few bad firms that spring up from time to time (usually during an investment boom driven and eagerly participated in by credulous sheep who view investing as just another get-rich-quick scheme), but in the past our industry has made a point of getting rid of these as soon as possible. It's just good business practice to do so, you see. We don't want the friggin' lawsuits.

And, in twenty years of offering M&A and financial advice to corporate clients, I have yet to meet someone who has intentionally pushed a "bad" M&A idea to a client, either. Sure, I've been in pitches where a banker has proposed silly, ill-thought-out, or downright stupid M&A ideas to a client, but those instances are either unintentional—in which case the client throws the banker out of his office and said banker usually gets fired in the next round of layoffs—or intentionally designed to provoke a deeper and more productive dialogue with the client.

And by the way, who the fuck is Mr. Pearlstein to judge what is or is not a "bad" M&A idea? Just another passenger on the "All M&A is Bad" bandwagon originated by self-interested consulting firms and supported with ludicrously weak "event studies" which claim to identify value creation or destruction from M&A based on stock price performance before and after a deal? Poppycock.

I might just as well label the entire print journalism profession a meretricious collection of liars, fakers, and unscrupulous hacks based upon the evidence of a few bad apples like Jayson Blair. I, however, have the intellectual honesty to know better. (I also lack the financial incentive, unlike Mr. Pearlstein and his fellow journos, to tell my audience what they want to hear, whether or not it is correct.)

* * *

Exhibit B in this slander fest is that great man and Nobel laureate Paul Krugman, who dished up his own poisonous stew of half-truths and innuendo last week as well. He cited the work of Thomas Philippon and Ariel Resheff—which I have referred to approvingly in the past—describing the waxing and waning of the domestic finance industry in this country over the last century. What Mr. Krugman seemed to miss, however, was what I have taken to be one of Messrs. Philippon and Resheff's principal points: that the size of the financial services sector has fluctuated in the past in response to structural shifts in the economy and variation in demand for financial services like securities underwriting, capital formation, and M&A from non-financial companies.

Instead, he regaled his audience with crowd pleasing nuggets like this:

The banking industry that emerged from [the Great Depression] was tightly regulated, far less colorful than it had been before the Depression, and far less lucrative for those who ran it. Banking became boring, partly because bankers were so conservative about lending: Household debt, which had fallen sharply as a percentage of G.D.P. during the Depression and World War II, stayed far below pre-1930s levels.

Strange to say, this era of boring banking was also an era of spectacular economic progress for most Americans.

After 1980, however, as the political winds shifted, many of the regulations on banks were lifted — and banking became exciting again. Debt began rising rapidly, eventually reaching just about the same level relative to G.D.P. as in 1929. And the financial industry exploded in size. By the middle of this decade, it accounted for a third of corporate profits.

Of course, the implication a casual reader of this passage would derive is that the size of the financial sector is almost wholly dependent on how big the government allows it to be. Until the eighties, bankers were boring and conservative. Constrained by regulation, they just didn't allow anyone to borrow money. Happiness, economic prosperity, and moral rectitude broke out all over the place. Then, the nasty eighties intervened, government shackles came off the greedy and grasping bankers, and they spent the next thirty years ramming debt of every description down the throats of (presumably) reluctant corporations and consumers because they wanted to grow their exciting industry and get rich.

Nowhere in this narrative is the notion that bank and other financial intermediaries grew in response to a sustained increase in demand for their services from corporate and individual consumers.

Huh?

Would the esteemed economist from The New York Times care to explain to me exactly how the finance industry was able to unilaterally increase demand for its services while drastically expanding its operating margins? Maybe I don't remember my entry-level Economics so good, but that strikes me as a somewhat dubious proposition. And yet, that is exactly the conclusion an inattentive or ill-informed reader would draw from Mr. Krugman's tendentious screed: regulate those nasty bankers, before they force our country to lever up and make them filthy rich again!

