Mike Mayo is an old-style bank analyst―thorough, independent, honest―who never pulls his punches, whatever icons, public or private, may be wounded.”
―Paul A. Volcker, former chairman of the Federal Reserve
“Exile on Wall Street offers Wall Street’s rarest commodity: the truth about our nation’s largest banks and how they almost toppled capitalism. If you want to know the sickening truth about the largest banks, read Mike Mayo’s exposé.”
―Harry Markopolos, author of No One Would Listen
“Mike Mayo is one of the best financial analysts on Wall Street. He brings clarity to a world full of uncertainty.”
―Maria Bartiromo, leading financial commentator
“Mike has long advocated for the investor. If only directors of business corporations with the legal and moral obligation to their shareholder base would emulate his diligence on their behalf, then good corporate governance would be restored. Every public company director ought read his book!”
―Thomas Garrott, ex-CEO of National Commerce bank and an ex-director of SunTrust
From the Author
MIKE MAYO GREATEST HITS AND MISSES
My book, “Exile on Wall Street”, discusses my battles with the banks over the past two decades and some of my more noteworthy stock recommendations as a Wall Street analyst. For me, my job is about more than recommendations to buy or sell stocks. I believe in changing the status quo on Wall Street. To give you a look into my world, below are some of my stock calls. These are my greatest hits and misses:
HITS:
1994 (year-end): Buy banks-I never wanted to trust bank management too much to look after shareholders, but a new law that allowed banks to expand nationally increased the threat that more banks would get taken over which would force banks to streamline their companies. In 1996 I listed a group of takeover targets-most were taken over within 3 years. lt was a good time to buy bank stocks.
1999: Sell banks-In the biggest call of my career, I put sells on the largest banks and downgraded the group given concerns that banks would soon begin to push revenues too aggressively. We had seen the result of these actions in the 1980s and early 1990s. ln one of my research reports, I explained that banks were targeting growth in home loans but noted how risky it is during a recession. I explained that if “home prices lag and banks try to seize collateral at the same time, the result could be a self-fulfilling prophecy of lower home prices and lower collateral, not to mention unique political fall-out.” The bank stock index is still down by one half since that time.
2007: Citigroup downgrade- ln 2007, a decade worth of poor management culminated in what I considered some of the worst management that I had seen in my career. Despite the giant missteps of the CEO, the Citigroup Chairman said that the CEO’s job would be safe for many years to come. I downgraded Citigroup stock to sell. Citigroup would have failed during the crisis if not for government intervention.
2007: Reiterate Sell on regional banks- There were no buy ratings on 16 regional banks, given concerns about risky lending, risky funding and lack of revenue options. The stocks declined by over 2/3rds throughout the crisis. Since that time, l’ve reinforced the theme about weak revenues for the entire bank group, comparing it to a lighter version of what has been seen in Japan and projecting that revenues this decade will be the worst seen since the Great Depression.
MISSES:
1995: Wrong merger analysis-One of the 10 largest banks (PNC) bought another large bank in a deal that I thought was ridiculous. They were paying way too much and the combination did not make strategic sense. Even with the right strategy, more than 2 out of 3 mergers do not pan out well. Shareholders in mergers like this must approve the deal, and when I talked to shareholders, I kept hearing that they were going to vote against the transaction. After I found that most of the largest shareholders were going to say “no” to the deal, I published a research report saying that the merger would get denied. I suggested that PNC, which was attempting to buy another bank, would itself get taken over. While a good number of shareholders voted against the transaction, the vote wasn’t even close. Shareholders approved the deal. I admitted publicly that I was wrong and learned the lesson that sometimes investors, like management, want me to serve a certain role that is only helpful to them. By the way, Warren Buffett sold his shares instead of hanging around.
From the Inside Flap
From Mike Mayo, the star banking analyst once nicknamed the “CEO killer,” comes Exile on Wall Street: One Analyst’s Fight to Save the Big Banks from Themselves, the true story of a man who dared to speak out against the status quo on The Street.
The book centers around one truth: the financial crisis hasn’t changed a thing. Chronicling Mayo’s time working first for the Federal Reserve in Washington and then with many of the biggest banks in the world, the book is packed with outrageous adventuresfrom management escorting him out of the Lehman Brothers building to getting fired from Credit Suisse for putting a sell rating on the entire banking sector to being banned from speaking to the media by Deutsche Bank because of his “negative” views. Wall Street has been playing dirty for years, and Mayo analyzes the fallout stemming from the market crash, pointing out the numerous holes that still exist in the system.
Offering a remarkable look at the behind-the-scenes machinations of the biggest financial institutions, Exile on Wall Street is a gripping read for anyone with an interest in business and finance, U.S. capitalism, the future of banking, and the root causes of the financial meltdown. It is also an invaluable resource for bankers, finance practitioners, and other industry professionals.
From the Back Cover
From Mike Mayo, the star banking analyst once nicknamed the “CEO killer,” comes Exile on Wall Street: One Analyst’s Fight to Save the Big Banks from Themselves, the true story of a man who dared to speak out against the status quo on The Street.
The book centers around one truth: the financial crisis hasn’t changed a thing. Chronicling Mayo’s time working first for the Federal Reserve in Washington and then with many of the biggest banks in the world, the book is packed with outrageous adventures from management escorting him out of the Lehman Brothers building to getting fired from Credit Suisse for putting a sell rating on the entire banking sector to being banned from speaking to the media by Deutsche Bank because of his “negative” views. Wall Street has been playing dirty for years, and Mayo analyzes the fallout stemming from the market crash, pointing out the numerous holes that still exist in the system.
Offering a remarkable look at the behind-the-scenes machinations of the biggest financial institutions, Exile on Wall Street is a gripping read for anyone with an interest in business and finance, U.S. capitalism, the future of banking, and the root causes of the financial meltdown. It is also an invaluable resource for bankers, finance practitioners, and other industry professionals.
About the Author
MIKE MAYO is one of the top-ranked banking and finance analysts of the past twenty years. Mayo was the only analyst to testify during Senate Banking Committee hearings in 2002 on conflicts of interest on Wall Street, and in 2010, he testified again, this time as the first analyst to speak on the causes of the crisis. He has worked at Wall Street firms including UBS, Lehman Brothers, Credit Suisse, Prudential Securities, and Deutsche Bank. He currently serves as Managing Director at Credit Agricole Securities, which provides services in the United States for CLSA, a global boutique brokerage firm. In 2008, Fortune named him one of “Eight Who Saw the Crisis Coming.”
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