Monday, September 29, 2014

TED’s All Time Greatest Hits

They’re all money, honey
The person who experiences greatness must have a feeling for the myth he is in. He must reflect what is projected upon him. And he must have a strong sense of the sardonic. This is what uncouples him from belief in his own pretensions. The sardonic is all that permits him to move within himself. Without this quality, even occasional greatness will destroy a man.

— Frank Herbert, Dune

I have used the preceding epigraph before, as some of you Delightful Readers may recall. It is a versatile and thought-provoking sentiment. Like many quotes and excerpts from Dune, which I contend is one of the greatest science fiction novels ever written, it pleases and intrigues me. It also reminds me—when I am smitten with the unwarranted attention the criminally indiscriminate among you have bestowed upon the thin leavings I whimsically scatter here at unreliable intervals like some verbose will-o-the-wisp—that I am anything but great, or even worthy of attention. I use it sardonically, you see.

I am not without self awareness.

But now I have decided, for the nonce, to abandon you, as I have made clear before. Bummer that, but it cannot be helped. “To everything there is a season,” or some such bullshit. So it strikes me as only fair to post a list of the ten most popular posts I have ever released upon an unsuspecting and undeserving world,1 if only so some people can focus their anger at global injustice and bank overdraft fees on a similarly appalling yet perhaps more accessible target. It is better than reading Slate or Gawker or Jezebel or Guardian pieces, anyway. And they don’t need the page views, I do. I still owe a helluva lot of money for excess pixel consumption, you see.

So enjoy, and please remember to deposit your candy wrappers, empty soda bottles, and previously unexamined prejudices in the handy trash receptacles at the end of the show.

THE CANONICAL CANON, All-Time Canonical Edition:

1) Curriculum Vitae (March 2013) — The canonical career path for young tadpoles to hoary old bullfrogs in my business, corporate finance and M&A. This is what your life will look like if you choose to follow me, children. Warts and all.

2) The Mouth of Sauron (February 2010) — A hit piece, richly deserved, on the fabled former mouthpiece of Goldman Sachs, Lucas van Praag, who is no doubt happily torturing small animals with forks on a leafy Victorian estate in his dotage.

3) The Rules (November 2012) — Read them. Live by them. Pay particular attention to Rule #5.

4) Jane, You Ignorant Slut (May 2011) — The opening salvo in a series of posts about rampant ignorance in the financial press and blogosphere about the nature and mechanics of initial public offerings. This rabbit hole is deep, Alice. Beware.

5) The Invention of Leisure (November 2013) — Junior investment bankers work hard. No matter what people may say or think or do about it, this will not change, and there are very good reasons for that. Not bad reasons, good reasons. See Rule #5.

6) Overheard at 85 Broad Street (June 2008) — An old post in which I eviscerate those gutless weasels at Goldman Sachs who fucked over junior bankers during the Financial Crisis in a particularly cowardly and reprehensible way. I can neither confirm nor deny rumors that Goldman moved its global headquarters to 200 West Street solely to escape the historical opprobrium of this post.

7) Go Ask Alice (September 2013) — The bookend to the series on IPOs, begun with 4) above. Read these two, and the intervening posts, and you will know more about IPOs than most investment bankers and all financial pundits.

8) A Fine Disregard for the Rules (January 2014) — More reasons why junior investment bankers work like dogs and always will, no matter how many foosball tables and papaya soy lattes Google and Facebook try to tempt them with.

9) To Catch a Thief (February 2009) — Do investment bank executives strike you as, well, a little odd? I suspect you are right.

10) Where Did He Learn to Negotiate Like That? (August 2014) — Investment bankers, by training and inclination, tend to be much better negotiators than many of their clients. Occasionally this works to the client’s disadvantage.

* * *

Since these posts are ranked here, as is my custom, simply by aggregate historical page views as collected by Google Analytics, some of you may notice a recency bias, as the number of readers coming to these pages has accreted over time like barnacles on the hull of a poorly maintained ocean freighter. You will also notice a narrower range of topics and treatments than your local bartender may have informed you I offer, which is related to said recency. Those masochists among you who would like to explore both deeper in time and more broadly across my variegated oeuvre I would encourage to start in the archives and use my idiosyncratic keywords and Blogger’s search function liberally. There is nothing for it but to dive in, headfirst, and try to stay afloat on my sea of words, just as a tyro investment banker plunges into her apprenticeship of fire.

