A rebel in the ranks: Mike Mayo on Wall Street

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Stock analysts are not known for being a rebellious sort -– their jobs generally involve writing up dry technical reports on public companies. But Mike Mayo is not your typical stock analyst. Since joining the industry nearly 25 years ago, he has shaken up the financial world with his bold and forthright analysis of the banks he researches.

In 1999, he told investors to sell all bank stocks. In 2007, he was ahead of the pack in downgrading Bear Stearns and Citigroup. (A fuller record of those calls is here.) Perhaps predictably, this hasn't earned him a lot of love, given that he has worked at banks himself and that his employers wanted to do business with many of the banks he was analyzing. This led to often short and stormy tenures at UBS, Credit Suisse and Lehman Bros. before he landed in his current position at Credit Agricole Securities.

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M&C: What are the problems at banks that analysts and executives are downplaying today?

MM: This year will show the slowest revenue growth for U.S. banks since 1938, and this decade will be the slowest decade of revenue growth since the Great Depression. I think the banks are downplaying just how much revenue pressure they are likely to feel, and as a result, they have been slow to better position their companies for that environment.

You saw in the case of MF Global what happens if you don't accept the slower growth. Either you accept the slower growth or you reach for revenues and risk failing.

http://latimesblogs.latimes.com/money_co/2011/11/mike-mayo-exile-on-wall-street.html