Mike Mayo pulls out an old analyst move
You know, it may be ok for Mike to do what he did today because he is becoming "old" by analyst standards. Now at the heretofore unheard of Calyon Securities, the well known Mayo downgraded U.S. banks to underweight and said that bank loan losses will exceed those in the Great Depression. There are two hallmarks here of a classic attention getting analyst maneuver. First, after a run up over several weeks the banks were already a shooting duck for a fall, or retrenchment, giving Mayo a solid chance of getting a meaningful vindication of his call in the market today. Second, words like exceeding losses in the Great Depression are a perfect hook for the journalists and sure to be on the lips of every suit on business news channels, even mainstream network news with appropriate serious intonation. Given that the U.S. economy in the 1930's was a fraction of what it is today it is likely that bank loan losses are already higher in absolute terms than they were at that time, and there hasn't been any discussion of performance as percent of total loans.
Mike has likely been seething for a year and a half after he made a distinctly negative call on Citibank in the fall of 2007 that was followed two weeks later by Meredith Whitney's repeat of his downgrade but one in which she led with the thesis that Citi would not be able to maintain the dividend. She got all of the attention as the hedge fund folks that some have said laid the groundwork for her work pointed the journalists in her direction. Her previously undistinguished career was lifted to the heights as her spunk and the praise from the constituency that adopted her made attractive copy, attractive television. Mike got beat at his own game, and has been low key ever since.
Now Mike's back, unleashed at a small firm. While his attention getting efforts have almost always been on the negative side as he seems to enjoy taunting managements and companies, he likes the fight, he does and can come back. He will eventually turn positive on a few, then more, but never all. It's a good assumption that he will now join Dick Bove as a regular go to guy for media looking for regular analyst commentary that is not hemmed in by the rules at major firms.
Meanwhile his cute "seven deadly sins of banking" will keep the Maureen Dowd types of the world atwitter for the week.
Mike has likely been seething for a year and a half after he made a distinctly negative call on Citibank in the fall of 2007 that was followed two weeks later by Meredith Whitney's repeat of his downgrade but one in which she led with the thesis that Citi would not be able to maintain the dividend. She got all of the attention as the hedge fund folks that some have said laid the groundwork for her work pointed the journalists in her direction. Her previously undistinguished career was lifted to the heights as her spunk and the praise from the constituency that adopted her made attractive copy, attractive television. Mike got beat at his own game, and has been low key ever since.
Now Mike's back, unleashed at a small firm. While his attention getting efforts have almost always been on the negative side as he seems to enjoy taunting managements and companies, he likes the fight, he does and can come back. He will eventually turn positive on a few, then more, but never all. It's a good assumption that he will now join Dick Bove as a regular go to guy for media looking for regular analyst commentary that is not hemmed in by the rules at major firms.
Meanwhile his cute "seven deadly sins of banking" will keep the Maureen Dowd types of the world atwitter for the week.
posted by John Borden at 7:41 PM
1 Comments:
Calyon Securities is a subsidiary of Credit Agricole, the large commericial relationship bank in France. It is an amalgam of the U.S. securities units of Banque Indosuez, Credit Lyonnais, and Credit Agricole, formed in 2004 after a series of corporate mergers. It is correct to assume that Mike will likely have the run of the place and that Calyon will welcome almost any attention and media coverage that can come their way as a result.
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