Blog - Mahony Partners

Feb

2012

The water keeps rising around James Murdoch

Crisis, Media

Attorneys for News Corporation investigating the phone-hacking scandal at the now-defunct UK tabloid News of the World revealed today that emails warning of widespread hacking were deleted from James Murdoch's computer. The New York Times reports: "Rupert Murdoch’s son Read More

Jan

2012

How’s that again, Mr. Rubenstein?

Financial Services

David Rubenstein wants to have it both ways. He’d like us to believe that he’s a reasonable fellow, ready to pay more tax if Congress would only change the law, according to a New York Times report:. “If you change the law, we’ll pay the taxes,” Mr. Rubenstein said to scattered applause during a debate at Davos on the future of capitalism. He was referring to a provision of the United States tax code that allowed people in the private equity industry to treat their income as capital gains and pay a lower rate. He conveniently forgets to mention his consistent opp... Read More

Jan

2012

Just do it, Mitt

Taking & Managing Risk

Here’s some free advice for Mitt Romney: Release your income tax returns now. Right now. Don’t wait “until April” as you’ve said in the past, or give a vague estimate of your effective tax rate, as you did earlier today. Do it now so you can address facts, instead of conjecture and speculation. According to a New York Times report, you rather awkwardly said your tax rate is “probably closer to the 15 percent rate than anything. Because my last 10 years, I’ve — my income comes overwhelmingly from investments made in the past, rather than ordinary income... Read More

Jan

2012

The problem with private equity

Financial Services, Taking & Managing Risk

Andrew Ross Sorkin’s DealBook column profiles Paul Levy, a PE manager who makes a good defense of private equity: “We want to build businesses,” Mr. Levy said earnestly. “Nobody wants to fire people. We want to retain all of the value-added, high-quality people that work at these companies. But it’s like any other endeavor. If there are more people there to make the shoes than needed, you can’t keep the people. It’s not about wanting to get rid of people. It’s about wanting to make the company operate on a size and scale that’s commensurate with its opp... Read More

Jan

2012

Does culture matter?

Crisis, Financial Services, Taking & Managing Risk

There’s long been a debate about whether a company’s culture makes any difference in how it performs. Culture often is derided as the “soft stuff” that is nice to have but not really essential to a company’s success. Indeed, Sandy Weill once famously quipped that culture was “something they put in yogurt.” (Of course, we know how things turned out at Citigroup.) Research by Professor Jim Heskett of the Harvard Business School has demonstrated the value of a strong corporate culture. He estimates that companies with effective cultures outperform their peers by as much as 30%. But there’s now evide... Read More

Jan

2012

How bad is it at Bank of America?

Crisis, Financial Services

You know your company is in trouble when the chief marketing officer gets more press than the CEO. And it’s in really, really deep trouble when the CMO is seen distancing herself from the company’s strategic blunders. That’s what we saw over the weekend in the New York Times piece on Anne Finucane, “chief image officer” for Bank of America. According to the Times, Finucane “warned against” Bank of America’s acquisition of Countrywide, whose bad loans and legal troubles remain a continuing source of pain fo... Read More

Jan

2012

Friday Risk Reading: Shackleton

Crisis, Friday Risk Reading, Taking & Managing Risk

I was catching up on holiday reading and came across this excellent New York Times piece on Ernest Shackleton written by Harvard Business School professor Nancy Koehn. Shackleton's ambitious journey to reach the South Pole ended in failure but became a triumph of leadership, courage and determination as he brought his entire crew safely home after a nearly two-year ordeal in the most difficult conditions on the planet. (It's an astonishing story, and for a complete account of the saga, Read More

Jan

2012

Communicating European debt risk

Financial Services, Taking & Managing Risk

As reported today, the US Securities and Exchange Commission has introduced guidance for financial firms related to reporting of their European debt exposure. The SEC issued its recommendations to address the inconsistent approach firms have used to disclose their risk to sovereign and private borrowers: "In response to our comments on their disclosure documents, registrants have provided incremental improvements in disclosures of exposures to so... Read More

Jan

2012

More on Refco and MF Glboal

Crisis, Financial Services

Years after its collapse, Refco continues to make news. Yesterday, an appeals court overturned the conviction of an attorney, Joseph P. Collins, who had been the chief outside counsel for the futures brokerage and was found guilty of aiding the company's scheme to hide millions in debt and mask its true financial condition. When the fraud was discovered, Refco filed for bankruptcy, and its assets later were sold to Man group, which later spun them off as MF Global. Collins was convicted largely on the basis of testimony from a former Refco executive who cooperated with fe... Read More

Jan

2012

The 2011 Risk List: The year’s 5 best risk-takers

Crisis, Financial Services, Friday Risk Reading, Taking & Managing Risk

As 2011 disappears in the rear-view mirror, here’s my list of noteworthy risk-takers over the past year. These are the people and institutions that took risks intelligently and won. The list of risk-bumblers - those who mishandled critical situations - is certainly longer (UBS, Olympus, Yahoo, MF Global, I could go on) but their woes already have been well cataloged, and who wants to start the New Year revisiting disasters? So here are the top risk-takers: 1. Jefferies. Before this year, mid-size investment bank Jefferies happily stayed below the radar, built its business and made a tidy profit. All that changed when MF Global collapsed and investo... Read More