"I think the cycle in the late 1980s and the current one were very similiar," Moelis said. "There was a tremendous amount of liquidity in the 1980s, and deal multiples did get driven into excess. But they were restricted to one firm, so when the crisis hit it was restricted to one firm, Drexel."
"The cycles aren't disimilair; it's just that the breadth of this one is so broad because so many firms were involved," he continued. "Drexel went down for many of the same things happening in this cycle."
"At Drexel, I got to see what happens at the end of a cycle, and I think this cycle isn't going to end like the others. ... We haven't begun to see e-mails from people on the trading floor. These cycles have an ability to go on and get more serious. If the economy continues to struggle and ends up with more problems, remember we're representing teachers and policemen here. The everybody's 'doing it excuse' isn't going to hold when blame starts getting placed. And we don't know where it's going to go," Moelis added.
At the time Drexel met its demise, Moelis also added, his mother called him up and asked, "How come you never go to jail?" - George White
See Dealscape post on Kenneth D. Moelis
See profile of Kenneth D. Moelis
See more Dealscape posts from the Private Capital Symposium
