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When the deal was announced, some surely gasped.  The fact that Verizon Communications decided to purchase all of Vodafone's stake in Verizon Wireless was not a surprise.  Vodafone had decided to sell its stake and units in mobile phones.  What likely caused market observers and headline writers to turn their heads in wonder was the size of the deal, the big numbers. They were huge. Deals and big numbers excite investment bankers and can spur them to pant and salivate. In the Verizon case, they certainly will, once Verizon gets around to handing out advisory and underwriting checks for fees. Deals and big numbers tend also to cause hiccups and coughs among some investors, research analysts and bank risk managers. This deal is big, one of the largest ever. Perhaps it sends too many hopeful signals that an era of super-size deal-making has returned.  Verizon Communications announced it will pay a whopping $130 billion for Vodafone's stake. To raise $130 billion to pay ...

Citigroup caught everybody off guard this week, when its board announced it had asked for the sudden resignation of CEO Vikram Pandit. Or did it catch anybody off guard? Was this a gesture  investors pushed for? Was it the right move for the big global financial institution that seemed to have leaped a hurdle to move beyond the darkest days of the financial crisis--back when there were moments when many thought its survival was in jeopardy? Over the past few years, Pandit and team took appropriate, bold steps to make the behemoth profitable again. They sold assets en masse . They shuffled bad, non-performing, defaulted, bankrupt, and/or foreclosed assets into a special holding company and, little by little, sold off these positions, properties, securities and full operations.  By doing so, it rid itself of spoiled segments and began to polish ongoing core operations.  They downsized in every way possible--in just about every unit, operation, division, and geography. They ...

Moody's this week downgraded 15 banks, including top names such as Morgan Stanley, Citi, Bank of America, Goldman Sachs and JPMorgan Chase. This was not unexpected. Morgan Stanley's rating (Baa1) is now barely a notch above "high yield" status (or whatever the nomenclature today is for non-investment grade, "junk" or "non-prime" issuers). Banks, analysts, and equity markets have tried--even until now--to determine and quantify the impact of the downgrade on each bank's profitability, ROEs, deployment of capital, liquidity, and access of funding, although banks all over are arguing they are stronger, better capitalized, more averse to risks and subject more to oversight and regulation than they were five years ago. Ratings, for example, have impact on trading activity, as much as access to funding and the interest rate they pay on outstanding debt. When ratings decline, banks must pledge more in collateral for derivatives and tra...

What's next for Parsons? A fter an illustrious business career that spanned decades, Richard Parsons is calling it quits this month.  He announced he wouldn't pursue re-election as chairman of the board at Citi. (Citi , as many know, has been an important, decades-long supporter of the Consortium and a host at Orientation Programs and Consortium events in New York.) Has an era ended?  Parsons has been a pioneer in many ways, and he wraps up a career filled with quite a few "African-American" firsts."  He was CEO in the 1980s at Dime Savings Bank, at that time a well-known New York regional bank. He later became CEO at AOL Time Warner in the 2000s, landing right in the middle of turmoil from the cantankerous combination of AOL and Time Warner.    Few African-American lead or have led major financial institutions, so Parsons' exit from the Wall Street scene is noteworthy.  In 2012, Kenneth Chennault continues to preside over American Express . Stanley O’Ne...

Let's get real. As we turn the corner and head toward an uncertain 2012, where are the real opportunities for MBA finance professionals ? What's the real scoop? In an environment where some tip-toe when they project better scenarios next year, but where every other day large banks announce lay-offs by the thousands, what's the real story? Who's  hiring? Who's promoting solid performers? Who's luring those interested in finance and promising long-term career paths? Where are the sectors or institutions that will harbor finance pros and allow them to grow, contribute and thrive over the the next few years? Let's take a glance and gauge vibes and signals across the sectors. 1.  Investment banking, corporate finance.   From now until about mid-2012, you know banks won't commit. Uncertainty forces them to be hesitant. They'll want to see sustained trends in an economic recovery. Until then, banks will resort to old-time habits of firing rashly and excess...

Finance types everywhere are familiar with Warren Buffet's annual sermon to shareholders in the form of a letter in the annual report. It's seldom, if ever, a bogged-down analysis of company ratios and trends. More a colloquial finance lecture. Everybody knows the Buffet letter, an honest pontification on business, the economy and the financial system. Derivatives are, he once notably said, "weapons of mass destruction" (although Buffet's Berkshire Hathaway operating vehicle has used them adroitly from time to time). This year, Buffet has other priorities and distractions. He has an internal crisis to manage. Top deputy David Sokol is under investigation for suspicious trading activity. Sokol reportedly bought an equity stake in a company before Berkshire announced it would purchase it. Buffet has publicly scolded Sokol, and Sokol, as expected, is no longer next in line to run Berkshile. That thorny current issue undermines the message Buffet...