The metaphors are deep, O Dearly Beloved, and mixed. Welcome to my world.

Related reading:
Table of Contents — the archives
Topics Addressed in These Pages — idiosyncratic keywords

1 I exclude, as is my custom, generic results like this blog’s home page, recommended reading, outdated personal information, introductory blather, and my curated archives. I suspect you can have no objection.

© 2014 The Epicurean Dealmaker. All rights reserved.

Saturday, September 20, 2014

Oop. Time, She’s Up

Just an old fossil
“I am old, Gandalf. I don’t look it, but I am beginning to feel it in my heart of hearts. Well-preserved indeed! Why, I feel all thin, sort of stretched, if you know what I mean: like butter that has been scraped over too much bread. That can’t be right. I need a change, or something.”

― J.R.R. Tolkien, The Lord of the Rings

When I launched this blog seven and three-quarters years ago, O Dearly Beloved, my first post incorporated the following mission statement:
I have started this blog to comment on what I consider to be a fascinating part of the global economy: the global market for M&A and its various inhabitants, participants, and miscreants. Hopefully I will be able to relate some interesting anecdotes, a few enlightening opinions, and a couple of amusing stories that will shed a little more light (or a little more laughter) on what remains for many a murky area best left to investment bankers, corporate lawyers, and other such terrifying bogeymen.
Five hundred and sixty-six published posts later, more or less, plus a lumber room of unpublished fragments, ruminations, and provocations, I think I am ready to declare victory and move on. This is not necessarily because even I believe that I have achieved victory, mind you. That is for you Lovely People and the sub-sub-librarians of internet history to judge. But one of the advantages of running a blogsite of which you are the sole, unimpeachable authority, author, and editor rolled into one is the ability to make such unilateral declarations without fear of pesky contradiction from the peanut gallery. (I have not made it a policy here to prevent comments for nothing, children. If you object I can direct you to a convenient pile of nearby sand which needs pounding.)

Of course those of you who have made an intermittent study, intentional or not, of my ramblings on this site will be aware that my output has both exceeded and failed to satisfy my stated mission of explaining the market for corporate mergers & acquisitions. The lion’s share of this mission creep (or evasion, if you will), I must put down to my lack of discipline: I have used this platform to hold forth on all sorts of topics and sundry, many of which fall far afield from the cloistered halls of buying, selling, and financing companies, which is my primary trade. I have addressed mildly cognate fields like private equity, Corporate America, and the history, structure, and pay of the investment banking industry; more tenuously related areas including hedge funds, capital markets, and financial regulation; and wildly off-topic digressions such as higher education, philosophy, and identity in the age of Facebook and the NSA. I have indulged my fancy for humor without regard for its funniness to anyone else, and I have waded into culture and art criticism without shame or regard for my lack of training or expertise therein. I have posted pictures and poems that appealed to me, for no other reason than I could.

In other words, I have written about what interests me, in addition to that much narrower and shallower range of topics to which I legitimately claim any expertise. The curated list of my more prominent posts runs to many pixels and reveals the breadth of my work. I remain unapologetic about this. This site is a personal blog, not a public service. Those of you who disagree with my choices are welcome to join the protestors from the first paragraph at the nearby mound of silica, etc., etc.

* * *

I was lucky to start blogging when I did. Financial markets had reached a peak of silliness which offered rich fodder to a financially literate cynic such as myself. Soon, the global financial crisis elbowed aside these more pedestrian concerns to offer a rich and exciting topic for me to both demonstrate my naturally firmer grasp on markets and the financial industry than the legions of panicky and underinformed journalists and pundits who were scrambling to understand and report it and also learn more about the crisis’s players, issues, and concerns than I had theretofore known myself. While I claim no particular merit for having done so, I take pride in contributing some measure of rational, grounded knowledge and facts to a society-wide conversation about the Panic which was badly in need of them. I even tried to contribute more serious thinking to the reform of financial regulation in this context, but sadly that seed fell on stony ground.

Subsequently, I think I have contributed some things of use to the broader understanding of investment banking and financial markets, including reality-based commentary on initial public offerings, illumination of the ways and byways of careers in my industry, and a little insight into the plight and prospect of women in high powered careers like mine. Hopefully these small contributions have added something of value to the public understanding and hence social weal. If so, I am glad. If not, well, you all got what you paid for.

