This is probably another one of my dumb questions: How do deals go ahead so quickly i.e. deals among banks and the government etc. for example, when Lehman was about to go down, things happened very quickly and there was some news every 15 minutes. What actually happens? Does some CEO of some company pick up the phone and call his counterpart at another company and request to be bought? Does the Treasury department officials just pick up the phone and call some CEO to talk about acquiring another bank?
Former Merrill CEO Stan O’Neil made a call to former Wachovia CEO Ken Lewis in October or so last year to ask about a possible merger . . . (Stan got slammed for that call) It seems like when things need to happen for certain entities, the decision-makers get on the phone with each other, which is usually the CEOs and make things happen quickly so that by the time they make their decision the environment doesn’t worsen. I’m sure these companies have been in talks with the gov’t before the 15min news updates, so when the actual decison making happens, they probably have had a few talks before . . .
I got a chuckle out of this quote from Mortgage or your life blog: “Congress may have a reputation for molasses like agility, but don’t underestimate their ability to do something really stupid, really fast.”
I find it hard to believe they can do any sort of real DD over a weekend!
BAC barely looked at merrills books…you can do some back of the envelope dd in 2 days and that is what they did. it is either that or sufferr a blow up on monday morning. given the fact that we were seeing a run on bank contagion, thain didnt want more pain
They all know what everybody else has since they’re all counterparties, except, uh, wait they don’t even know what they have themselves. Good thing accountants never lie. If they say the book value is $5…
haha…book value is an inconsequential number for financials right now… but seriously…how can you bet the ranch over the weekend without knowing exactly what you are getting into?!
It’s about taking risks. Patton (I think) said “Good leaders are able to make decisions quickly. If they’re right, so much the better”. Maybe Churchill said it. Or maybe MacArthur did. Maybe I dreamt it.
My old school motto was “Fortuna iuvat fortes”
except of course…its not their own money they are betting!