Wall Street Got Drunk!
I'm not sure this really explains what happened.
Any night I've been out in the city -- last night was Porter House, and Monday was Kellari Taverna -- Wall Street appeared to be enjoying a hearty supper and a glass of wine, but I didn't see any evidence of drunken behavior.
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Of course, if your entire world view is predicated on the belief that tax cuts cure all ills, and that any sort of regulatory supervision -- even of FDIC insured banks by the Federal Reserve -- is an evil to be avoided, well, then, it might look like drunkenness to you.
To everyone else, it merely looks like an incompetent administration executing an ill thought out philosophy, and poorly at that.
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Related:
Bush Seen as Jinx as Republican Candidates Avoid Party `Brand'
Bloomberg, July 23 2008
http://www.bloomberg.com/apps/news?pid=20601070&sid=a1QaUnot5FTs&
Wednesday, July 23, 2008 | 08:30 AM | Permalink
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That's probably the most accurate comment that W has made during the past 7 years.
Posted by: dan | Jul 23, 2008 8:40:52 AM
I suspect lobbyists doling out cash had a BIG influence on government behavior. Or were the lobbyists wheeling around the keg?
Posted by: Chief Tomahawk | Jul 23, 2008 8:41:41 AM
In vino, veritas.
Posted by: franjime | Jul 23, 2008 8:43:13 AM
I guess whoever took the video is through being a political reporter in the US....
Posted by: uncool | Jul 23, 2008 8:52:05 AM
I think he's projecting his own old behavior onto Wall Street. Although. in that case, he should also have said that Wall Street went on a coke binge.
Posted by: Mike in NOLa | Jul 23, 2008 8:58:04 AM
Wall street got drunk and has a hangover... So I guess policy makers now want to introduce it to coke and meth to cure the hangover?
HCF
Posted by: HCF | Jul 23, 2008 9:00:17 AM
Frankly, I think the President was being generous. "Strung out on crack cocaine" may have been a more accurate statement.
And Barry, though I agree with your assessment that this administration is incompetent, I am highly skeptical that the Federal government would have been able to legislate or regulate away this debacle. Almost certainly, a better regulatory architecture would have mitigated the effects on the margin, but I have yet to see a government able to successfully regulate excessive greed and fear. Well, at least in the non-Communist world where they don't shoot speculators. Plus, the genesis of this debacle began well before anyone had heard of Bush, and its biggest enabler was busy signing multi-million dollar book advances and basking in the radiant glow of a pandering press and Wall Street.
T.
Posted by: Toro | Jul 23, 2008 9:02:27 AM
CalculatedRisk has a post up this AM about soaring mortgage rates and declining mortgage apps. I hadn't been paying attention to rates, but when I saw that jumbos are averaging 7.85% it was like a bucket of ice water thrown on me.
The housing market decline looks to be accelerating.
Posted by: E | Jul 23, 2008 9:12:44 AM
The instant Paulson proposed backing FRE/FNM, 10-yr bond and mortgage rates shot up, and have not stopped climbing. This is not a coincidence.
The drunkenness is the "ivory tower" belief of Paulson and Bernanke that this (rate increase due to their stupidity) would never happen.
These two need to be replaced yesterday. Of course they won't, because they personify the ultimate Republican agenda -- give American taxpayer money to the wealthy.
Posted by: Unsympathetic | Jul 23, 2008 9:13:44 AM
For what it's worth, even though I have switched political parties and try to bash John McCain every time I can on my blog ( http://cnbcsucks.wordpress.com ), I have never said or written anything bad about the President, as unpopular as he is in certain circles. It is refreshing to see him speak candidly. I personally am with Toro on Wall Street's habit being not alcohol but crack cocaine. And judging by how Wachovia's market cap went up yesterday by $8B on the same day it announced a $9B 2Q loss, there is an appetite out there by some people to swallow anything they can get their hands on.
Posted by: CNBC Sucks | Jul 23, 2008 9:18:05 AM
I guess instead of sleeping and drinking water, we are just going to use the tail of the dog to cure the hung over
Posted by: costa | Jul 23, 2008 9:30:52 AM
President Bush said the other day in Houston that Wallstreet got drunk
read it here:
http://www.chron.com/disp/story.mpl/front/5901860.html
Posted by: SJac | Jul 23, 2008 9:33:51 AM
Drunk?
