Roll Over, Mr. Potter
Systemic risk is coming to a bookstore near you.
"Union Atlantic," a forthcoming novel by Adam Haslett, tells the story of a (fictional) president of the Federal Reserve Bank of New York who tries to prevent a market meltdown after the collapse of a (fictional) bank the Fed regulates. The book got a glowing write-up in the current issue of Esquire, which compared it to the sweeping works of Norman Mailer and Tom Wolfe.
Esquire has posted an excerpt from the novel's prologue, but it doesn't reveal much of the plot. It does, however, establish one of the main characters: Doug Fanning, who will eventually become a rogue executive at the fictional bank (named, naturally, Union Atlantic).
When we meet him, Fanning is in the Navy. His ship has accidentally shot down an Iranian passenger plane, which his superiors mistook for a fighter jet. Asked by a senior officer to leave the docked vessel and drive into Bahrain to get more cigarettes (which are being doled out to the crew as a token recognition of the ordeal they've been through), Fanning replies, "But I've got mine."
Spoken like a true heir to Henry F. Potter, the villainous banker in "It's a Wonderful Life." But we may have to wait until Feb. 9, when Random House Inc.'s Nan A. Talese imprint releases "Union Atlantic," to know if Fanning measures up to the terrifying workout executives in Wolfe's "A Man in Full."
Amherst in CMBS
Amherst Securities Group LP is entering the commercial mortgage-backed securities business and has hired Darrell Wheeler, a veteran analyst.
Wheeler will join the firm's New York office early next year as a senior managing director and the head of CMBS strategy, Amherst said Wednesday.
The broker-dealer, which already has a substantial operation in residential mortgage-backed securities, said it "intends to build a comparable operation in the CMBS sector as it moves to help clients navigate a market which is expected to offer many challenges as well as opportunities in the coming years."
Joseph Walsh, Amherst's president, said in a press release that "just as our clients have relied on Amherst for insight into the turbulent RMBS market, we believe that there is a similar need for access to loan level data, credit analysis and cash flow analytics on commercial securities."
Wheeler has worked at Citigroup Inc. and its predecessor Salomon Smith Barney since 1994. His research team was ranked No. 1 for six consecutive years in an Institutional Investor survey.
According to Amherst, Wheeler wrote early reports warning of decreased rating agency standards and highlighting aggressive loan underwriting. Earlier in his career, Wheeler worked out and managed distressed real estate assets.
"Homeowners of a new and unattractive breed are plaguing the Federal Housing Administration these days. Known as 'the walkaways,' they are people who find themselves unable to meet their mortgage payments — and to solve the problem simply move out their belongings at night, drop their house key in the mailbox and disappear."