Opinion

It is now October 2008 – we are in the middle of the most significant financial crisis since the Great Depression and about a month before the most significant change election in a generation. At this unique moment in time, the world looks quite a bit different than it did when we approached the last […]

Last week, Reuters published a story with the headline Storied banks abandon Wall Street model. How about this headline: Reuters abandons news model in favor of 8 year old stories? Anyone who thinks it’s news that Goldman and Morgan abandoned their traditional business model has been asleep since 2000. Here’s the real story. The traditional […]

Every year, Microsoft bigwigs trek down to Silicon Valley and brief the VC community on their world view and plans for the future. They are kind enough to invite East Coast VCs, not just locals, and so I flew out last week to partake in the annual event alongisde a few hundred of my VC […]

Investment cycles are predicted to last longer, exits will be tougher and firms will tighten their belts with new fund-raises coming further apart than before. Competition for a place at the table in firms will be greater, so expect compensation to begin cycling downward in this year and throughout 2009. We could very well see firms saying, in effect, this year’s bonus is that you get to keep your job.

Politicians want growth so they allow rates to stay low. (Give the people what they want to get elected) Dad used to pay 10% for his $50,000 mortgage but times have changed and people want things they can’t afford – NOW! They want bigger, nicer houses and they don’t want to pay an arm and a leg. Thanks to low rates times are good – really good. In fact, times haven’t been bad for so long, most young people don’t remember any hardship. Get the biggest house with the cheapest and most flexible mortgage you can get and forget about it. Low interest rates create demand for home-loans. (Money is cheap) Your sophisticated older brother just got his MBA and is now a Wall Street banker. He hatches a pretty nifty scheme. He loans you $5,000 at 2% interest to build a new tree house.

I don’t need to repeat the facts behind last week’s financial turbulence – from Lehman Brothers to Merrill Lynch to AIG and beyond. To paraphrase Jon Stewart, it’s a good thing the audience can’t see me cry during the commercial breaks. Beyond the obvious coverage in the Wall Street Journal, Business Week, The Economist and […]

The following is loosely based on a very good article in today's NYTimes WASHINGTON — After a series of government interventions in the private markets, one seemingly more astonishing than the next, lawmakers found themselves confronted on Wednesday with the question of when and where to draw the line on future aid. But with billions of dollars in financial backing already authorized for Wall Street, and with Election Day fast approaching, Congressional leaders seemed uninterested in denying help to large employers of Americans. Even as lawmakers in both parties unleashed a barrage of questions about the wisdom of a government rescue for the American International Group, support seemed to be growing quickly on Capitol Hill for $532 trillion in venture capital to assist the ailing start-up industry. The chief executives of 172,972 start-ups who have been unable to get VC funding this year met on Wednesday afternoon with House Speaker Nancy Pelosi. When they emerged, they expressed optimism that the investments would be included as part of a budget resolution that is needed to finance

To be successful, drama and fiction rely on what is called a “willing suspension of disbelief.” Perhaps today we need a pause or a willing suspension in an accounting standard that is wreaking havoc. Mark-to market accounting was designed to give a “true” picture of value and thus increased transparency to anyone and everyone who cares. […]

I’m writing this as Lehman Brothers closes its doors and Bank of America rescues Merrill Lynch. Clearly, the news isn’t good on Wall Street. And it’s also far from good on Main Street. The economy has lost jobs for eight months in a row, and the nation’s unemployment rate is now over 6 percent, the […]