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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (74229)	11/16/2006 6:04:45 PM
From: Crimson Ghost	Respond to of 110194

That puts you in a minority of one IMHO

To: mishedlo who wrote (74229)	11/17/2006 2:29:07 AM
From: Perspective	Respond to of 110194

Just what you want to hear from a banker:"We, as an industry, are doing things that we shouldn't be doing," he said. Bankers push limits in hot debt markets today.reuters.com By Richard Hubbard LONDON (Reuters) - A surfeit of liquidity in the financial markets is tempting bankers to underwrite and finance deals that may come back to haunt them, a top banker at Goldman Sachs said on Thursday. Eugene Leouzon, the chief underwriting officer for Europe and Asia at Goldman Sachs <GS.N> who sits on the investment bank's global credit committee, said the current conditions were unparalleled in his experience of investment banking. "The markets are really, really red hot," said Leouzon, who approves new loans and debt deals to fund mergers and acquisitions (M&A). "The things we are seeing being done, both on the investment grade side and the non-investment grade side, are I would say borderline stupid," he told the Reuters Investment Banking Summit in London. "There is just too much capital going after too little by way of deals," said Leouzon, who also manages the firm's underwriting and lending portfolio in Europe and Asia. But Leouzon said the outlook was for a strong level of new deals going forward, led by lending money to fund leveraged buyouts and cash mergers and acquisitions. RECORD YEAR SEEN Several bankers have told the Reuters Summit the volume of deals this year will surpass the last boom year of 2000, when around $2.5 trillion dollars of deals were done. Research firm Dealogic estimates Europe has seen $1.39 trillion of M&A deals so far this year, more than the $1.17 trillion in the United States. "It looks a lot like 2006 is going to meet or exceed a lot of the 2000 benchmarks. We've already done over 500 $1 billion-plus deals, which is about what they did in the year 2000," said Tom King, head of European investment banking for Citigroup. "You're coming off the best year ever, and everybody has blown through their budgets this year, and they are now looking to next year," said Leouzon, who joined Goldman Sachs in 1999 in the Leveraged Finance Capital Markets unit. Competition among bankers chasing big bonuses is also likely to keep the pressure on doing deals. "The guys who are arranging and underwriting deals, be it investment grade or non-investment grade bonds, equity or bank debt, they are all going to be competing hard against each other," he said. Even with interest rates going up, Leouzon said he only expected to see a soft landing in the world's major economies, and believed the underlying conditions in the financial markets were not going to change too much. "Unless there is a wave of defaults, big ones, and people start losing money and then start reining back can we sort of bring things down," he said. But the man who sits on the capital committee of one of the world's leading investment banks and looks closely at many of the deals being done is nervous. "We, as an industry, are doing things that we shouldn't be doing," he said. © Reuters 2006. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world. Close This Window

To: mishedlo who wrote (74229)	11/17/2006 10:16:32 AM
From: forceOfHabit	Read Replies (1) \| Respond to of 110194

Crimson Ghost says: Almost everybody credits the big drop in oil prices as being a key factor behind the strong stock rally this fall. Do you disagree? mish replies: Yes - I disagree Stocks rallied because sentiment got too freaking bearish is more than likely the correct answer. I sez: And what do you suppose drove bearish sentiment? Maybe record high gasoline prices? Maybe Goldman claiming oil was headed to $100 barrel? Just curious. foh