Last National Bank of Boot Hill
(strictly commercial money lent and borrowed full telephone banking service your choice of affinity Boothillcards apply now)
Moorgate, London EC2
Sad, sad, the Overseas Bankers Club shuts, they drop the Overseas, a fatal error, I like its kinda churchy clubhouse by the back gate of the Bank of England so their guys can slip out for a drink without anyone seeing them, I get my best scuttlebutt here, and now your boy has a place in its history as the very last chairman of the sub-committee on martinis.
This is the moment of truth, for your boy and for the Last National and for Hillboot Intergalactic, our investment bank, and Holey Buckett, its head honcho, at last his corporate finance division gets something to do, finding a taker for itself, no reasonable offer refused.
The notion dawns on me when Holey rolls round to Moorgate to present his next year’s budget, at first sight I figure it is an old one from the OMB that gives Newt Gingrich indigestion, the numbers are out of this world and even bigger than this year’s tho’ not exactly better.
Holey, I say, how long ago is it since you tell me we must spend a fortune on hiring new guys and another fortune on firing the old ones, and a third fortune on a marble mausoleum deep in Docklands, and hardware and software to fill it, and now you come asking for more?
He tells me this is a poker school and we have to keep sweetening the pot, it is no use throwing in a few red chips and hoping, we need to build a base for our next great leap forward to New York, where I hear Sallies is for sale, the optimists there are learning Dutch, the pessimists learning German, so I set my team to working up an offer.
When I ask him if he thinks the Last National is made of money he simply says: Yes, of course, what is the point of being a bank otherwise, they have it coming out of their ears, so now they rush around and buy each other, I want to get more of this business for Intergalactic, or some of it, just for a start.
Mom, at this the guy finally blows it, ever since Morgan Stanley diversifies into credit cards the writing is there on the wall if he can only read it, the way to make money in banking these days is to lend it out to suckers at commercial margins, and investment banking is a no-no, even investment bankers notice this, which is why they mark the stocks down.
So I tell Holey to go away and rework his projections, starting with his bonus list and starting at the top, which is what he pencils in for himself, it is time we trained commercial bankers get revenged on guys like him, I am just casting my mind over how we can relaunch Boothillcard, with a picture of Princess Di and a one basis point cut for charity.
Then up on the screen comes the word about Sallies, it turns out the guys should be learning Weillese, they are knocked down to Travelers for a little matter of $9 billion, and the biggest check goes straight to Warren Buffett.
With this come the usual PR smokescreen about synergy, Sallies prints the stock and Smith Barney sock it to the customers and this combination can get by with fewer traders, me, I figure this is all hooey, for $9 billion only one thing matters, is Sandy Weill right to buy or is Warren Buffett right to sell?
Put like that it is a no-brainer, and if Holey thinks he is going to join the auction at $10 billion he soon finds this takes him over the limit on his new compassionate Boothillcard, in fact if I can get anything like a pro rata price for Intergalactic I am apt to grab the bidder’s hand off. I get one of those lightbulb moments, my head positively glows.
The very next week our announcement shakes the whole financial district, Last National puts Intergalactic thru the shredder, corporate finance and equity divisions surplus to requirements, remaining rump to be renamed Boothill Cosmic Capital Group, half a building in Canary Wharf available for rent, would suit expanding regulator, and all the guys who Holey asks to the housewarming party can consider themselves disinvited.
I do say he takes it on the chin, ok, Herbie, he says, these things happen and we must make the best of them, you know my family, can you honestly imagine that I wish to spend more time with them?
In fact our legal eagle says Holey could have us for constructive dismissal if he wants, so perhaps we throw him in, my strategy is to have someone offer billions to take these guys off my hands. It’s money in the bank and saves mega-payoffs.
So all I need is the right guys to handle the sale, Holey says his team may have conflicts of interest, and I can’t exactly ask Sallies, so I call on Martin round at Barclays and try out my idea, the guy’s kinda intellectual so I figure it appeals, but when I talk of giving BZW the business, he says he has to ask Peter and Bill.
Mom, he does not ask them, he tells them, as between Sandy and Warren he is in the Warren camp, and in the civil war between commercial bankers and investment bankers he lets the commercial guys have their revenge, he lifts my idea wholesale and puts BZW thru the same shredder as Intergalactic, and calls in Goldman Sachs to advise.
He sure makes it difficult for me, I mean, how many corporate finance divisions do there have to be on offer before we glut the market, and what languages must Holey’s team start learning, maybe such unfamiliar expressions as return on capital, the bank with the highest is Lloyds, which puts its investment bank thru the shredder years ago, much love from
Your commercial son
Herbie tries his ideas out on Christopher Fildes