Bush would know.
Posted by: Tony | Jul 23, 2008 9:44:14 AM
Dow hit brick wall at 11635, right about where I called it. Major problem for bulls just arose...put/call is printing .62!!! That is unsustainable...that is multi-year low levels...dangerous reckless bullishness in such a crisis environment. Few are protecting themselves.
Posted by: Steve Barry | Jul 23, 2008 9:44:27 AM
has anyone tried shorting the stocks on the "restricted list" and been denied?
Just curious because I am able to place orders to short all fo them..
Posted by: Vermont Trader | Jul 23, 2008 9:53:20 AM
Is it Wall Street, or Main Street, that has to deal with the hangover? I would think both, unfortunately.
Posted by: Boom2Bust.com | Jul 23, 2008 9:54:58 AM
Toro:
Has the answer. It was all Clinton's fault.
"Plus, the genesis of this debacle began well before anyone had heard of Bush etc etc."
We sit in the ruins of seven years of totally incompetent fiscal, regulatory and monetary management and we get a bit of excuse making saying no one could have dealt with this problem but apparently it was all the fault of the president who left office eight years ago, presided over one of the greatest economic expansions in history(he had some luck but created some too), created about 22 million jobs, and left with a budget surplus.
Get real buddy, you're letting your Clinton hate show.
Posted by: John | Jul 23, 2008 10:10:40 AM
WB still going up and up . I guess some have an all nighter .
Posted by: Pete | Jul 23, 2008 10:13:58 AM
Like the drunk (or cokehead), it's a case of the drunks (emerging from a very big bar located at the corner of Wall and Broad) wrecking their sports/luxury car, and miraculously walking away.
While the family of four (Main Street) in the minivan gets helicoptered to the nearest trauma center for emergency surgery to save them, followed by months, if not years of reconstructive surgery.
Granted, some of the people in the minivan weren't so good at keeping their seatbelts on, but still...
Posted by: Jason | Jul 23, 2008 10:14:39 AM
Yeah, and the regulators didn't take their keys. You know what happened next.
Posted by: Stockholders Against Drunk Driving | Jul 23, 2008 10:21:17 AM
The line Bush missed saying was:
"And they got drunk on the low rates my administration kept serving 'em. Heh, those fellas just can't handle the good stuff, yah know?"
Posted by: wnsrfr | Jul 23, 2008 10:21:35 AM
There have been quite a few books written, can't name a title sorry, whose thesis is that the increasing complexity of financial engineering and globalisation have together essentially put corporations beyond the reach of the nation state. I'm not sure I buy this theory entirely as the EU, Russia and China show signs of still being able to take a bite out of the odd hide but it seems fairly clear the regulation of financial institutions in the US has proved completely beyond the capacity of the govt. It's hard to tell to what extent this was politics, quite a lot I suspect, or the simple fact the banks etc employ smarter people and make it worth their while to skirt the law. For example the investment banking arms of big banks, hedge funds, private equity are structuring enormouly complex deals every day and employ armies of lawyers to ensure they legal...just. In some cases of over enthusiasm they even drift over the line. Quite honestly I'm not sure the lumbering elephant of govt is ever going to be able to keep up with these guys and this is doubly so when the political will does not exist.
Posted by: John | Jul 23, 2008 10:36:15 AM
Wall Street is really drunk right now and about to stagger into oncoming traffic.
Posted by: Steve Barry | Jul 23, 2008 10:44:35 AM
Margaret Brennan at 11 AM EST says market is just nearing new highs...I see it down about 60 from new highs and plummeting...have I lost my marbles? maybe I'm drunk.
Posted by: Steve Barry | Jul 23, 2008 11:01:58 AM
Steve, i agree.
We are at a very interesting junction here.
All the crap rallied last week while the companies that are still OK on fundamentals have been taken to the woodshed behind the scenes.
The economy is getting WORSE.
In my opinion the pundits should be watching the action in the energy and tech sectors not focusing on the financials short squeeze.
Posted by: Vermont Trader | Jul 23, 2008 11:09:00 AM
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