FBR's Awful Truth

WP ^ | 03/14/08 | Steven Pearlstein

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FBR's Awful Truth

By Steven Pearlstein

Friday, March 14, 2008; D01

There was a time when lots of us were rooting for Friedman, Billings, Ramsey, the homegrown investment bank. With its strong bench of analysts, its focus on financial services and technology, its scrappy trading desk and a loyal network of institutional investors eager to buy up whatever it was selling, FBR was the Washington upstart determined to beat Wall Street at its own game.

But in the decade since it began selling its shares to the public, FBR seems to have careened from one disaster to another, losing billions of dollars for its customers and investors and constantly restructuring itself to give the illusion of reinvention. One of the founders was forced to resign from the firm after a federal investigation into whether the company had given inside information about one of its customers to another. Its own stock is so beaten down -- from a high $28 four years ago to yesterday's close of $1.93 -- that investors are pricing it at less than the company's book value.

Sad as it is to say, I'm coming to the conclusion that FBR has come to represent everything that's bad about Wall Street, quick to jump on every fad, substitute hype for solid research and earn big fees for peddling junk.

Let us recall, for example, that FBR was an active financier and cheerleader for the tech and telecom boom of the late '90s, putting its customers' money and prestige behind dozens of flameouts that included LifeMinders, WebMethods and Varsity Books.

In between bubbles, it took the lead in funding a Bermuda reinsurance company that entered the market just in time to get buried under two of the worst hurricanes in history.

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Ping!

[RSmithOpt]

Sad as it is to say, I'm coming to the conclusion that FBR has come to represent everything that's bad about Wall Street, quick to jump on every fad, substitute hype for solid research and earn big fees for peddling junk.

Pretty much goes for the majority of our "instant gratification - I WANT IT NOW!!!" society we've built.

Once again, Conservative ideals and practices have won out. Now...we just gotta tighten the grip to get the liberal bone heads to say 'uncle.'!