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In and Out on Main Street
Book Review: In and Out on Main Street
January 2012
BY Julianne Senulis

Exile on Main Street author Mike Mayo is, by trade, a bank analyst, indeed, now a veteran. By reputation, he’s known as either a fearless truth-teller or a pesky gadfly--depending on who you ask.

So I welcomed the challenge of placing pre-conceived notions aside and objectively reviewing his book. Exile gives you a sense of Mayo’s roots, his rants, his ratings, and his recommendations for the industry’s future.

Mayo is not your ordinary guy. He is maniacal in his work, exercise regimen, and self-certitude. Nor is he shy about reminding us about his work ethic, his honesty, and how misunderstood he is. On the other hand, his attitudes can in parts be refreshing. In an industry where it can be more lucrative to follow the herd, stay positive on bank stocks, reap the underwriting benefits that go apparently go hand-in-hand with flattering coverage, Mayo is a fierce contrarian.

His background and where it led him, open Exile.

From Fed analyst to bank stock analyst

Son of Eastern European immigrants and a graduate of the University of Maryland, Mayo believes he lacked the Ivy League connections to land his first dream job in New York. So, he gained his entrée to banking as a staffer at Federal Reserve Board headquarters in the early Greenspan years. Mayo’s account of his 20-plus years as a bank analyst spans his formative years at the Fed to his hard-fought-for posts at numerous investment banks. (Today he is managing director at Credit Agricole Securities.)

His accounts of his Fed colleagues’ integrity are glowing, casting them as humble public servants zealously safeguarding the soundness of the banking system. The account is nostalgic--the first chapter is actually titled “’God’s Work’ at the Fed,” a play on Lloyd Blankfein’s notorious 2009 statement on the work being done at Goldman Sachs. But Mayo’s certainty about the uprightness of the Fed in those days (the late ‘80s and early ‘90s) is endearing. This is a guy who really, really wants to do the right thing and to be around people who share his convictions.

He leaves the Fed when, after nearly a year of hounding prominent New York bank analysts, he lands an associate analyst position at UBS. And so begins his foray into the world of sell-side equity research on banks, and his experience with the analysts and bank executives he meets along the way.

After moving on to Lehman Brothers two years later, Mayo is effectively plateaued and, as he tells it, pushed out by the firm’s investment bankers for placing sell ratings on the banks he covers. Next stop is Credit Suisse, from which he was fired, followed by six months of unemployment. Mayo eventually finds work at Prudential, where he writes that he’s finally able to run an independent research shop where objectivity is not only permitted, but encouraged.

Alas, Mayo finds that objectivity has a price.

This is excerpted from the article ”In and out on Wall Street: Analyst Mike Mayo’s take on the bank analyst’s role,” which was posted on January 5, 2012, on the website of ABA Banking Journal,

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