The NYT Magazine printed a piece over the weekend called “Too Much Credit,” penned by hedge funder Ben Heller, who runs the emerging markets desk at his firm. Heller wrote about the frustration he would inspire in salesmen trying to pitch him to make loans and investments in developing countries, by asking “pointed questions,” and sometimes– OMFG– passing on deals. One guy was particularly pissed off that Heller turned down a gas project in Indonesia after it came out that it was “controlled by a shady family that defaulted on lenders a few years before, sticking them with losses of 90 cents on the dollar.”
As the credit bubble grew, and more bankers started taking Heller’s rejections personally, he stopped saying no fucking way from the get-go, listened to every ridic pitch, and actually said yes to a few he later regretted the morning after (“Anybody out there care for a small Argentine oil field? I’ve been assured that the angry gang of Mapuche activists blockading it will be gone soon.”)
Then, last year, when things got really bad, Heller’s firm decided it had to take off the beer goggles (kidding: it is a serious, prudent firm that never drinks on the job) and drastically cut back on EM loans (much like…a lot of places). And passing on the deals they might’ve in better times given a drunken bang (ultimately leading to PCD– post-coital depression) felt good! Sayeth BH:
The constraint on new investment paradoxically restored my freedom. “No!” I declared.
“Just … no?”
“Should I elaborate?” I asked. I told him that it was the dumbest idea I’d heard in a long while, and that I’d sooner pile up hundred-dollar bills to make a bonfire than invest.
I hung up abruptly, and I began to feel a long-forgotten rush. The rush of calling foolishness by its true name. The pleasure of meting out chastisement to presumption. The satisfaction of knowing that my no meant a death blow for this bad idea, because there wasn’t an uncritical yes waiting next door. I am capital’s gatekeeper, and you shall not pass!
Nice! Standards and whatnot. Obviously, though, we wanted more horror stories, so we emailed Ben and asked him to tell us about some other deals that had been de-nied (as recently as…yesterday).