* * *

I am thankful that Charles Davi at The Atlantic has spared me further heavy lifting by dousing Brad DeLong and Matt Yglesias, who are Exhibits C and D in this shitshow, with a curative dose of cold water. Sadly, I fear we have not seen the last of such pandering. It plays too well.

This strain of commentary is all part and parcel of one of the dominant memes circulating our culture at present: that somehow, someone (else) has tricked our innocent asses into this mess, and we'll be damned if we don't detect evil self-dealing and conscious fraud wafting off the perpetrators. At its core, the idea seems to be that dishonest and greedy bankers have been able to magic demand for their toxic products and services out of thin air, for their benefit and our ruin. It is a dishonest notion, designed to comfort the rest of us that we had no complicity in our own victimhood. In this way, it smells to me just like the dotcom bust did, when retail investors and stock market commentators alike screamed bloody murder that Wall Street forced them into gambling their kids' college funds on Pets.com. The damage is more widely spread this time, of course, but so is the culpability. This is not a popular message to impart.

Nevertheless, it's past time for economic commentators who aspire to something more than leading the mob from the front to display some intellectual courage and integrity in addressing the current financial crisis, rather than rousing the rabble. There is plenty of important and interesting material to discuss, and there may even be an interesting and useful policy proposal or two that might come out of the mix.

Failing that, from my point of view they are more than welcome to shut the fuck up.

© 2009 The Epicurean Dealmaker. All rights reserved.

The Investment Banker in Winter

I have a confession to make, Dear Readers.

Many of you may think of me as a devil-may-care, gimlet-eyed, barbéd-tongued man-about-town¹ and raconteur, but I am not everything that I seem.

For one thing, while I am in truth an investment banker and have been so for nearly two decades, I do not come to this industry with the typical investment banking pedigree. Sure, I went to university at one of the usual institutional suspects of higher embezzlement education, one complete with leafy groves, an endowment bigger than the gross domestic product of Botswana, and other typical accoutrements. I also received my license to rape and pillage as a certified Master of Business Asphyxiation from another of the gleaming temples of capitalist culture, one of those places where business ethics and common sense go to die.

But I do not come from a long line of investment bankers. Neither am I the black sheep seed of an upstanding pillar of a small Midwestern community, one whose prospects in life, should he wish to avoid imprisonment in the local jail, are necessarily limited to the French Foreign Legion, investment banking, or some other of the slightly distasteful professions which society maintains to employ its otherwise unwanted miscreants.

Furthermore, I did not study finance or economics in college. Then, as now, I found the topic of standard economic theory staggeringly boring, and permeated throughout with unwarranted aspirations to scientific and mathematical rigor which even I, in my barely post-adolescent state of intellectual innocence, found presumptuous and laughable. As you might imagine, I satisfied my one economics requirement without distinction and never looked back.

My ministrations at the altar of Mammon in pursuit of my MBA were similarly limited and unenthusiastic. Sure, I absorbed the lessons of CAPM, option theory, and other required parts of the canon with suitably diligent attention, but I cannot say the experience formed a high point in my intellectual development. Not that MBA programs are designed to be such, mind you: Harvard imprimatur or not, business schools in the United States are little more than glorified trade schools for "knowledge workers." ^{2, 3}

If a typical career path for investment banking is currently exemplified by a second-generation immigrant from the Indian subcontinent who graduated magna cum laude in Economics from Wharton undergrad, worked for two years as an Analyst in Financial Sponsors at Goldman Sachs, returned to earn an MBA from Harvard, and who currently works at Morgan Stanley—which is a fair précis of, oh, about 93.2% of everyone currently working in the industry—then you can safely assume I do not match the pattern. Why then, you may ask, did you ever join the industry?

Well, there's a story.

* * *

Without delving too deeply into the many years I spent wandering in the wilderness of the non-financial (i.e., "real") world between college and business school, be it known that this interlude was highly revelatory for me. I discovered, as I passed through a number of different jobs, that what I enjoyed most in all my disparate employments was the learning curve associated with each new position. While I was learning the ins and outs of new responsibilities and the variable intellectual content associated with a new profession, I found myself energized, happy, and fulfilled. But when, inevitably, the job became routine I quickly began to go quietly insane.

