Henry Kaufman Quotes

The proliferation of credit instruments, financing techniques, and vast matrices of trading and investing opportunities requires highly objective evaluations of risks and rewards, and a sense of historical perspective, if excessive risk taking is to be avoided.

In the 1890s and 1810s corporate consolidation inspired an enormous public outcry against the "trusts" (...big business). Newspapers overflowed with editorial deriding... "robber barons," and for the first time in American history the federal government stepped in to regulate... First came the ... designed to limit discriminatory railroad rates, and then the Sherman Anti-Trust Act of 1890—Congresses' first attempt to constrain monopolistic practices. In practice, both acts proved to be weak against the predominant power of big business. For decades, the courts in effect made regulatory policy in how they interpreted... these two...

[F]inancial markets can be considered one of the great wonders of the world.

In 1900, two-thirds of the nation's... citizens still lived in rural communities... But that was changing rapidly (by 1920 more than half of all Americans lived in cities), thanks in large part to the explosive growth of manufacturing. ...[T]wo-thirds of the nation's output was in manufactured goods, even though manufacturing employed less than a quarter of the work force. The average plant producing petroleum, iron and steel, and textiles (the three leading industries)... were belied by the behemoth factories... Carnegie... christened the new century by selling his sprawling steel interests to J. P. Morgan, who promptly assembled the $1.4 billion United States Steel Corporation in 1901, the nation's first billion-dollar industry.
Still, American manufacturing was then churning out a tiny fraction—roughly 1 percent...—of what today's cleaner and enormously more efficient plants produce.

Often the real value of management decisions does not become apparent until many years later.
Perhaps what we should do is try to analyze the impact of decisions in any one period on longer-term performance. In the political arena, for example, why should we emphasize the skill and acumen of national policy-makers only on the new initiatives they introduce and legislate? Sometimes the events that do not materialize are more important than those that do. We should try to ascertain what decisions political leaders are undertaking that will benefit their nations subsequent to their terms in office.

[R]icher nations have larger stock and bond markets than poorer ones, and the assets of financial intermediaries are much larger in relation to GDP.

The professor that had the most influence on me was Marcus Nadler. ...As a teacher he had a rare ability to break down complex subjects into more palatable and understandable points. ...[H]e had a great capacity to simplify, to turn abstract ideas into practical applications. ...His lectures helped shape my belief that financial institutions and markets must balance entrepreneurial drive with responsibility. And his fairness and openness to opposing points of view influenced me to conclude that no one school of economic thought has a monopoly on wisdom.

[T]he most striking feature of America's Gilded Age banking and financial markets is their lack of regulation. Wall Street was periodically upended by... colorful figures such as , Jim Fiske, and Jay Gould to manipulate prices and corner markets. The only force countervailing against such panics was a handful of more responsible investors, most notably J. P. Morgan... [who] engineered a successful rescue operation after the ... That episode inspired Congress to begin... plans for a central bank. After all, Morgan couldn't live forever.

Salomon's growth over the next generation would astound even its most optimistic partners. ...And as we would all see to our amazement, Salomon's rise was reflected in broader and equally dramatic transformations in the financial markets—as credit burgeoned, financial crises occasionally rocked the markets, prices and interest rates moved with new volatility, institutions underwent massive shifts, and monetary policy emerged as the dominant force in sustaining economic growth.

I take great pride in being an American. Consequently, when financial excess threatens our economic moorings, and thus our extraordinary dynamic and pluralistic nation, I have often spoken out for saner behavior and more effective policies.