For my homies at Lehman Brothers:I went home with the waitress
The way I always do
How was I to know
She was with the Russians, too?
I was gambling in Havana
I took a little risk
Send lawyers, guns and money
Dad, get me out of this ... Hyah!
I'm the innocent bystander
Somehow I got stuck
Between the rock and a hard place
And I'm down on my luck
Yes I'm down on my luck
Well I'm down on my luck
I'm hiding in Honduras
I'm a desperate man
Send lawyers, guns and money
The shit has hit the fan
All right
Send lawyers, guns and money ... Huh!
Uh... Send lawyers, guns and money ... Uhh!
Send lawyers, guns and money ... Hyah!
Send lawyers, guns and money ...
— Warren Zevon, Lawyers, Guns and Money
Peace out, bra. Chill.
© 2008 The Epicurean Dealmaker. All rights reserved.
Ya gotta love this country:MISSOULA, Mont. (AP) — A middle school teacher suffered some bruising and a big scratch on his back after he struck a bear while riding his bicycle to school.
Jim Litz said he was traveling about 25 mph Monday morning when he came upon a rise and spotted a black bear about 10 feet in front of him. He didn't have time to stop and T-boned the bruin.
He tumbled over the handlebars, his helmet hit the bear's back and the two went cartwheeling down the road.
The bear rolled over Litz's head, cracking his helmet, and scratched his back before scampering up a hill above the road.
Litz's wife drove by shortly after the crash and took her husband to the hospital. He hoped to be able to return to teaching science at Target Range Middle School on Friday.
NEW YORK, NY (AP) — Troubled investment bank CEO Dick Fuld suffered a bruised ego and a black mark on his resume after he struck a bear while riding his limousine to work.
Mr. Fuld said he was traveling about 30 mph Wednesday morning when he came upon the intersection of Wall Street and Broad and spotted David Einhorn about 10 feet in front of him. He didn't have time to stop and T-boned the bearish investor.
He tumbled out of the limo, his Blackberry hit the activist's back and the two went cartwheeling down Wall Street.
Mr. Einhorn rolled over Fuld's briefcase, scattering his restructuring documents, and scratched his Gucci loafers before scampering into a Starbucks across the road.
Bart McDade drove by shortly after the crash and took Mr. Fuld to the Fed's Discount Window. He hoped to be able to return to scowling menacingly at creditors and rating agency executives at Lehman Brothers on Friday.
WASILLA, AK (AP) — Vice Presidential candidate Sarah Palin suffered some jovial ribbing and a big dent to her reputation after she struck a moose while ferrying her children to soccer practice.
Ms Palin said she was traveling about 85 mph Tuesday morning when she came upon a school crossing and spotted a sleeping moose about 10 feet in front of her. She didn't have time to stop and T-boned the herbivore.
She tumbled out of her Expedition, her AK-47 hit the moose's back and the two went cartwheeling down the road.
The moose rolled over Palin's skinning knife but escaped without a scratch before scampering down a hill into the Arctic National Wildlife Refuge.
John McCain drove by shortly after the crash and took Ms Palin to the taxidermist. She hoped to be able to return to field-dressing Barack Obama in Virginia on Wednesday evening.
WASHINGTON, D.C. (AP) — Treasury Secretary Hank Paulson suffered a bruised balance sheet and a knock to his Teflon image after he struck a sour note while rescuing the federal housing agencies.
Secretary Paulson said he was spending about $200 billion Sunday evening when he came upon the wobbling GSEs and spotted a moral hazard about 10 feet in front of him. He didn't have time to stop and T-boned the metaphor.
He tumbled over the podium, his plan hit taxpayers and GSE shareholders in the pocketbook and the three went cartwheeling into uncharted territory.
The conservatorship rolled over Americans' sensibilities, undermining self-discipline, and cackled and scratched its balls before scampering down the corridor back to K Street.
Ben Bernanke drove by shortly after the crash and took Secretary Paulson to Capitol Hill. He hoped to be able to forget his stint in Washington as quickly as possible.
© 2008 The Epicurean Dealmaker. All rights reserved.
"We say to the management of companies: ‘You are here today. Where do you want to be five years from now, and how are you going to get there?’”
— Henry Kravis
Andrew Ross Sorkin and Julie Creswell authored a lengthy piece this past Sunday in the New York Times, entitled "What Does Henry Kravis Want?" Good question.
