A "risk averse" Warren Stephens, heir to the vast fortune accumulated by his father and uncle, is featured prominently in today's Wall Street Journal as a counterpoint to broad carnage in the financial world. The Stephens firm is characterized as having safely negotiated today's troubled waters with a conservative, go-slow approach.
The Little Rock financier recounts ruefully his family's involvement in financing of Bill Clinton's 1992 presidential campaign.
As he tells the story, his family never once supported Bill Clinton in any of his campaigns, until the fateful 1990 gubernatorial race, when his GOP opponent was a bitter foe of the Stephens clan. A year later Mr. Clinton called in his "new best friends" and said he was running for president. They figured he'd be "smoked" by the superlatively popular President Bush, but donated a few bucks to keep the governor happy.
Then came Mr. Clinton's stumble in the early primaries amid the Gennifer Flowers eruption, and Mr. Stephens picked up the paper to learn that Worthen Bank, partly owned by his family, had fronted Mr. Clinton's campaign an emergency loan of $3.5 million. The loan may have been secured by federal matching funds. It may have carried a steep interest rate. But a story line was sealed in the national press that painted the Stephens family as the jerkwater Svengalis behind the Clinton campaign.
The Clinton experienc, he says, was bad for Arkansas, and bad for Stephens Inc. "The publicity cost to the firm was awful . . . You'll never know what business you lost because of it."
Of interest is Stephens' take on the current situation.
Says the article:
The solution, one way or another, is likely to be government's heavy hand to suppress risk-taking on Wall Street. That's why Mr. Stephens sees an opportunity for a firm like his. He's opening the kimono a bit, and even thinking about an ad campaign, because he sees talented people being cut loose from Wall Street who might be a "good fit" for the Stephens way of doing investment banking.
So what's the firm telling its clients today? "This is no time to be a hero," he says, no time to try to catch the bottom and bet on a rapid turnaround.
Mr. Stephens describes himself as a "glass half-full kind of guy" who's been forced to become a situational pessimist. A child of the Reagan era who once thought "lower taxes and deregulation were the norm," he now suspects Reagan is "the aberration."