But now I have reached a pass where I find it increasingly difficult to maintain any sort of regular posting on these pages. Most of what I have to say about things I know I have already said, often more than once. I have come to realize I will never convince those who believe in their bones that investment banking and financial markets are useless, evil, or a social liability rather than a boon. People who use the word “bankster” unreflectively and unironically are not now and never will be interested in what I have to say. People who have a more nuanced understanding, or who continue to form their opinions on the matter, have many more sources today than they used to to call upon, and a much broader and deeper understanding of these issues in the press. I hope I have contributed in some small way to this education. Unless sinks beneath the waves, people should always be able to find my blatherings on these topics gathering dust at this location for handy reference anyway.

I expect I will continue to maintain this site in some small way, perhaps adding a post here and there to the topic listing at the Table of Contents and maybe even doing a final and/or comprehensive post of Greatest Hits. But I do not anticipate blogging here regularly any more. I have reached the end of the interests and expanded mission which drove me to launch myself into cyberspace in the first place. Now I am most interested in topics where I am a student and a learner, not a master, and I want to spend the not inconsiderable time I have devoted in the past to explaining financial arcana and beating back the ignorance of the unfair and unjust here to reading and thinking about others’ expertise and ideas instead.

* * *

If I find I have something interesting to say, never fear, O Faithful and Long-Disappointed Readers, I will probably say it here. Those of you who know me via this opinion emporium probably have little doubt of that. I am the sort of person in fact whom it is almost impossible to shut up. It just is unlikely to be a regular affair, and this site is likely to sink into desuetude and decay as the years lengthen. Whether I decide to pop up in some other form, at some other place, I have yet to decide.

If I do, I’ll be sure to drop you a postcard. Cheerio.

Related reading:
Fragments (February 26, 2010)
Table of Contents (February 16, 2013 and passim)

© 2014 The Epicurean Dealmaker. All rights reserved.

Sunday, September 14, 2014

Some Work of Noble Note May Yet Be Done

What is the price and cost of duty? What is its pleasure?
We are not now that strength which in old days
Moved earth and heaven, that which we are, we are,
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.

— Alfred Lord Tennyson, “Ulysses

Ever since the release of Dr. No in 1962, the James Bond 007 films have acted as a touchstone and running commentary on popular culture and society. For over half a century, a parade of different Bonds, Bond Girls, and increasingly over the top villains have offered escapist fantasies of varying implausibility and ridiculousness which have served, inter alia, as travel brochures, fashion statements, and advertisements for the benefits, drawbacks, and terrors of technological progress. They have done this, for the most part, not because it was their makers’ purpose (or even within their power) to critique society, but rather because they were intended to be hip, with it, and relevant, even at the inevitable expense of any seriousness or credibility. (Roger Moore, anyone?) With various degrees of success, these pop confections have held a mirror up to society. It is no wonder not everybody likes what they see.

These thoughts were inspired by film critic A.O. Scott’s interesting essay on the death of adulthood in American culture, which seems to be making the rounds of the culturesphere. He says many things, but his major point seems to be that popular culture, moviemaking preeminent within it, has elevated a strain of anti-adulthood and fixation on youth long dominant in American culture to the forefront of everything we see. I am not qualified to judge the correctness of his claim, but it certainly does seem to me the flight from responsibility and adulthood and the joys and tribulations of perpetual adolescence have become a leading subtext or topic for a very large number of popular entertainments nowadays. In particular, this cultural conversation seems to be focused on men and boys and their refusal to grow up.

Interestingly, upon reading Scott’s essay, my thoughts turned immediately to the most recent film in the Bond series, Skyfall. It occurred to me this movie can be read as providing a very interesting commentary on the issues of growing up, responsibility, and adulthood for a man nowadays, even if—or perhaps because—it is wrapped up in a popular escapist spy thriller. I claim no special cultural profundity for the film, nor no searing insight for the filmmakers or screenwriters, but I think the mirror which this particular thriller holds up to our current zeitgeist is pretty revealing. Even if the cultural critique I read within it was unconscious, or only semi-intentional, that does not vitiate its insight or force. Perhaps it enhances it. You Delightful Readers can judge for yourselves. If Stanley Cavell can find deep commentary on Hamlet embedded in Alfred Hitchcock’s North by Northwest, I can certainly tease a bildungsroman out of a Bond film. It’s my blog, anyway.

