Large man: "Who's that, then?"
Cart driver: "I dunno, must be a King."
Large man: "Why?"
Cart driver: "He hasn't got shit all over him."
— Monty Python and the Holy Grail
I'm still here, Dear Readers. Truly.
I have just been struggling a little with uncharacteristic tongue-tiedness in the face of the magnificently operatic Cluster Fuck of the Century we have all been witnessing for the last week or so; namely, the Bear Stearns Imbroglio.1
I mean, what can one say? It is magnificent, it is operatic, and it makes Hiroshima look like a damp squib in a Folgers coffee can.2
Depending on which source you listen to, JPMorgan's Jamie Dimon is either a reluctant pawn in Hank Paulson and Ben Bernanke's vengeful plot to ram a splintered stick up Jimmy Cayne's ass for DK-ing the Fed and Wall Street when Long-Term Capital blew up ten years ago, or he is a Machiavellian monster who is taking out his two-dollar broker's insecurities by buggering anyone in a three piece suit he can get his greasy little hands on.
Bear Stearns' shareholders, of course, are totally fucked. I do not know what the market rate for bareback anal is in this town, but Eliot Spitzer's recently publicized travails lead me to believe it is a lot more than $2.00 (or $10.00) per share. I am sure no-one, including me, feels sorry for billionaire Joe Lewis, but you do not need to be Bill Clinton to feel the pain of thousands of BSC support staff and administrative assistants in Staten Island, Brooklyn, and elsewhere who are gazing hopelessly at a smoking crater where their company stock retirement plan used to be.
The investment bankers and traders at Bear have been royally rogered, as well. No-one feels sorry for them, of course, especially the Lord of the Flies crowd clogging the comment pages of the New York Times DealBook and the WSJ Deal Journal. Although I suspect each and every one of those pseudo-socialists cackling merrily at the evaporation of billions of dollars of wealth from the personal balance sheets of BSC bankers would themselves be far more willing to chop their little peckers off with a rusty knife than suffer a similar percentage hit to their own financial position. Risk-averse pussies.
Some of the bankers and traders with marketable skills (or salacious photographs of Jamie Dimon and Jessica Bibliowicz) will land on their feet, either at JPMorgan or elsewhere. But Wall Street is contracting, so many will not. The ones who don't are probably gone for good, and face the prospect of limping off to a corporate development job at Pfizer with a permanently shrunken balance sheet, to boot. The ones who do survive, weakened but employed, will be an interesting test case of Martin Wolf's thesis that incentive clawback is the proper way to pay financial workers. ($170 to $10 per share is a helluva clawback.) I, for one, think these bankers will be even more motivated to rape and pillage the financial system in order to rebuild their ill-gotten gains as fast as possible. Plus, you can bet their wives and girlfriends will give them the Lysistrata treatment until they have enough coin to send Sweetcheeks back to the Metropolitan Museum Gala in this year's dress.
The professional commentators and kibitzers have already weighed in on What This All Means to life, the universe, and everything, so I will spare you my trite regurgitations on moral hazard, social justice, and the price of peas in Shenzhen. Suffice it to say that this was a political decision by the Treasury and the Fed to intervene, and we will all enjoy years of political theater as various demagogues dissect, revile, and second-guess decisions made in the heat of the moment two weekends ago. Already, Senators Baucus and Grassley are sharpening their pitchforks and dusting off their torches for a nice, public lynching of the Great and Powerful involved. I could offer worse advice to Ben Bernanke and Hank Paulson than for the former to shave his shit-eating beard and the latter to practice looking short and humble, for a change.
From the perspective of Monty Python's cart driver, no-one has come off looking like a King in this scenario.
1 Plus, I just returned from vacation, fer chrissakes. Which of you bozos is it who decides to push the Big Red Button every time I leave town for a little R&R? Sheesh.
2 Back off, Political Correctness Police. This is a Wall Street rag, written from the point of view of the capital markets and investment banking. You want fair and balanced, go read the Bhutan Daily News. In the meantime, you can kiss my salty edamame.
© 2008 The Epicurean Dealmaker. All rights reserved.