Where Were You When The World Didn’t End?
When the US House rejected the Wall Street bailout bill on September 29, 2008, I was hunched over in a swiveling, wooden bar stool with a Camel Turkish Gold burning between my right fore and middle fingers.
The vote was broadcast live on a dozen channels, but that wouldn't have mattered if Mikey and Becca didn't have cable. On that day, they did, but no thanks to them.
For most of the two years I knew the couple, their old Sony Trinitron sat on a particle board TV stand against the blank back
Nice write up. A day or two after the house vote I found myself on our NJ Transit platform, heading to the city. I was approached by our moron Neanderthal Republican Congressman, campaigning for re-election. He had, of course, voted against the bill. I told him in clear terms where he could put it. He got re-elected (lost in 2018), the world did not end. Fun times. I spent my banking career dealing with EM banking crises, but this was something different.
The day that bill failed, I found myself on NJT tipping forward the head of “Tall Boy” in the paper bag Wall St. floor trader who had passed out upright and was aspirating his own vomit. He did not seem to appreciate the gesture.
I was on a HF trading desk. Thinking for sure they would pass it and save the world. They didn’t. In the midst of the greatest test they failed due to politics. One can argue if it was this moment when the hollowing of the middle class (and the HF industry) really took hold. But neither has really recovered. Extraordinary policy responses have done some damage control but have planted the seeds for a much larger, more destructive seismic event which will make 08 look innocuous. Ben Bernanke put the country and the world at the brink by fighting phantom transitory inflation (remember oil at $125, nat gas $10 driven somewhat by HFs with no fear that excess returns might bring new technology/investment – shale, etc), ignoring weapons of financial destruction (CDS), ignoring mark to market accounting based on flimsy “markets”, underestimating the impact of a $450Bn sub-prime market, not supervising the banks properly, not responding forcefully enough when it became obvious there was a pandemic, etc.
People (including many knowledgable Wall Street folks) have no idea how close we came to the system completely failing. Maybe it is for the best.
But the last nearly 12 years have only increased the probability of the next crisis being “the big one”. When it will happen and where it will start I am unsure, but I believe the levers to contain it are fewer and the economic base to support the response is fractured. Combine that with an even more dysfunctional political environment and a public that honestly is clueless with trust in institutions severely impaired I am unsure that final stick save will be enough.
I hope I am wrong but I fear that the next crisis may be the one that is unsolvable. MMT is not going to save the day. Printing to solve a debt problem (and an education, productivity, demographic, investment problem) is like heroin to solve a crack problem.
This country doesn’t address the causes for our stagnation and future economic meltdown, we just obfuscate, deny, ignore. Until we address the core problems we will not get off the train to The End.
HR keep educating your readers. Maybe they will come to a different conclusion than I gave. But making sure they are informed and thinking and developing a sound investment portfolio is a great service to help people make the best and most informed decisions.
I said at that juncture ………….next time around you can run but you can’t hide…….I agree with your eloquent response here and the reasoning and rational you state….
Felt like I was reading a novel. Great descriptive details.
Great writing. I know it must get tedious with the volume you crank out but adding the personal anecdotes always make it more entertaining.
H-Man, hands down, one of the best pieces you have written.
God i love these stories
Thanks for the insight Mr. H. Glad I discovered you from Seeking Alpha. Your writing style and experience could easily keep peoples interest for a couple hundred pages.
Worth a 2nd and 3rd read, as your piece from a day or two that still has an expanding and amazing comment thread going … happy new year, everyone…!
Yes, what a memorable piece. When the commenter on another article brought it up, I remembered it instantly. It deserves its own T-shirt.