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What is a merchant bank? Well there's the theoretical manner

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in which the merchant bank came to the party and that was largely by providing [merchant bank partying in a disco club]

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payment options escrow currency hedges and other means of spraying wd-40 on the [merchant bank holding escrow papers]

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international tracts when American corporations did business with merchants [WD40 sprayed on train tracks]

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from other countries well the basic idea then was that a merchant bank lived and [foreign merchants shaking hands]

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breathed the banking international transaction universe and knew every [banks play pong across world map]

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trick in the book when dealing with shady countries who had hoped that they

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could get some gullible American corporation to ship them twenty five

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thousand yellow and orange rubber duckies with the squeaky sound thingies [rubber duckies getting squeezed in the tub]

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yeah and then somehow abscond without paying well the duck seller was schooled

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in molding rubber they were not schooled in international financial transactions

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so back then it made perfect sense for the duck maker to hire the merchant bank [merchant bank enters screen with duck maker]

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to deal with international escrow complexities far beyond their core skill

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and the way they hired them is basically the merchant bank would discount the

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bill that was owed to them and pay that money in cash in American u.s. dollars [money changing hands]

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to that American corporation and the bank would then be responsible for [bank choking international seller]

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collecting the full price and that spread between the full bill and what

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they paid the American company was how they made money well in the process of

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being deep in both the strategic operations of companies in the US and in

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understanding how the global marketplace for Commerce work merchant banks evolved

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into more or less one flavor or another of an investment bank helping clients [merchant bank bulding turns into investment bank]

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sell debt and equity and other money raising devices so that they could

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continue selling ducks or rakes or tractors or lawn flamingo's yeah those [rubber duckies floating by]

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are cute in the modern incarnation of merchant banks while many are actually [merchant bank throws bags of money to businessman]

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able to not just advise but invest in the companies to whom they are close all

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kinds of other complexities live in the border-to-border transactions and [merchant bank sends money to Mexico]

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because the personal relationships of the merchant bankers themselves ended up

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getting so close to the management into the government's they do [group of government officials]

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with into the competitive marketplaces well each of which carried enormous

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friction and merchant banks and the bankers who run them have found

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themselves in the middle of all kinds of commercial transactions yeah very

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lucrative business today people if you want to whine about taxes go into this

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one so today merchant banking is really more

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like just banking with fewer regulations and a whole lot more upside when they're

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right and of course the most successful merchant banks are the ones that you

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know offer merch [merchant bank wearing merch clothes]

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