Archbishop Paul Marcinkus, Mayor of Vatican City, President of The Institute For Religious Works (aka Vatican Bank) and The Jew From The Bronx

"Bernie did you see those Swiss guards when you checked into the Vatican? And you know my secretary Mauvi don't you? Well Mauvi and those Swiss guards get paid. Don't bring me deals that don't bring me income."

And so down the tubes went a proposal that I made to Archbishop Paul Marcinkus, the President of the Vatican Bank and Mayor of Vatican City. I had developed a personal relationship with the Bishop over a 10 year time span and he had agreed to see me regarding an oil and gas royalty deal. The deal was dependent on successful wildcat drilling to generate income. Turned out that the guy in charge of the drilling couldn't find his ass with either hand much less oil or gas with drilling equipment. He didn't find even a mouthful of oil or gas. The author Philip Wylie once said that "the problem with common sense is that it ain't so common".

But the Bishop proved that he did have some common sense (aka street smarts), and he turned down the deal which turned out to be a bad bet on a bad concept. But I stayed in touch with the Bishop. He was a terriffic guy. He loved playing golf and I would send him, from time to time, golf books and boxes of golf balls. He would "try" to convert me. He was "for decades, one of the highest ranking American prelates to the Vatican serving Popes John XXX III, Paul VI and John Paul II." But at the end of the day, he was in many ways a simple learned priest, from Cicero, Illinois without a financial background. The Bishop also lacked the deep seated cynical trait that is so crucial to being a successful money manager.

Sadly, he became embroiled in two scandals where one principal, a banker named Calvi, was found hanging beneath a bridge in London. Calvi had been a friend of the Bishop and was convicted of fruad. That association cost the Vatican Bank over $200 million. Previously the Bishop was involved with a shadowy character named Sidona, with Mafia connections, who died in prison in Milan after drinking a cup of coffee laced with poison. That friendship cost the Vatican tens of millions or so it is said.

At one point the Italian government indicted the Bishop, but he confined himself to Vatican City for a few years until the indictment was dropped. The Bishop was, for me a marvelous man who added significantly to the richness of my life, and I cried when I learned of his death from Mauvi, his secretary. It was rumored that he was "banging" Mauvi who was not my cup of tea. And no, in twenty years, I never did do a deal with him which had absolutely nothing to do with my affection for the Bishop.

Living For The Experience and Making No Money With The Bishop And The Vatican Bank

In 1970-1971, I helped found a venture capital group. As it turned out, the enterprise was disaster in spite of my partners being very successful in the venture capital arena. Not only was our basic concept terrible but the business plan really sucked. But the notion took me down a great lifetime experience road with the Vatican Bank (aka The Institute for Religious Works), Archbishop Paul Marcinckus and even The Knights of Columbus. I will be forever grateful to the Bishop for adding to the richness of my life (and I never "sold" him one deal).

One of my partners knew a guy (Lloyd Hand) who had been Chief of Protocol for President Johnson, so he knew everybody and his uncle. We paid him $10,000 ($56,000 today) plus travel expenses which added another $3,000 ($17,000 today) to introduce us to the Bishop who ran the Vatican Bank. The Bishop, we were told, ran the bank and was Mayor of Vatican City as a result of saving the Pope's life in the Philippines when the Pope was attacked by a nut with a knife. More on the Bishop and the Knights of Columbus in a later blog. That trip was, at the end of the day, a wild, booze driven, insane trip. Travel for me back then was a way to get away from a wife who disliked me (though I didn't recognize it at the time), really drink big time and walk around feeling like shit every day.

At that time, one of my kids was on the Mishmar David Kibbutz in Israel. So I thought I would "stop by" and see him before I went to Rome for my business. I thought Rome and Tel Aviv were "kissin' cousins", close by one another. That was a major misconception...almost 5 hours of drinking in the air. So I spent a night at the kibbutz which was memorable but hardly like staying at the Carlyle in N.Y. But this was but a few years after the 67 war and idealism and sacrifice were the mode in Israel. So it was impressive, if uncomfortable.

I went to Rome and the Vatican the following day to meet with the Bishop. The night before the meeting, we went for a horse and buggy ride to get acquainted with Rome. Expensive and a piss poor way to see Rome. Very boring. The next day we went to see the Bishop who was from Cicero. He had been an "advance man" for Pope Paul VI. The Bishop's hands were like ham hocks and he was as tough as nails. Smoked Pall Mall cigarettes like there was no tomorrow. But, at that point I was smoking 4 1/2 packs of Lucky Strikes (no filters) every day with yellow fingers. So the Bishop and I looked like two chimneys and that was right up my alley.

My partner who insisted on doing the major part of the presentation was a very nice, smart guy whose voice never seemed to stop "droning". Your eyes would glaze over as he droned on and on. He could put a sore ass in vinegar to sleep. The Bishop managed to stay awake and while he was not a financial man, he knew a dumb deal when he saw one and turned us down, out of hand. But it was for me, through the booze driven, cigarette haze and yellowed fingers, a fabulous experience and the beginning of a wonderful long term personal relationship with Bishop Marcinkcus...a great person guy in spite of his fruitless efforts to convert me. You can't make a silk purse out of a sow's ear. My trip back to SF was out of sight with unreal booze laden memories. More on that later.

