Biography: J. Morton Davis

J. Morton Davis is owner and Chairman of D.H. Blair Investment Banking Corp., a New York City investment bank established in 1904 and leading investor in and advisor to emerging entrepreneurial and growth companies, where he actively heads the day-to-day corporate finance activities.  Investment banker, entrepreneur, investment analyst, economist, and venture capitalist, Mr. Davis is Wall Street personified.  The over 400 companies for which he has raised more than $3 billion over the years have created a countless number of jobs and have added exciting new products including breakthrough drugs, unique electronic and telecommunications products and have resulted in immeasurable productivity to the American economy.  Few people on Wall Street possess his rare brand of financial expertise.  Fewer still are as successful. 

Mr. Davis has been the long-time majority owner of The Hill, the unique, rapidly growing digital media brand with unrivaled influence at the highest level of power in the most important political and thought leadership community in the world.  The Hill is among the most influential publishing brands in Washington and is a “must read” for Congress and others on Capitol Hill.

Mr. Davis has served on the Boards of Research! America, Foundation for Future Generations, and the Freedom Foundation at Valley Forge.  He also served on the Board of trustees of Yeshiva University and on the Board of Sy Syms School of Business.  Mr. Davis is the recipient of a number of prestigious awards and honors, including the Synagogue Council of America’s Covenant of Peace Award, the Republican Party’s Distinguished Service Award, and the Intrepid Museum’s Freedom Award.  In 2011, The International Center for Autism Research & Education honored Mr. Davis’ lifetime of achievements in a special tribute luncheon in the U.S. Capitol.

Mr. Davis has written two books, the most recent of which, From Hard Knocks to Hot Stocks, received flattering reviews from some of America’s most prominent business and economic leaders, including Senator Bob Dole, Alan “Ace” Greenberg, Carl Icahn, Donald Trump and Larry King.  Mr. Davis’ earlier book, Making America Work Again, was acclaimed by a number of notable economic scholars, in addition to being praised by President Ronald Reagan in a tribute to Mr. Davis where President Reagan recognized Mr. Davis’ long career of hard work and his support of the creative arts.

A member of Phi Beta Kappa, Mr. Davis received his A.B in Economics, magna cum laude, from Brooklyn College in 1957 and his M.B.A, with distinction, from the Harvard Graduate School of Business in 1959.

He resides in Lawrence, New York with his wife Rozi, and is never very far from his four daughters, and many grandchildren and great grandchildren.

Luncheon tribute to Morty Davis

An Open Letter to Mario Draghi:

Saving All the World’s Economies:
Chairman Draghi, The 1% Solution to
Save Spain, Europe and the Euro from Financial Disaster

Chairman Draghi, you are doing a truly outstanding job as head of the European Central Bank in dealing with the menacing financial crisis that the European banks and the sovereign member states that employ the Euro as their currency are experiencing. Enormous debt and ongoing deficits have devastated the ability of EU members like Greece, Spain, Portugal and Italy to raise the money they need to function currently and/or to repay their maturing debt obligations. Their sovereign bonds have collapsed and seriously threatened countries like Greece, and potentially others, with impending insolvency. As a consequence, in order to successfully raise any new funds at all, the interest rate these countries are now compelled to pay has risen to prohibitive, unsustainable levels, and the price of their outstanding debt securities has sharply fallen. And since these very same collapsed-in-value debt securities comprise the overwhelming proportion of the investment holdings of the banks of each of these countries, the financial condition of almost all of their major banks is abysmal and in imminent danger of failure with all of the terrible consequences to the economy and the nation that such an eventuality would entail. So clearly these countries cannot allow such a ruinous debacle to occur. Accordingly, these countries seemingly have no alternative but to rescue these “too big to fail” vital institutions. To do that they need to raise even more money to save these banks. And, that increased demand for these additional funds further exacerbates their deficits, their debt and their cost of money, which increasingly jeopardizes their solvency as well.

It’s apparent that the success of the banks and the sovereigns are intimately intertwined. To the extent that the financial condition of these countries can be improved, the value of the outstanding bonds which the banks hold would rise and thus the banks’ financial position would be significantly improved and their governments would not need to step up and spend additional borrowed funds to rescue them. Moreover, if the banks became stronger the markets would recognize that these countries are no longer being strapped with the immense financial burden of saving these banks, and their credit ratings would improve, their interest costs would decline, and their financial condition would strengthen (along with the Euro) since they would have a much lower interest carrying cost to run their countries. The health of Europe would be revived and its economies could once again resume a renewed growth, no longer saddled by the threat of imminent insolvency.

Chairman Draghi, you have already implemented constructive steps that have helped enormously by providing the major banks of Europe with approximately $1 trillion of loans at 1% for a three year period, collateralized by the government bonds they held. By encouraging them to use these borrowings to buy the bonds of their own governments in the open market, you prevented a complete collapse of the price of those bonds and a total banking meltdown and thereby ensured the survival of those sovereign member nations who are in such egregious trouble, and, in the process, you at least temporarily avoided the threat to the Euro itself.

