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Posts Tagged ‘King of Wall Street’

Larry Fink: The King and His Kingdom

Posted by Larry Doyle on March 5th, 2010 11:10 AM |

Who runs Wall Street?

Last June, I designated “Larry Fink: The King of Wall Street” and wrote:

With the downfall of Wall Street over the last two years, we have seen some giants within the industry summarily dismissed and, in certain cases, demonized. Who knows what the future holds for Dick Fuld, Jimmy Cayne, John Thain, and Angelo Mozilo.

With their demise, who now reigns over the Wall Street kingdom?  Many would debate that either Lloyd Blankfein of Goldman Sachs or Jamie Dimon of JP Morgan Chase is the “king of the court.” Well, Lloyd and Jamie certainly wield significant power and influence on Wall Street, but there is no doubt that the King of Wall Street is the CEO of BlackRock, Larry Fink.

Larry Fink was my first boss on Wall Street when I joined First Boston in August 1983. (more…)

Goldman Sachs ‘Shooting Fish in a Barrel’

Posted by Larry Doyle on November 5th, 2009 9:37 AM |

Those who take risk do not always win. A variety of mathematical models dealing with risk address and negate the chance of almost uniform success by one party. While those on Wall Street would promote the overwhelming risks in the industry, I would maintain that Wall Street circa 2009 is not in the risk business. How so? Let’s review results from the firm regarded as the best at managing risk, that is Goldman Sachs.

The Financial Times provides insights into the Goldman Sachs ‘casino’ in writing this morning, Goldman Benefits From Trading Bonanza:

Traders at Goldman Sachs recorded only one daily loss in the third quarter, highlighting the trading bonanza sweeping Wall Street as central banks continue to pump billions of dollars into the financial system.

The performance – revealed on Wednesday in a regulatory filing – compares with two losing trading days in the previous quarter and confirms that the authorities’ drive to revive markets after the crisis is yielding huge windfalls for some banks.

Before the crisis, banks regularly recorded trading losses on several days in a quarter.

Goldman made more than $100m in profits on 36 of the 65 days in the three months to September and recorded more than $50m in profit on more than eight out of 10 trading days, the filing shows.

To lose money on a total of only three days over the last two quarters defies rules of logic, assuming that markets are free, fair, and balanced. Even in Vegas the house doesn’t win at that rate. The question begs then as to the nature of the supposed risks being taken by Goldman and every other Wall Street firm. Beyond the risks, we also need to question the very nature of the markets themselves. When a firm makes money 98% to 99% of the time, don’t tell me they’re taking risk. They are doing nothing more than ‘shooting fish in a barrel.’ How so? (more…)

The King of Wall Street Takes on the Casinos

Posted by Larry Doyle on July 22nd, 2009 7:08 AM |

Kings like control. Control drives revenue and profits.

Revenues and profits are a function of volumes and margins.

Any businessman worth his salt works tirelessly at increasing his own volume and margin while necessarily narrowing those of his competition.

Larry Fink

I see a classic case of these competitive forces at work this morning in a report from the Financial Times, BlackRock Chief Attacks Wall Street Earnings:

Larry Fink, BlackRock’s founder and chief executive, on Tuesday took aim at the “luxurious” trading profits enjoyed by Wall Street banks, saying that they have taken advantage of reduced competition to charge their customers more for even basic trades.

“There are fewer players. There is very little capital being committed by these dealers,” Mr Fink said

Little doubt The King of Wall Street, Larry Fink is irked by the ransom being charged by those running the Wall street ‘casinos.’  The king says as much in stating:

“They’re just taking the spread between the bid and the ask [the price gap between buyers and sellers] and they are making very luxurious returns,” he added.

In layman’s terms, the King is denigrating those working the Wall Street ‘casinos’ as the equivalent of toll takers on the Triborough Bridge. Who likes paying increased tolls? Nobody, and especially not a king.

What is a king to do to reinstitute some order in his kingdom?   (more…)

The King of Wall Street: Larry Fink

Posted by Larry Doyle on June 17th, 2009 11:17 AM |

BlackRock CEO, Larry Fink

BlackRock CEO, Larry Fink

With the downfall of Wall Street over the last two years, we have seen some giants within the industry summarily dismissed and, in certain cases, demonized. Who knows what the future holds for Dick Fuld, Jimmy Cayne, John Thain, and Angelo Mozilo.

With their demise, who now reigns over the Wall Street kingdom?  Many would debate that either Lloyd Blankfein of Goldman Sachs or Jamie Dimon of JP Morgan Chase is the “king of the court.” Well, Lloyd and Jamie certainly wield significant power and influence on Wall Street, but there is no doubt that the King of Wall Street is the CEO of BlackRock, Larry Fink.

Who is Larry Fink? What is BlackRock? How did he ascend to the throne?

I consider myself fortunate to have worked for Larry for the first 5 years of my career at First Boston. I learned the business under his watch. He was more than fair with me and I owe him a debt of gratitude for giving me an opportunity.

Larry came to Wall Street in the late ’70s and is largely credited, along with Lew Ranieri of Salomon Bros., for developing the mortgage-backed securities sector. First Boston and Salomon dominated the MBS sector of the market in the ’80s with a combined 70%-75% market share.  I certainly did not fully appreciate it at the time, but my 7 years at First Boston were a fabulous education.

During my last two years at First Boston, I did not work for Larry. He moved on to join Blackstone, a new private equity venture. BlackRock was a part of Blackstone and subsequently spun off.

BlackRock was initially a shop that primarily marketed mutual funds. Over the last 21 years, BlackRock has experienced tremendous growth, both organically and via acquisitions. Just the other day, BlackRock purchased Barclays Global Investors for $13 billion.  With BGI in the fold, BlackRock will have approximately $2.8 trillion in assets under management.

BlackRock typically gets the first call from Washington when workout situations arise. They were engaged to assess and manage the risks upon the demise of Bear Stearns and AIG.

BlackRock is recognized as the preeminent risk manager on Wall Street. In fact, one of BlackRock’s most profitable units is a risk management division known as BlackRock Solutions. How uncanny that BlackRock has flourished based upon its risk management capabilities. Why? Under Larry’s watch at First Boston in the mid to late ’80s, risk management within our MBS business was almost non-existent.

I would never air dirty laundry nor talk out of school, but Larry himself has referenced this time period as being a tremendous education for him along with a sore spot. Let me expound. (more…)






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