From "The Way to the Top"

This quote is an excerpt from Donald Trumps book, "The Way To The Top" is from a top GE executive who managed some $180 billion when asked as to who was his strongest and most influential investor in his life.

"...But probably the most influential investor I've known — certainly the most eccentric — is a guy whose advice and counsel I seek out every day. His name is Bernie Feshbach, and to me he's been the lost and found of Wall Street. Bernie was a World War II Purple Heart award winner selling used cars, selling women's dresses, and working as a stockbroker. He's very well traveled and very well known throughout financial circles; he always wears his bow tie and his designer suits; and he knows all the maitre d's and concierges at the best restaurants and hotels all over the world. But more important, he knows where all the hidden closets are on Wall Street and where all the bodies are buried.

Bernie's about to celebrate the fortieth anniversary of his fortieth birthday later on this year and as such has experienced more market cycles than anyone I know. Every deal I ever did with him or recommended by him was a success. But Bernie's real value to me can't be measured by the deals we did or didn't do. It's my having the ability to pick his brain. Bernie's never been shy in voicing his opinions to me or of me, and his thoughts are incredibly valuable. Everyone needs a truly independent sounding board, preferably one that knows what he's talking about and without a personal stake in the outcome. Every business leader needs to find a Bernie Feshbach..." who was wounded at Okinawa. He grew up in the Bronx and after the war tried his hand at pig-farming, oil wild-catting,

Living on the Edge...of Money

If I knew that I was going to live this long I would probably have taken better care of my money. Ah where did the many, many millions I earned go? 'Cause I don't have even a small itty, bitty, little bit of it left. Profligate spending? No respect for accumulating money? Always spent at least a little more than I made? Guilty as charged of all of the above and more.

Did I enjoy being constantly overdrawn at the bank? I must have because I was constantly overdrawn. Me and keeping a record of the checks written while keeping a record of my bank balance weren't even kissin' cousins. I was totally arrogant about my ability to make money and my arrogance was well founded. A banker once asked me what I was going to do with the money I wanted to borrow. "Spend it" I said. He thought that I was being a smart ass, and he turned me down. But how did I make many millions of dollars disappear? No problem for this old, lower case jew.

While I did spend mucho bucks on myself, the bulk of the money was spent on others. My wives before and after divorces (a half of a half doesn't leave a whole hell of a lot). My four kids and the Ice Princess plus my second ex wife were my prime targets. The Ice Princess complained, sometimes bitterly that I spoiled the kids. But my cry was that I was not "schizo" and that I couldn't give her (#1 ex wife) everything she wanted (and she wanted plenty starting with being a born again clothes horse) and not do the same for the kids. How she adored and loved I Magnin's. I loved every spending minute of it. I was pretty much consumed with love and affection for kids and yes, even for the Ice Princess and wife #2.

I also pissed away a ton of money on people I hardly knew or even cared to know. One of my kids had a tennis shop. God only knows how many warm up suits and tennis rackets I bought for flight attendants that I saw just once and didn't care to see again. I was trying to support the tennis shop and most flight attendants became brain dead while on that job, so I seldom pursued them. I was a real money sump pump and just loved it. The seventeen years between marriages were also terrific for spending money. Would I do it all over again? For sure!! My disrespect for accumulating money never included lack of recognition of what money was doing for my beloved family, good and casual friends and yeah even a few enemies.

Redundantly, I have lived a long and rich life and, thank God, always on the edge.

The Great Depression/Private Equity Funds

More depression days stuff. Bear in mind that there was a resurgence in unemployment to 25% around 1936. But my genius immigrant father never seemed to miss a beat. He and my Mom were fabulous parents. We never really knew that there was a depression going on. And my needs were simple. They revolved around sports and avoiding bringing my report cards home (talk about a constant fear of impending doom). If they knew what ADD was in those days, I would still be in the third grade. I once told that to Donald Trump, about Donald Trump.

Between starting school early and skipping a grade, I graduated from high school at 16. All my friends were a few years older than me and a few years better athletically. Any street smart kid knew that if you brought the basketball, football, or baseball and bat you had to be chosen when they picked teams. My Pop understood that rule, so I always had the basketball etc., so I always got to play. Even in the worst of times my pop saw to it that I was guaranteed a slot on a team. When I showed up, all the other kids were fucked because I was the one with the ball. They had to let me play if they wanted to play at all.

Private Equity Investments
That shoe is about to fall a lot further than it has to date on further private equity fund holding valuations which will really raise hell with pension funds, endowments and foundations. I believe that the private equity funds have only begun to write down valuations of their investments which in turn will force the pension fund investors, endowments and foundations to further write down the value of their holdings in these funds, big and small. Harvard's attempt to sell their holdings in private equity funds in the secondary market at a 50% discount will, in my view, look optimistic and reaching for the stars…