Weekend Observations

I was in Annapolis, MD over the weekend. It was hot, muggy, and swimming with bourbon (who knew bourbon cools you down?). I noticed that Annapolis has changed quite a bit since I was last there. The Naval Academy though, has not changed at all. In other words, the town is growing up and the USNA matters less than it ever did before. I couldn't help but recall that rumor I heard back in the early Clinton years. Apparently there were several Congressmen and Senators interested in closing down West Point and Annapolis with a consolidation program at the USAF Academy. Colorado Springs would become, under the rumored plan, the one service Academy where graduates would funnel into their service of choice on an as needed basis. Multi-disciplinary warfare was the buzzword. In today's world, I think that rumor might have some more legs.

Also, I visited a regular commenter on this site. He showed me the specs on some recent mezz deals that fell through. I had already heard that in the buyout market private equity was pricing so aggressively and so cheaply that deal flow to mezz funds was slowing up. But what I was showed were some pretty startling numbers. The capital being offered was dirt cheap, but the deal went to one particularly infamous PE group who priced it as a virtual giveaway. We both guess that over the next few years as the deals sour (which at those prices, they've got to) PE groups will be set up for some hard times. This gives a little weight to the doomsday scenario of a chain reaction reorganization in the PE world. Could be fun!