Tuesday, October 28, 2008

Book Recommendation

Just finished The Year of Living Dangerously, and I highly recommend it.

It is a romance set in a time and place where romance was still possible, because the world was uncertain and shifting, and life's decisions could be swayed one way or another, creating possibilities for both tragedy and good fortune.

The descriptions of Sukarno's Indonesia of the mid-60's and the political turmoil surrounding it are haunting, and create the perfect backdrop for an interesting novel.

It was apparently made into a movie, and I'm setting off right now to NetFlix to put it in the queue.

Monday, October 27, 2008

The real cause of the financial mess

Caution: severely off-color blog post potty humor

Sometimes as I ponder this latest financial crisis, I wonder about its origins, and then I just look around a little bit, and it’s not so much of a mystery.

The thing which strikes me is the ridiculous excess which characterizes modern American life. It is ubiquitous, but we hardly ever notice it. It has softened us, and prepared us for the great calamity which is now upon us.

Take the bathroom here, for instance. I am staying right now at the Four Seasons in Palm Springs. It does happen to be a particularly over-the-top place, but this story could be told at any number of hotels which are affordable even to the masses.

The bathroom is a deliciously marbled thing, with expensive, shiny new fixtures everywhere. The commode is stationed luxuriously in its own little compartment, itself walled and ceilinged with marble. The door to this space thunks with an authoritarian permanence when closed. The space is hardly larger than the commode itself. My wife, I am sure, would love the floorplan of this particular bathroom, as it would provide a buffer from the more unsavory aspects of her spouse.

Anyway, on the wall, conveniently placed at eye level while sitting, is a phone. A phone.

Now, come on.

Admittedly, I do some of my best thinking while stationed thusly, but seriously. Have we now gotten to the point where everyone is so busy that they cannot even afford to finish their business before trotting off to a real phone to make an important call?

Who in God’s name has ever used one of these phones?

I can imagine the call to my broker going something like this:

Ring. Ring.

“Hello, ________ speaking…” (name changed to spare the innocent)… (that would be you, T)...
“Dude, what’s up?”
“Hey, man, to what do I owe this honor?”
“Well, I’ve been thinking.”
“Uh oh. Whatd’ya got”
“Well, I’ve been thinking…uuuuunhhhhhhhhhah!”
“What??”
“What..”
“You grunted!”
“What??”
“I heard you grunt or something.”
“I don’t know what you’re talking about.”
“I distinctly heard a loud grunt. What the hell are you doing there?”
“Oh that. Oh, well, that was the cat.”
“The cat?”
“Yeah.”
“I thought you were at a hotel? Ritz, or something?”
“Oh yeah. Four Seasons.”
“What?”
“Yeah, well, that was the neighbor’s cat.”
“The neighbor’s cat? What are you talking about?”
“Hey, nevermind, long story. You’re changing the subject. I’ve been thinking here.”
“OK, about what?”
“Well, I’m thinking that this market is about to tank on us major-domo, and I should be selling everything and parking it in cash.. uuuuunhhhhhhhhhah!”
“There you go again!”
“What do you mean, I just figured this out myself!”
“No, the grunting!”
“What?”
“You just grunted again!”
“What are you talking about? I am talking about selling everything!”
“Dude, are you crapping?”
“Well, man, I know you got some strange shit going on upstairs – I thought that analyst guy was working out? – but I don’t want you making shit up on my time!”
“I am not the one grunting!”
“You’re hearing shit.”
“MARTHA! Can you pick up that phone!”
“Hey, stay with me here.”
“OK, what about this cash? I told you man, your cash is safe. It’s in money markets…”
“No, you’re not getting it…”
“Hey, man, I gotta go.”
“What?”
“I gotta go, man, got a big client on the other line…”
“Wait!”
Click.
"Crap!"

Tuesday, October 21, 2008

All Suits Today

I've had this theory, ever since about 2002, that there is an inverse correlation between the formality of business attire and the exuberance of financial markets.

Although I did not recognize it at the time, the first indications of such an inverse relationship showed up in the late 1990's, with the dotcom equity explosion. If you remember, Alan Greenspan characterized that time in our history as one of something like "irrational exuberance." As the 90's progressed, as the NASDAQ index climbed higher and higher, and as the Masters of the Universe became tech gurus instead of Wall Streed gurus, business attire in general began to mimic the dress of the twentysomething internet billionaires who seemed to be popping up regularly: wrinkled khakis, logoed polo shirts and Docksiders.

As these billionaires became more ubiquitous, and as Wall Street bankers took note of their dazzling newfound wealth, this attire even seemed to trickle right down onto Wall Street itself; New York adopted business casual, first on Fridays, but when the dotcom explosion seemed almost complete, it became the norm all week long, in summer, winter, whatever.