And now helpfully, the European Financial Stability Facility is providing “bailout” funds to countries such as Spain so that they can salvage and, hopefully, resuscitate their banks. But this well intentioned action only burdens Spain with still more debt and doesn’t do much, if anything, to reduce the oppressive cost of carrying their overwhelming debt. Mr. Chairman, I would ask you to consider, and for you to urge your member states to allow you, to provide Spain (and several other at-risk sovereign states) the same 1% financing that you made available to the banks on newly issued debt that you would purchase from them. This would instantly, automatically, lower those countries’ cost of acquiring the money they need (and of course thereby assist in reducing their operating deficits). As they would then use these 1% borrowings to pay off their maturing outstanding bonds, the market would expeditiously, if not instantly, increase the market value of the outstanding bonds that are traded and quoted. Such initiative would thereby effectively and rapidly strengthen the balance sheets of the banks, and ipso-facto repair their financial condition. This would go a long way in solving the dangerous intertwined financial quandary that the fear of the banks and/or the nations are in imminent danger of failing which now prevails and which threatens the very survival of a number of European nations and of the Euro itself.

Mr. Chairman, I urge you do it. Do it now! Provide 1% money to these governments just as our U.S. Federal Reserve has in effect done for the U.S. government (without generating the slightest inflation or any other untoward side effects).

Please do it. Save Spain and the others. Save the Euro. And save the World’s economies from a harrowing financial nightmare.

You said you would do “whatever it takes.” Just your having promised that produced a remarkable rise in confidence and dramatically uplifted all the world’s financial markets. So please do what it takes. Bless you!

-- J. Morton Davis

J. Morton Davis has been a Wall Street investment banker for over 50 years and is the author of Making America Work Again and From Hard Knocks to Hot Stocks. He has authored numerous articles and white papers and is a shareholder in the parent company of The Hill, a Washington, DC political publication.

A plan to save Europe

By J. Morton Davis - 02/13/12 Perhaps some would argue it’s none of our business and we should therefore refrain from giving any gratuitous advice to our friends. However, because of the critical risks to the American economy emanating from the dire financial situation of various members of the European Union, or in the event of a worsening of Europe’s chronic sovereign debt crisis, it is of vital interest to us in the United States that a constructive resolution be effectuated. So, in an effort to hopefully be helpful to these important friends, I here attempt to offer a financial plan that would result in a favorable European solution. To begin with, national economies should not be subjected to the volatility of the financial markets’ participants or to any concerted short-selling attack by bond or derivative traders — who can, and have, induced a boom and bust “debt bubble” — which exposes these nations to the risk of having their economies pushed into a devastating recession and the consequent egregiously painful cost of losing millions of private and public-sector jobs. In order to insulate against this kind of occurrence, legislation similar to Dodd-Frank regulations must be enacted. In the meantime, the European Central Bank (ECB) should act — much like the Federal Reserve Bank in the United States, which is mandated to keep both inflation and unemployment down in order to engender economic stability — to become the “lender of last resort” when it feels it would be both necessary and beneficial. In this way, the ECB would thereby serve as a vital safety net whenever liquidity dries up, and particularly when its countries’ economies and/or its banks experience a liquidity crisis. Specifically, the ECB should buy up all of, or as many as possible, the devastated discounted sovereign government bonds of those euro countries whose debt instruments are under assault and have thus driven up the interest rates to unprecedented levels, which they must now pay to raise desperately needed capital. Indeed this must be done, because they are at the point where their very solvency is under threat and the consequences of default could be terribly dangerous and ultimately disastrous — not just for all of the European Union members, even including the still very strong ones like Germany and France, but also for countries outside Europe, especially the United States. The ECB could then make funds available to these countries at very low rates of interest (close to zero) as it recently has done for the European banks and as the U.S. Federal Reserve has likewise done for American banks during our own recent financial economic crisis. In turn, these governments, which are in such financial stress due to the fact that so much of their debt is obligated to be paid off quite soon, can use the very low interest funds to buy back the bonds that the ECB had bought, in some cases, at as much as a 50 percent discount or more. In this salutary process, these sovereign nations could be rescued from the disastrous financial straits they are currently in and would once again be able to finance their financial needs at very reasonable interest rates. At the same time, all the banks that still hold so much of these euro countries’ debt would benefit enormously as they would experience a vast appreciation of their sovereign bond holdings — these countries’ outstanding bond ratings would be upgraded, and thereby the banks would be revitalized and returned to financial health. It would result in a win-win for all involved — for the euro nations currently under such distress and for the banks who as a consequence of this distress are suffering similar imminent financial danger. The exaggerated concern by some that such massive printing of money would lead to damaging explosive inflation is, in light of the prevailing recession and disinflationary environment, clearly disproven by the fact that despite the vast amount of new money that the U.S. Federal Reserve has printed, the United States has not experienced any increase in inflation and U.S. interest rates are at historic lows. To prevent the recurrence of the present dire situation brought about by the undisciplined, uncontrolled and unsustainable fiscal policies of many of these governments, those countries so accommodated would of course be required to introduce such fiscal disciplines that the ECB and the European community leadership would impose as a condition to receiving those low-interest rate funds from the ECB. In this process the euro as well as the Union of European countries could be solidly revived and can move on to once again achieve desirable, healthy economic growth. Davis, a shareholder in The Hill’s parent company, is a Wall Street investment banker and author of Making America Work Again and From Hard Knocks to Hot Stocks.