The gist of the article seems to be some extended head scratching about the private equity honcho's continued interest in taking his General Partner management company—the "KKR" which most people think about when they think about "KKR"—public through an initial public offering, notwithstanding the currently crappy market conditions for IPOs, leveraged buyouts, and bobbleheaded dolls bearing his own likeness or that of his partner George Roberts.
Like the Economist and other mainstream media reporters before them, Mr. Sorkin and Ms Cheswell profess to be confused by the fact that a private equity company would even entertain the thought of exposing its inner workings and private cafeteria menu to the withering gaze of the public markets and other riffraff. I, on the other hand, am confused by their confusion.
Perhaps they concluded that a gentleman of Mr. Kravis' abbreviated stature would naturally be particularly afflicted by the proverbial hobgoblin of consistency and were nonplussed when they failed to find it in his words and actions. But I could have told them that—"tiny eighties relic" or no—Mr. Kravis is by no means possessed of a little mind, and he and his partners and competitors in the institutionalized rape and pillage private equity industry have always had a complicated and situation-contingent love-hate relationship with the public markets.
Talented reportage or not, what amuses me is that the writers seem to have missed the very clue which could have enlightened them in the first place, a clue which they themselves drew attention to in the article. I speak, of course, of the quote from Mr. Kravis which adorns the top of this post, in which he alludes to KKR's standard practice of having their partner management teams develop extensive strategic, operational, and financial plans for the businesses which KKR buys with them. Surely Mr. Sorkin and Ms Cheswell did not think that a clever man like Mr. Kravis would fail to conduct the same simple planning exercise in his own personal and professional life?
Although, to be fair, reporters like Mr. Sorkin and Ms Cheswell would be unlikely to pursue this line of inquiry—even if it had occurred to them—without some sort of documentary evidence to back it up. Fortunately, your Dedicated Correspondent has access to a number of carefully screened, disgruntled current and former employees of KKR and other major PE houses to call upon for the manufacture discovery of titillating pieces of inside dope. A couple of phone calls and a kilo of cocaine later, and my sources delivered me a particularly revealing goody which shows just how far Mr. Kravis takes his own personal planning process.
The document is fragmentary, being just the first page of what appears to be a longer list, but I believe it speaks for itself:
Question answered, no?
Next time, Andrew, give me a call first, and I'll save you some shoe leather.
© 2008 The Epicurean Dealmaker. All rights reserved.
Ω ξειν’, αγγέλλειν Λακεδαιμονίοις ότι τηιδε
κείμεθα, τοίς κείνων ρήμασι πειθόμενοι.
Go tell the Spartans, stranger passing by,
that here, obedient to their laws, we lie.
— Simonides of Ceos
For some reason, Dear Readers, I have been spending a significant portion of my leisure time recently reading about King Leonidas, his 300 Spartans, and their suicidal stand against Xerxes' Persian hordes at Thermopylae in 480 BC.
I trace my current interest to the 2006 release of the sword-and-sandals epic, 300, which I personally found to be a more enjoyable piece of comic book art than the original Frank Miller creation itself (Gerard Butler's clotted Scottish accent notwithstanding). My interest has unquestionably deepened as I traversed the slippery slope of increasing realism, historical accuracy, and scholarship from Steven Pressfield's fictional Gates of Fire to Paul Cartledge's Thermopylae: The Battle That Changed the World.
Psychologically, the reasons for my current fascination with the topic are less clear to me. Perhaps it has something to do with the story of a small band of elite, hand-picked warriors battling hopelessly against overwhelming odds to preserve their freedom and way of life. One need not be too grandiose to draw parallels with the predicament of a shrinking band of highly trained investment bankers struggling desperately against a relentlessly rising tide of inactivity and an actively hostile society to preserve their right to three Lamborghinis in the driveway of a Hamptons potato mansion. Pathologically self-absorbed and massively egotistical, yes, but not grandiose.
Human psychology is such that we all like to imagine ourselves at the center of a dramatically coherent and meaningful story, whether we work in a Dilbert-style cubicle zoo or commute to weekly Executive Committee meetings on the company G550. And, pace the current wisdom concerning the evolutionary origins of investment bankers, the best scientific evidence available seems to indicate that most of them are indeed human. Investment bankers do have the same hopes and dreams as the rest of society. It just so happens that our dreams contain more champagne, caviar, and expensive Russian hookers than yours do.
