Grim days for capitalism as winds of change sweep Wall Street

In case you missed this- Tom Wolfe did a piece on hedgies for the issue of Portfolio, which debuted April 2007. Here is a kind of update. [International Herald Tribune]

“Of course, Wolfe’s 1980s Wall Street – of privileged WASPs (and Jewish Anglophiles), the sons of Harvard and Stanford and Princeton braying for money on the bond market – is pretty much gone now. It was replaced, in part, by the world of private equity and hedge funds, by bankers who think proprietary trading is more important than servicing clients.

“And now that world is crumbling, too.”

Interesting to consider those old warhorses Wilbur Ross, Carl Icahn, Kirk Krikorian, Boone Pickens as knife catchers; that BSC is no more; IMB is in a coma (closed @ 1.23 today); MBIA and ABK are on life support; Blackstone‘s ego resembles a big, flat tire; WaMu, Citi, Lehman, are all overexposed to deriviatives that have declined in value significantly (“pennies on the dollar”); it was rumored today a hedgie might have blown up after a bunch of gold was dumped on the market- enough to lower the price; housing sales continue to decline to the tune of double digits, inventory is still growing- and this is the high season; DOW Chemical has raised prices 50% (Dupont will no doubt follow); counterparty risk is making the knees of bean counters knock louder and louder every day; oil; airlines; Iowa; auto sales; food; stagflation; and of course the ongoing contraction of credit; is there anything I missed?

The lemon is out of juice.

Actually, this is all part of the market cycle- the rumors of the death of capitalism are exaggerated. We just had the longest bull market ever- it began in the 80’s, and we’ve only witnessed a few brief recessions/corrections. We just happened to get stuck with the check now. And our wallet is missing…

“The only thing Ben Bukkake has got left to inflate is the dollar.” -Paco Bell

Some other interesting new finds:

I’m going out to the store for more popcorn. Man this is a looooong movie!

“It sounds like even the firms that aren’t in trouble are in trouble.” -Tom Wolfe


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