* * *

I will not tax your patience by relating the plot or other details of the film which you can discover yourself if you like. Nor will I spare you any spoilers. If you have not seen it already, there is no plot element I can reveal that will diminish your appreciation of the movie as cultural critique. In my experience, anyway, it is a measure of the quality of a story that you are willing to reread or rewatch it even when you know how it turns out. Skyfall is that good a movie.

The key plot points I would draw your attention to are as follows:

  • At the beginning of the film, Bond is accidentally shot by his competent, no-nonsense assistant while attempting to recover a stolen data file from the top of a train barreling toward a tunnel of no return (cue Alfred Hitchcock and Sigmund Freud). Bond’s assistant, who happens to be black and female, shoots him on the explicit orders of their boss at British intelligence, “M,” who, while white and old, also happens to be female (Judi Dench). Bond, by the way, is an orphan who has a simultaneously fraught and close relationship with M which a casual observer could mistake for a mother–son dynamic.
  • After plunging to his apparent death in deep water (cue Carl Jung, opening credits, and Adele’s theme song), we later discover Bond is alive after all, although he appears to be hiding from M and MI-6 in an exotic backwater and spending his time in self-destructive drinking, meaningless sex, and taunting dangerous arachnids for thrills and money.
  • Bond comes back home to mother M when he hears she and MI-6 are under attack by a mysterious hacker who can penetrate British intelligence’s defenses at will. M displays no regret, casually informs Bond she has sold his home and all his belongings, and puts him into a crash course to get fit for active duty again, at which he struggles painfully. Nice homecoming.
  • Bond tracks the mysterious hacker through various exotic locales and the beds of one or two expendable women to an abandoned island off the China coast, where he discovers a platinum blond Javier Bardem who minces and lisps and puts the moves on our trussed up spy. Bardem, it seems, is Bond’s evil twin, who is pissed at M for betraying him to the Chinese. He has channeled his anger into a worldwide empire of computer intelligence and manipulation, which he sells to the highest bidder. Strangely, though, this evil computer genius uses data screens that look like video games.
  • After more plot machinations and an unsuccessful attempt on M’s life by Bardem (for an evil computer genius, he’s pretty lame with a gun), Bond flees with M to his ancient family home in Scotland, Skyfall, where he acquired what an MI-6 psychologist called his “pathological rejection of authority due to unresolved childhood trauma.” Bond himself tells M they’re going “into the past.” For transportation, they use Sean Connery–Bond’s Aston Martin DB5 from 1964’s Goldfinger. Into the past, indeed.
  • An epic battle ensues at Skyfall, in which Bond, M, and Bond’s old gamekeeper and surrogate father battle Bardem and his small army, resulting in the destruction of Skyfall (which Bond hates), the Aston Martin DB5 (which only seems to mildly irritate Bond), and Bardem’s army. Bardem tracks a wounded M to a chapel where, while trying to persuade her to shoot both herself and him in the head to end their misery, Bond literally stabs Bardem in the back with a large hunting knife. So much for homosexual tension with your evil twin.
  • Finally, after blessing Bond with her approval, M dies.
* * *

Now of course everyone who watches Skyfall knows all about James Bond. (All Bond movies assume it.) He is a charming, ruthless killer, a master manipulator with no empathy who treats friendly and hostile women alike like Kleenex and enemies like target practice. He is unmarried and childless, a man with no duties or responsibilities other than his job, which he often does grudgingly and against orders. Come what may, he always wins, usually punctuating his triumph with a cynical joke. As a cultural symbol of the last half century, James Bond is Peter Pan with a gun. For a British character he is as American as they come.

And yet in Skyfall he is betrayed and (symbolically) killed by women (including his mother), he falls into adolescent irresponsibility and self destruction, he is blocked and belittled by the genius avatars of today’s high technology (one of whom is gay or bisexual and the other is so young he still has spots), and he struggles not very successfully against physical and intellectual decrepitude. What more comprehensive list of challenges facing modern American man can one compile? What greater list of fears and blocks to maturity torture the brains of today’s man: emasculation, obsolescence, irrelevance, sexual confusion, self-indulgence, failure, age?

