An investment bank's problems rarely prompt an outpouring of joy. But since Brazilian leader Garantia ran into troubles, triggered by last year's Asian crisis, competitors, ex-employees and even regulators and journalists have been out celebrating. They see Garantia's fall as a punishment for past arrogance and high risk taking.
A group of Sao Paulo traders were the most brazen in their Schadenfreude. They posted "for sale" signs on the cars of their opposite numbers at Garantia, just after it took a staggering hit in the Brazilian Brady bond market last October. Their actions were also prophetic - six months later Garantia is on the block.
After a period of denial, Garantia partners now admit they have held talks about a deal with several overseas banks, including Goldman Sachs. But with Goldman involved in its own debate on whether to go public, this prospect now appears less likely. A trip to Europe by Garantia founder and major shareholder Jorge Paulo Lemann late last month fuelled speculation that Credit Suisse First Boston is the frontrunner.
Lemann, a 59-year-old former tennis champion, who built the banking partnership from scratch (see box), is believed to want to sell the bank and concentrate on his other investments.