Besides, the closer you look into this Thermopylae business, the more eerily exact and disturbing the parallels become. The battle itself is believed to have happened in the dog days of August, traditionally the nadir of capital markets and M&A activity and hence the scariest period on the investment banking calendar. This August in particular has been so dead that the typical jumpy, underemployed i-banker can be forgiven for seeing crouching Medean warriors—or HR associates armed with pink slips—lurking behind every Starbucks counter and Southampton hedgerow.
And notwithstanding the common man's perception of the Spartans as the Western World's first freedom fighters, marching bravely off to certain death for God, for Country, and for Yale, Spartan society was a deeply weird and rather repellent concoction, at least by current standards. The justifiably intimidating standing army of Sparta—which was composed of every adult Spartan male, for whom the role of full-time soldier was the only profession allowed—was in fact established and maintained primarily to control a vast underclass of enslaved Greeks known as Helots, upon whom the full-fledged Spartan citizens, male and female, relied to do all their labor.
Throw in officially sanctioned pederasty, fearsome women who expected their husbands to come home draped in glory or in a body bag, and the educational system of the agoge, which taught young boys to steal, lie, and do whatever it took to come out on top, and Spartan society begins to look disturbingly similar to investment banking culture. (I'll let you figure out where the pederasty comes in.) By many accounts, the Spartans were an arrogant, anti-intellectual, and unpleasant bunch, and their festival days must have looked a lot like the Hampton Classic horse show, minus the Ralph Lauren togs.
But the bugger(er)s were principled; you have to give them that. And, whether you believe it or not, most investment bankers are too. We just don't adhere to the principles most of the rest of society holds dear (or at least the principles the political correctness police loudly tells society it should hold dear). Cigar smoking, misogyny, excessively foul language, and a scornful disrespect for the meek and downtrodden are central to the Darwinian world view of your typical investment banker, and dearly held beliefs, too. On the plus side of the ledger, investment bankers do tend to hew to a punishing work ethic (at least the junior ones, before they learn the tricks of the trade from slacker MDs like me), and they clean up real nice. Some of them even—in a moment of weakness, I grant you—donate to charity. Who knew?
And, like the Spartans at the Hot Gates, the true threat to investment bankers' way of life does not really come from collapsing markets, vengeful regulators, or rioting shareholders: it comes via treachery from within. If any force has the capability to destroy all that is unique and special in investment banking culture, it is the bog-standard Human Resources department of your typical investment bank. Now—when banks are groaning under the pressure of plunging revenues and dousing smoking craters where their balance sheets used to be—is when the craven HR weenies crawl out from under their rocks and start swaggering around the halls waving sheaves of termination notices in their hands. They resort to each and every trick in their book to cull the bloated ranks of former Masters of the Universe, including enforcing the banks' internal PC behavior codes which normally remain dormant and unenforced when said MoUs are raking in the legal tender.
Therefore, we witness senseless little tragedies like the recent termination of fellow bloggist and investment banker 1-2 for the heinous crime of blogging while employed at some nameless über-bank. 1-2 seems to be taking it well, but his fate definitely casts a pall over the rest of us who undertake the occasional character assassination or fierce excoriation of some hapless boob in the industry from behind the comfy firewall of anonymity.
It is at times like these, with the PC Empire bearing down on the narrow defile where Yours Truly and a select few bloggers man the Phocian Gate in defense of truth, justice, and the Investment Banking Way, that my mind turns toward King Leonidas' laconic response to Xerxes' demand that the Spartans give up their weapons:
"Come and take them."
That—plus a few choice Anglo-Saxon epithets of rather more earthy persuasion—is what I mutter to myself whenever I sense the threatened approach of the nannies-that-be to confiscate the laptop, smoking jacket, and case of 20-year old Scotch which comprise the bulk of my blogging tools. They haven't caught me yet, but it may just be a matter of time.
Well, gotta go. Sounds like someone's banging on my office door with a battering ram, reciting the text of the Americans with Disabilities Act over a bullhorn. I guess they're coming for me.
I think I'll sit down, smoke a cigar, and comb my hair.
© 2007 The Epicurean Dealmaker. All rights reserved.