But Skyfall’s James Bond does not remain on the beach in India to sulk, boozing for breakfast and daring scorpions to sting him. He does not smoke pot and play Parcheesi with his stoner 30-something friends while the world burns or skip dates with beautiful women far out of his class to rearrange his vintage comic book collection. He is no Marvel superhero or genetically enhanced super soldier who can pretend to be invincible. This James Bond is the most vincible hero we have seen. And yet he picks himself up painfully, dusts himself off, and throws himself back into a game he is not sure—we are not sure—he can win, because it is his duty.1 This is the opposite of the flight from adulthood. This is its embrace: the embrace of duty and responsibility. If there is a bubblegum escapist fantasy thriller which offers a better critique of the flight from adulthood—yet does not shy away from depicting how difficult and costly adulthood is—than this, I do not know what it is.

* * *

At one point, as Bardem’s villain bears down on M’s public hearing to kill her and Bond sprints through the streets of Whitehall to stop him, Judi Dench–M recites the conclusion from Alfred Lord Tennyson’s poem “Ulysses” at the top of this post. The effect is inspirational, as we fully understand by now the effort and will it requires for Bond to push his aged, broken-down body through the streets to rescue both the head of his service and the only woman he has considered his mother for his entire adult life.

And yet Bond is not Tennyson’s Ulysses, a selfish, vain old man who wants to abandon his aged wife—who waited patiently for him for twenty years of wandering—his dutiful son, and his own people, to fling himself onto the wine dark sea once more in search of glory and adventure. No, Bond is a soldier, a dutiful son who dons his buckler and sword to wade again and again into the blood and mud of the battlefield, risking life and limb for the country which is his only family and his only allegiance. At the end of the movie, Mallory–M welcomes him into his new office—the original Bernard Lee–M’s office, down to the paneling, soundproofed door, and paintings on the wall; a fine, full circle the filmmakers have crafted for us2—and tells him as he tosses a new mission brief onto the desk, “So, 007, lots to be done. Are you ready to get back to work?”

Bond replies with a smile, “With pleasure, M. With pleasure.”

That is adulthood, children. That is what it means to be a man.

Related reading:
A.O. Scott, The Death of Adulthood in American Culture (The New York Times, September 11, 2014)

1 I am not overlooking the element of revenge in Bond’s motivation; it is undoubtedly there. But this is just to say that Bond’s character’s motivations are multifarious and complex, as they are in real life. This makes Skyfall a better film, if a more complicated and ambiguous one in many respects.
2 Note how, having reset the location of M’s office back to its setting from the very first film of the series, the filmmakers have also given enough backstory and proof of Mallory’s personal courage and toughness to justify his position in M’s chair. No longer just a fat, slightly ridiculous old man behind a desk, M’s role as leader and father to James Bond has been justified to us and to Bond. This little bit of the patriarchy, at least, makes sense again.

© 2014 The Epicurean Dealmaker. All rights reserved.

Wednesday, September 3, 2014

Amakudari Revisited

Thomas Nast, Mr. Moneybags
“If you were sensible of your own good, you would not wish to quit the sphere in which you have been brought up.”
“In marrying your nephew, I should not consider myself as quitting that sphere. He is a gentleman; I am a gentleman’s daughter; so far we are equal.”
“True. You are a gentleman’s daughter. But who was your mother? Who are your uncles and aunts? Do not imagine me ignorant of their condition.”
“Whatever my connections may be,” said Elizabeth, “if your nephew does not object to them, they can be nothing to you.”

— Jane Austen, Pride and Prejudice

Newly listed advisory boutique Moelis & Company set the cat among the pigeons yesterday by announcing it has hired former House Majority Leader Eric Cantor to be a director of the company and a Vice Chairman in their advisory group. This news seems to have pleased approximately everybody, from Moelis & Co., which is delighted with their prominent and newsworthy new hire; Mr. Cantor himself, who can anticipate being approximately $3.4 million richer over the next 18 months or so; and up to and including critics of the Washington-to-Wall Street revolving door, who are now in possession of rich fodder for tut-tutting opinion pieces bemoaning the sorry state into which our crony capitalist democracy has sunk. In Washington, D.C. and on Wall Street as well, it is an ill wind that blows nobody any good.

