Friday, July 25, 2008

Who Should Watch the Investment Banks?

The head of the Securities and Exchange Commission urged lawmakers Thursday to give his agency the power to oversee investment banks -- even as a top Federal Reserve official said the Fed needed similar powers.
Both the S.E.C. chairman, Christopher Cox, and the New York Federal Reserve Bank president, Timothy F. Geithner, told a congressional committee that the decades-old patchwork of regulatory agencies deserved part of the blame for the recent financial market turmoil, which helped bring down Bear Stearns and has hammered the shares of other banks and brokerages.
But there seemed to be a subtle competition in the air on Thursday over which government body should get expanded powers to supervise investment banks, if lawmakers decide that greater regulation is the way to go.
Go to Article from Reuters via The New York Times»
Go to Item from DealBook»
Go to Article from Bloomberg News»
Go to CNBC Video of Timothy Geithner's Testimony

Tuesday, July 08, 2008

Second Half Brings More Of The Same

MergerMogul, July 8, 2008:
In the first quarter, many M&A professionals were hopeful that things would improve in the second or third quarter. Then the second quarter came, and some forecasted recovery was going to happen in the third or fourth quarters. But now that the third quarter is officially upon us, most people I talk to expect the second half will bring more of the same.
For large deals that heavily rely on debt, that means a scant number of transactions. Banks just don’t have the appetite for risk right now. And while the middle market is definitely faring better, the dropoff from a year ago is substantial. The latest statistics I saw showed just 226 private equity deals in 2008 through June 13, 2008, compared with 669 during the same time period the year before.
The good news is, even if things remain the same for the second half, market conditions are far from dire. For example, cross border M&A activity is only slightly lower for the first half of 2008 than it was in 2007. And certain industries, such as financial, healthcare and energy remain hot spots for investment. (However, when I say hot spots, that’s relative—those sectors are holding their own, but probably still won't reach 2007 transaction levels.
In the short term, things really can’t get much better as we enter the dog days of summer. But perhaps where the middle market is today is the new reality, something that everyone just needs to get used to. No sense of waiting around for the hay days to return. Whatever the extent of the next recovery, in the meantime it’s best to focus on getting quality deals done at decent multiples, a task that is clearly easier said than done. Let me know what you think about the second half.Danielle Fugazy