Eventually, I learned that which an observant companion could have told me years ago (but to whom I probably would not have listened, anyway): I have the attention span of a gnat. Give me variety, give me change, and give me shifting duties and responsibilities, and I rise to the challenge. Give me stasis, or curse me with routine, and I have to leave.

Now, as a young man even I had friends who worked in the investment banking industry, and while I was not masochistically attracted to the perpetual abuse they endured as footsoldiers in the front lines of finance, I did observe that their jobs were positively replete with splendiferous variety. Putting aside the putative glamor of overnight trips to Beijing or the burden of long, caffeine-soaked hours at the printer's, these friends were blessed—to my eyes—with unending variation in the types of deals, clients, and industries they worked on. That looked like the sort of life for me, given that my alternate plan of retiring to the South of France on the proceeds from the NY Lottery looked less certain than my monthly bills required. So, I applied to business school, in order to earn the double-secret handshake MBA certificate necessary to gain entry to Wall Street.

Almost 20 years later, I am still there.

* * *

Why the confessional now?, you may inquire.

Well, the truth is that for the first time in my career, which on the whole has been gratifyingly variable and interesting—frustrating, infuriating, and demeaning as well, of course, but never dull—I am bored out of my fucking skull.

M&A, with the exception of certain blessed industries like healthcare and financial institutions, in which I sadly do not participate, is flat on its back. In fact, M&A is so dead that the only reason the corpse hasn't been put into the morgue already is that the investment banks have fired all the orderlies who might otherwise take it there.

Corporate clients who are otherwise healthy remain firmly ensconced in their reinforced bunkers, refusing to even peek over the parapet for fear of getting their heads shot off by rampaging stockholders, government assassins without portfolio, or the ever-present and ever-intimidating vicissitudes of the ongoing recession. Clients with plenty of cash and the rare publicly-traded stock that smells better than three-week-old halibut refuse to even consider bold and aggressive corporate moves, no matter how cheap the sixteen properties they have been lusting after for decades become. Private equity, of course, is so underemployed that the majority of PE professionals have already become bored of masturbating to YouPorn during office hours. And distressed companies? Don't even get me started.

It got so bad last week that I floated around for days afterwards on the basis of a rare, lengthy intelligent conversation I had with a potential client. A client, by the way, who told me in no uncertain terms that they would reconsider buy-side M&A no earlier than six months after Hell freezes over, assuming the Geithner plan has not bombed us all back to the Stone Age. But shit! Someone actually talked with me. About M&A stuff. Damn, that felt good.

The mainstream media and the blogosphere are not improving my mood, either. Mainstream economics, economic policy, and economist and pseudo-economist wankers are dominating the airwaves, and I've already told you what I think about that. Periodically, I will rouse myself from my semi-slumber to consider a post I might make concerning these oh-so-weighty issues and arguments. But then I think: who the fuck cares? Certainly not me.

* * *

All I can say is it's a sorry state of affairs when someone with the attention span of a gnat cannot find stimulation or satisfaction. I blame all of you for this. If you don't pull your collective heads out of your collective assholes soon, I will be forced—out of sheer boredom and spite—to convert this site into a political and cultural opinion forum.

And trust me, you sure as hell don't want to see that.

¹ Herewith, I am starting a blog-based competition on the most extensive use of hyphenated adjectives in a self-descriptive context. After due deliberation, I declare myself the winner and plan to award myself a modest but attractive honorarium. Thanks for playing.
² Which is why I find it hilarious that HBS is currently undertaking formal navel-gazing in response to recent events. For chrissakes, Harvard Business School is capitalism's fucking shrine to conventional wisdom. Why in God's name should we expect its graduates to know any better?
³ It may offer you some insight into my mindset to reveal that the most interesting course I took there was a PhD seminar on the causes and origins of the Industrial Revolution. Fascinating history, economics, and culture, and not a damn equation in sight. Of course, it was a joint course offering with the Graduate History Department.

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