While the generous cash and restricted stock which Mr. Cantor is receiving from his new employer seems to have been viewed by most as sufficient and self-evident explanation of why he chose to accept Moelis’s offer, there does seem to be some confusion among certain commentators as to why Moelis wanted him. Dennis Kelleher, former Senate staffer and head of non-profit public interest lobbying group Better Markets—about which nobody was talking last week and about which everybody (or at least a larger number of somebodies) is talking this week, thanks to said announcement—claims loudly that Moelis hired Cantor because 1) they wanted the publicity, 2) they want his political insight and connections to lobby for legislation and regulation favorable to their business, and 3) they want to matter more in Washington. While Matt Levine effectively deflates the more grandiose and overreaching of Mr. Kelleher’s claims—and particularly punctures the notion that a focused advisory boutique like Moelis & Co., which faces few of the proprietary trading or balance sheet capital issues its larger integrated universal bank competitors do, has common cause with said competitors in shaping the larger regulatory agenda—I cannot disagree with the broad outline of Mr. Kelleher’s remarks.

The important nuance which I would add, however, is that Moelis’s hire of Mr. Cantor must be examined in light of their mission as a client-focused advisory firm. Mr. Kelleher’s claims gain more weight if one properly understands that, notwithstanding the official job titles which Moelis & Co. have granted the deposed ex-Congressman, his real role at the company should be understood as Pet Famous Politician.1

As such, Mr. Cantor has several interrelated roles and duties:
  • Publicity magnet – To raise, by his very presence, the profile and awareness of Moelis & Company in Washington, D.C., the news media, and the general population at large. Ken Moelis, while broadly known on Wall Street and among the business community, does not carry the star wattage to pull this off by himself. This is known as general brand advertising.
  • Fame whore magnet – Notwithstanding all their wealth, power, and influence in the economy—and their often low opinion of and fraught relationship with government—even the most illustrious businessperson tends to get a flutter of excitement when they meet a well-known politician. This can probably be laid to the fact that even the meanest politician tends to have fame and celebrity status well in excess of the average business leader, and almost everybody is curious to meet a celebrity. It also probably has to do with the fact that politicians tend to have power, and business people tend to be the kind of people who are attracted to power.
  • Door opener – As Messrs. Kelleher and Levine both agree, Mr. Cantor is neither trained in nor necessarily exhibits any of the transaction processing skills of an advisory investment banker. Nevertheless, Mr. Cantor is likely to have some contacts in his Rolodex whom his new colleagues would love to get in front of to pitch their wares, and I am sure they will hand him a prioritized call list as soon as he walks in the door. Even if Mr. Cantor does not personally know all of his employer’s prospective clients, senior calling officers will be eager to use him as bait (see Fame whore magnet, supra and Subject matter expert, infra) to get that key meeting with a high priority target CEO or Board of Directors which they’ve been trying to break into for ages. The kind of large, high profile clients which a Moelis & Co. wants to work with tend to have overwhelming numbers of investment bankers constantly importuning them for business and usually limit their work to a small handful of trusted relationships. Hence they tend to keep unknown bankers at a firm arms length. The flimsiest excuse to get a client to open the door and take a meeting—“Hey, come meet the former House Majority Leader of Congress!”—is welcome. Besides, correctly or not, most senior bankers believe once they get in front of a client they have the skill to win the assignment themselves; all it takes is access. Mr. Cantor will only have to smile, relate a few political war stories, and then shut up.
  • Subject matter expert – Our ex-Congressman does have one obvious skill set which is highly valuable in corporate advisory work and which is cultivated assiduously by senior bankers eager to build a name and a business for themselves: he is very well connected and extremely knowledgable in an important segment of the economy and the dealmaking environment. The fact that his subject matter is relevant in multiple dimensions to almost every business which Moelis & Co. would like to serve is just icing on the cake. Chief Executives and Board directors will be exceedingly interested in the insights Mr. Cantor can share about who knows what, who hates whom, and how things get done inside the Beltway, because in almost every instance that will have a direct effect on their daily business and/or the particular capital raising, M&A, or corporate finance transaction at hand. This is an area where Mr. Cantor will be able to add real content to the discussion and share valuable information and intelligence all on his own, and it won’t involve him smiling and shaking hands like a bobble doll.
  • Deal originator – Of course, under the right circumstances, there is nothing to prevent Mr. Cantor from using the assets and attractants listed above to source his very own transactions, instead of just contributing to those of his colleagues. This would certainly entitle him, in my book, to a shot at much larger incentive compensation than Moelis & Co. have guaranteed him for joining the firm. There is also circumstantial evidence that Mr. Cantor may indeed have key senior investment banker skills of a high order. After all, a very large component of his job as Congressman and House Majority Leader involved selling, creative dealmaking, and high stakes, high pressure negotiation. These are the critical skills a senior investment banker must bring to bear to win assignments and close transactions, not filling in spreadsheets or wordsmithing press releases. That’s what the little people do. If Mr. Cantor is looking for inspiration along these lines, he could do worse than consult the case of Rahm Emanuel, who turned a senior political aide position in the Clinton administration into a two-and-a-half year stint at Wasserstein Perella that earned him over $18 million.
Perhaps Mr. Cantor is not quite so unworthy after all.