Well, then the dotcom bubble burst. Some people immediately reverted to wearing suits. That's when I noticed the relationship. However, the reversion was not complete; some institutions kept with the more casual wear. Others didn't know what to do (like MidMark) and effectively had no dress code at all. Younger analyst types would sport casual wear, while older management started wearing ties again. The trend toward more formal continued up until about 2005.

Then, the Masters of the Universe became hedge fund managers. Well, since they were beholden to noone, they got to work in casual dress again. The cycle started over again, although it was not quite so complete. Portions of Wall Street, particularly investment bankers, still wore suits. But it was not uncommon in 2006 or early 2007 to have meetings, during which there might be discussions about the movement of billions of dollars, attended by people wearing jeans with rips in the knees.

Well, now the real estate bubble has bust, and the financial wreckage is like nothing anyone has ever experienced before.

I went to a meeting at the Association for Corporate Growth this morning. It was attended by about 100 bankers, lawyers, accountants, private equity folks, and probably some hedge funds too.

All suits. 100%. All of them, dark. Polished wingtips. Not a polo shirt to be seen...

Monday, October 20, 2008

Congratulations Andrew!

Congratulations are due to Andrew Friedman and the Tampa Bay Rays, who last night beat Boston in game 7 of the American League Championship Series, and will start the World Series on Wednesday night.

Some of you may remember that Andrew was an Associate here at MidMark for several years until joining the Rays. After two years in player development, he became general manager(article about his background here).

Andrew is now the toast of the Major Leagues, and everyone wants to know a little bit about him, inlcuding his background. So, naturally, MidMark has been getting a little press, which is a strange thing.

According to the New York Times, we are "an obscure private equity firm in New Jersey." In another paper we were described as a firm which ruthlessly extracts profits by buying and breaking up companies.

Well, I suppose I am happy to remain obscure, as long as we're making profits!

Congratulations to Andrew. I'm definitely a fan, even though my heart still belongs to Baltimore.

Wednesday, October 15, 2008

Thoughtless Bastards...

Blog Post Caution: Potty Humor

I just had another disappointing trip to the men's room. I really hate it when none of the prior inhabitants of my stall has been courteous enough to leave any reading materials strewn about the floor for me to pick up. It's really thoughtless of them.

Since I obviously cannot count on any of my work colleagues for something so simple, I am thinking that I'll have to buckle and get my own subscription to Sports Illustrated or Men's Journal. I wonder if publishers will deliver to men's rooms? The addressee would be something like this: Stall 2, Men's Room, 2nd Floor, 177 Madison Avenue, Morristown, NJ 07931.

Thursday, October 9, 2008

CNBC Update

Mouthbreather Index: 25%

If you don't know what I'm talking about, see here.

I was back at the Yale Club today. It was late afternoon, at the tail end of another 700 point rout of the Dow.

I counted again, this time eight folks stood about watching events unfold on CNBC. Only two had their mouths hanging open this time. One, an older gentleman, fully reclined on one of the couches, looked like he might have his mouth open pretty much all the time, but I counted him anyway. The other was a younger gent, a bit overweight, whose lips were actually closed, but it was quite easy to tell that the jaw had slacked up considerably behind his sloppy maw. He definitely merited a count. I almost snapped a picture of him on my cell phone to share with you.

At 25%, I'd say that people have pretty much gotten used to the news...

Wednesday, October 8, 2008

A Deadbeat Employee

The latest email exchange between me and our controller:

-----------------------------------------------------

From: Werner, Judy Sent: Wednesday, October 08, 2008 2:19 PMTo: Finlay, MattSubject: Lunch Tab

Matt –

Your lunch tab now stands at $214.12. Please reimburse petty cash ASAP.

Thanks!

Judy

Judith Werner
MidMark Capital
177 Madison Ave.
Morristown, NJ 07960
Phone: 973-971-9960
Fax: 973-971-9963
jwerner@midmarkcapital.com

P Please consider the environment before printing this e-mail. Thank you.

-------------------------------------------------------------

Judy,

Come on, cut me some slack!

I'm right in the middle of trying to package up my lunch tab in a collateralized debt obligation so I can sell it to an unsuspecting pension fund in Iceland. I'd move faster, but the rating agencies aren’t cooperating.

M

PS: I’ll run over to the bank machine right now…

Matthew Finlay
Managing Director
MidMark Capital
(973) 971-9960
http://www.midmarkcapital.com/

------------------------------------------------------------

Saturday, October 4, 2008

Creaking Old Man, Drinking

Lost the Club Championship tennis match today to a college boy, 6-0, 6-1. He was gracious in his drubbing of me; I was not quite as gracious in receipt of the drubbing. I'm now sitting in my favorite reclining leather chair drinking a beer -- my knees hurt, my elbows hurt and my muscles are sore. I still feel better, though, for having tried to beat the little bastard.