Economic Recovery

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Have you heard the following thought expressed recently in one way or the another, “I’m less worried about what new black swans might swim onto our screens and more worried that we will just wake up one day, peer out of our bunker of habituated indifferences to the drumbeat of troubling news and decide, suddenly, that things actually are terrible!”  Bad news seems to pile upon bad news in the larger world.  We are off the map of the known universe in terms of monetary and fiscal norms, and yet when the last worse headline comes across the ticker, and the newsreaders do their level best to create drama, the debt and equity markets seem to, well, yawn.  What happens if one day we wake up and all of a sudden all that which was benign yesterday is terrible today?  It’s like one of those sci-fi movies where the doughy earthlings encounter a race of beautiful, peaceful people and then, in a blink, see them as the multi-arm, walking crustaceans with eyes on stalks and a distinct preference for space hero tapas that they really are. 
Continue Reading The Grand Illusion: A Strategy

I’m getting pretty annoyed at the calumny heaped upon “complexity.”  Everyone wants to “hit the ball down the middle of the fairway”; “keep it simple, stupid”;  “Stick to the knitting…”; “Plain vanilla only, please.”  Don’t do anything not in the precedent.  Oh, please.  Okay, I’ll admit I’m talking my book here, but this is an inapposite choice of chief villain for the little morality play called “What Went Wrong.” 

There were plenty of dumb things done in the capital markets before the Late Unpleasantness.  There were indeed some deals and structures that could not be easily understood.  There were some bad choices made about, shall we call them, “opportunities” presented by the application of super complex rating criteria.  Then, of course, complex machinery was sometimes left in the hands of those ill equipped to manage it. 
Continue Reading Complexity Is Not The Enemy

Dow at 16,000, government up and running and the first Single-Family Rental deal now safely in investors’ hands – we are in pretty good shape. As is our tradition here at Crunchedcredit.com, we present to you our nod to the stories and happenings that struck us as amusing or important. (Or both). (Or neither).Continue Reading CrunchedCredit.com’s 4th Annual Golden Turkey Awards

Writing at the beginning of the week in which the government is supposed to run out of money, it’s worth noting the cognitive dissidence between the political chattering classes who clogged the airways this weekend with threats of doom and other apocalyptic noise and what’s actually happening on my desk. If I wasn’t already numbed by the Giants being 0 and 6, it would have been really distressing. Listening to the doomsayers of the 24 hour news cycle on one hand, and returning to my desk on Monday morning and seeing the business of business humming along nicely with little energy around the ongoing government shutdown and potential debt ceiling break this week was really rather odd.

Continue Reading Budgets and Debt: The Cheshire Cat Apocalypse

The Loews Hotel buzzed with optimism on the first day of the CREFC January conference, as over 1,300 attendees descended on South Beach.  After catching up with many friends, the Monday morning session began with lively meetings of the Agency Investors Forum, the High Yield and Investment Forum, the Issuers Forum and the Portfolio Lenders Forum.  Panelists at the forums expressed a general sense of optimism for 2013 and expect the general market trends of 2012 to continue into 2013.Continue Reading Day 1: CREFC Sizzles on South Beach

So after another bad news week in Europe, I’m a bit gloomy about the future of the capital markets. As we try to run a business and help our clients, I’ve got this narrative running through my head about Europe. I keep running this movie back and forth in my head hoping it will help me tease out what will be in the last reel. Look, we try to make these blogs contain some bon mots of immediate utility. I’m not sure what follows has any immediate utility, but I hope someone will tell me what I’m missing here.Continue Reading ROME’S BURNING: WHAT AM I MISSING?

The image of the cresting wave looming behind the dais in the Loews’ Americana Salon during Douglas Holtz-Eakin’s keynote address posed a central, if unintended, question that was addressed by more than one speaker during the three-day conference.  Are we riding a wave to recovery or facing a deluge of maturing debt?  For most of the 1,200 industry participants that occupied Miami’s South Beach for CREFC’s annual January conference last week, there seems to be no certain answer (other than almost unanimous agreement that South Beach is a better Winter destination than our Nation’s Capitol).Continue Reading CREFC January Conference Recap: Riding the Wave

My team and I have spent the better part of the past eight weeks dealing with Irish loans and other portfolios of…stuff. While the conduit market was imploding, pipelines were being aggressively repriced and loan production was shifting into a very low gear, there has been a full scale feeding frenzy for portfolios of seasoned loans. While new loan originations were being dragged through the knot hole of torturous and ultimately paralytic analysis, millions of dollars were spent in high speed car chases for billions of dollars of seasoned loans in awkward, brief and brutal auctions.

Cognitive dissonance anyone? These are alternate universes. In the Ordinary Course Loan Origination Universe, every proposal suffers the death of a thousand cuts: “OK, maybe it’s a pretty good loan but I need to really understand what happens if the anchor tenant leaves, the president of the management company gets arrested and an asteroid hits Ohio. What exactly happens in the cash flow?”  In the Alternate "Bid ‘Em Up Universe", crappy reps, document defects and weird deal features? Fine! Win the bid!
 Continue Reading And the Momentum is Going Which Way?

ASF 2011 kicked off yesterday, February 6, at the Orlando World Center Marriott.  Dechert attorneys Malcolm Dorris, Ralph Mazzeo, Patrick Dolan, John Timperio, Cindy Williams, Andrew Pontano, Lorien Golaski and I are hosting a cocktail party for clients and friends here this evening.

Congressman Scott Garrett (R-NJ), Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises (GSEs), delivered the featured address this morning, February 7. In his new role as Chairman, Congressman Garrett will be a key player in the debate over the future of the GSEs, the implementation of the Dodd-Frank Act and the continued development of a legislative framework for a covered bonds market in the U.S.Continue Reading ASF 2011 Kicks Off in Orlando, Florida