* * *

Of course, in your wonted role as Clever and Discriminating Readers, you delightful people will already have noted that nowhere in my speculative litany of tasks for which Moelis & Company may have hired our peripatetic politician is the duty of lobbyist. It is possible, of course, that his employer does anticipate fielding Mr. Cantor back inside the Beltway when his current restrictions expire. But, if so, I suspect any such lobbying will be indirect and done on behalf of clients rather than for Moelis & Co. itself. In fact, I venture to guess Mr. Cantor will most likely offer access and intelligence on whom to contact within government to his employers and clients, rather than leading any direct or indirect lobbying charge himself. After all, if he pulls off his other roles appropriately, he will be both too busy and making too much money for the firm to spend much time hanging out with politicians and regulators.

I suppose this is the best explanation of both Mr. Cantor’s appeal to an investment bank like Moelis and the amount of money a former Congressman like him can make via amakudari. Like it or not, government is important to business, and the people who know how it works, how to make it work, and whom to work to make it work carry extremely valuable intelligence, even if they do not meddle directly in the process. In fact, I suspect Moelis & Co. spends less on senior lobbyists than they hope and intend to pay Mr. Cantor.

After all, investment banks are in the business of making money. Not changing regulations.

Related reading:
Moelis & Company, Form 8-K dated September 2, 2014
Annie Lowrey, What Eric Cantor Is Really Going to Do on Wall Street (New York, September 2, 2014)
Matt Levine, What Can a House Majority Leader Do for a Bank? (BloombergView, September 2, 2014)
Timothy P. Carney, Cantor’s not lobbying, but his big payday should upset conservatives (Washington Examiner, September 2, 2014)
Amakudari (January 20, 2007)

1 It is important to note I claim no special insight into Moelis & Company’s actual rationale for hiring Mr. Cantor or its future plans for him. These remarks constitute rank speculation, based solely on public information and my over 20 years of experience in the Wall Street septic tank, not privileged insider information. That being said, I have seen similar scenarios before, and they almost all fit the pattern which I lay out for you charming people above. My rank speculation, in this instance, is probably a pretty good guess.

© 2014 The Epicurean Dealmaker. All rights reserved.

Monday, September 1, 2014

Labor Day

It is the tunnel which makes the light at the end of it beautiful
Diego Rivera, Melancholy Promenade, 1904
Thomasina: “Oh, Septimus! — can you bear it? All the lost plays of the Athenians! Two hundred at least by Aeschylus, Sophocles, Euripides — thousands of poems — Aristotle’s own library! … How can we sleep for grief?”
Septimus: “By counting our stock. Seven plays from Aeschylus, seven from Sophocles, nineteen from Euripides, my lady! You should no more grieve for the rest than for a buckle lost from your first shoe, or for your lesson book which will be lost when you are old. We shed as we pick up, like travellers who must carry everything in their arms, and what we let fall will be picked up by those behind. The procession is very long and life is very short. We die on the march. But there is nothing outside the march so nothing can be lost to it. The missing plays of Sophocles will turn up piece by piece, or be written again in another language. Ancient cures for diseases will reveal themselves once more. Mathematical discoveries glimpsed and lost to view will have their time again. You do not suppose, my lady, that if all of Archimedes had been hiding in the great library of Alexandria, we would be at a loss for a corkscrew?”

— Tom Stoppard, Arcadia

Do you take stock, regularly, of what you are carrying in your arms, Gentle Reader? Do you take care to pick up and discard the right things, things which make you happy and proud to carry? Do you seek out and cultivate those things you will be pleased to press into the arms of companions who go on without you? Things they will be eager to carry themselves? Love, knowledge, kindness, and wisdom are big things, things which fill up your arms and your soul, but paradoxically weigh next to nothing: they are easy to carry. They make excellent gifts to bequeath at the end of your long journey.

Keep your eyes on the road before you. Stay alert for good things to add to your burden. Those are the legacy you will contribute to the march. That is how we will remember you.

It’s time to go back to work.

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