History was unmade this weekend in New York City: In the Bronx, the closing of the House That Ruth Built, and in lower Manhattan, the closing of the houses that ruthlessness built.
A double dose of tears for those Wall Street investment bankers in their skyboxes at Yankee Stadium.
A double dose of publicly subsidized bailouts for both the Yankees and the investment banks.
But first . . .
NO PARTICULAR ORDER:
MarketWatch: ‘End of capitalism as we know it’
Telegraph (U.K.): ‘Islamabad hotel blast ‘was Pakistan’s 9/11’
N.Y. Post: ‘COPS: JEW GUYS NEED TO TALK!’
The Register (U.K.): ‘Sockpuppeting civil servant Wikifiddles himself’
McClatchy: ‘Congress’ fiscal conservatives declare free market “dead” ‘
Jurist: ‘Former Special Forces officer wins transgender discrimination lawsuit’
Financial Times (U.K.): ‘Taxpayers shoulder trillion-dollar deficit’
N.Y. Times: ‘Foreign Banks Hope Bailout Will Be Global’
Wall Street Journal: ‘Goldman, Morgan Scrap Wall Street Model, Become Banks in Bid to Ride Out Crisis’
Financial Times (U.K.): ‘Obama Targets Wall Street Greed’
Running down the press:
The closing of Yankee Stadium prompted a bevy of retired baseball players to hitch up their belts over their big bellies and weigh in, but the best quote in the past few days came from former Detroit Tigers pitcher Jim Bunning:
McClatchy’s James Rosen, in his Friday story “Congress’ fiscal conservatives declare free market ‘dead,’ ” called that offering from the flame-throwing right-hander-turned-right-winger-Kentucky-senator a “knockdown pitch.”
And that was before the monumental news over the weekend that Wall Street’s investment bankers committed harakiri.
How did the press cover the news that Goldman sacks itself?
Sufferin’ seppuku! Pretty darn well! And with surprisingly large doses of reality, like this piece from the Financial Times (U.K.): “Taxpayers shoulder trillion-dollar deficit.” And this one from the Washington Post: “A Sense of Resentment Amid the ‘For Sale’ Signs.”
If Barack Obama weren’t black, he’d now be a shoo-in. After all, John McCain had pushed the GOP’s scheme (hare-brained even before Wall Street’s meltdown) to privatize Social Security. And the GOP (McCain included) has always preached deregulation. See this Wall Street Journal story for details: “Crisis Draws Attention to McCain Social Security Plan.” And then look at this one from the Financial Times (U.K.): “Obama targets Wall Street greed.”
If we had a parliamentary democracy, McCain and Obama would be duking it out on the floor of Congress, and not only would the fur fly but there would actually be meat on the killing floor. Instead, we’ll have to put up with the lame-ass, tame-ass TV “debates” moderated, massaged, and manipulated by the mainstream media. But the first debate, Friday, ought to be more interesting in light of Wall Street’s collapse.
In any case, New York’s days as the world’s financial capital may be numbered, but ruthlessness hasn’t disappeared. Wall Street’s self-destruction heralds the true end of U.S. domination of the financial world. That’s probably true, but the private-equity folks who control billions of dollars will find other ways to pick at our carcasses.
Last week at least, the private-equity types were licking their chops. In Friday’s edition of Private Equity Online, a handmaiden to the vultures smugly wrote:
‘Cleaning up the carnage’
Buyout titans have said publicly the situation is unlike anything they’ve ever seen. However, there’s also a certain amount of calm present in the private equity industry, where nerves are less frazzled than in other corners of the financial world.
This is to do largely, of course, with private equity’s core principle: long-term investment horizons are less susceptible to public market volatility and periods of short-term distress.
But it’s also to do with the opportunities available to cash-flush firms, considering the more than $60 billion (€42 billion) in pure private equity assets that are now in play as a result of the meltdown.
“Core principle,” my dying ass. Drool and slobber are their principles. The newsletter’s anonymous author gets down to it:
The collapse of Lehman Brothers makes the sale (or spin-out) of all or parts of its investment management division even more imminent. The sale of Merrill Lynch to Bank of America has suddenly put a question mark over its private equity division. And AIG’s new US government owner could indeed decide to unwind the firm’s sizable alternative platform, which is sure to include attractive assets despite the prospect of cumbersome government-run auctions.
Secondaries firms are already rubbing their hands in anticipation – one secondaries specialist told PEO his recent meetings in New York made him feel like “a kid in a candy shop”. And many big buyout shops are reportedly interested in buying the franchises outright.
Some of the private-equity scumbags (my word, not theirs) have already started infiltrating the “normal world” — at the request (insert shudder here) of Hank Paulson‘s rescue team:
David Zweiner, who joined The Carlyle Group little over a year ago to co-head its nascent financial services group, was selected last week as chief financial officer for struggling US bank Wachovia.
This week, the US government asked Clayton Dubilier & Rice operating partner Edward Liddy to take the helm at AIG. It also selected American Capital director John Koskinen for the board chairman role at troubled mortgage giant Freddie Mac, after having earlier in the month asked Carlyle senior advisor David Moffett to become chief executive.
And who knows where the lobbying for further corporate welfare will lead? Check out this morning’s Times harbinger, “Big Financiers Start Lobbying for Wider Aid”:
Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.
Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.
At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.
Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions.
So don’t start singing “The Internationale” just yet.
If you can find it, you can even hum along to Tuli Kupferberg‘s “The New Internationale,” which encourages we “prisoners of stagnation” to arise.