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The masters of the universe have turned to drink

Venetia Thompson

Wednesday, 1st October 2008

The failure of the $700 billion bail-out has driven her former City-boy chums to despair, says Venetia Thompson. But they must rally soon to keep the market moving

It’s possible to get a reservation again at Scott’s. The City boys have well and truly left the building, and can now be found drowning their sorrows elsewhere, in dark corners of the West End and Chelsea, as far away from the prying eyes of the City as possible. ‘“Reduce your risk. Sell. Get flat.” But all I could think about was the school fees and the new kitchen, and how there’s just no recovering from this.’ I was looking into the pained eyes of a former master of the universe, who had until recently stared the credit crunch in the face and laughed. He was now on his sixth (house) whisky and mumbling incoherently about getting buried by Wachovia earlier that day. As he staggered off down the Kings Road, his departing words were simply ‘stupid Yanks’.

Stupidity aside, we have at least learnt this week that it is unwise to ask US Congressmen and women to vote on anything significant, or look at the wider implications of their decisions five weeks before they face re-election. They will be thinking of one thing and one thing only: what is popular with the voters. The Bush administration’s $700 billion rescue package to save Wall Street was unsurprisingly deemed unpopular last Monday among both conservative Republicans and liberal Democrats within the House of Representatives, who were far too concerned with trying to keep their jobs to worry about an ensuing global economic crisis or heed the incumbent President’s warning, in an unprecedented moment of lucidity, that ‘if money isn’t loosened up, this sucker could go down’.

Nancy Pelosi, the Speaker of the House of Representatives, even left the vote open in a last desperate effort to convince 12 ‘no’ voters to change their minds and pass the legislation. Alas, as the Dow Jones plummeted 500 points, apparently only two Congressmen could be located (the others must have disappeared into a black hole) and nothing could be done to stop the Dow finally tumbling 7 per cent — the biggest drop in its 102-year history, or the S&P 500 falling 8.8 per cent — its worst day since 1987, not to mention the knock-on effects around the world which we are only just beginning to see, despite momentary rallies over the last couple of days. Let’s hope that the taxpaying voters that the House was so keen to appease are at least happy, even if the City’s traders are crying into their drinks.

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David Short

October 2nd, 2008 12:45pm

If this dependably thick writer, who has thick, drunken men friends who work or have worked in the financial world, is for the bail-out, we who are against it can feel considerably more confident in our implacable opposition to socialism for the well-off.

And, by the way, caring what your voters think is called democracy.

Alexander

October 2nd, 2008 5:28pm

the bailout was just that -- it was giving very corporations enormous amounts of money for worthless securities. It should *not* be passed.

However, since there are real systemic risks, there should be government intervention. Institutions which are no longer viable, but are too big to fail (because allowing them to fail would bring down big chunks of the economy) should have their shareholders (and probably bondholders) wipped out, their senior executives sacked, and then given sufficient governmental bridge loans to make it through the credit crunch in exchange for massive equity stakes. When they get out the other side, the government will be able to sell those stakes, making the taxpayers, if not whole, at least less deep in the hole.

Under no circumstances should losses be socialized when profits are privatized.

Regina Filangi

October 3rd, 2008 9:37pm

Mr Short, I do so look forward to reading your red-faced outpourings. I think we should meet.

Hayward Maberley

October 6th, 2008 3:57am

Mr Short,
We have met on one of Melanie Phillips Rants, they can hardly be called pieces of journalism. They are not even good pieces of polemical writing.
Apropos stupidity, aka thick as in this piece of thick fluff to coin an oxymoron, Harlan Ellison has a wonderful aphorism.
"The two most common elements in the universe are Hydrogen and Stupidity.”
I offer an hypothesis that ther is now a third element, Cupidity.
And judging by what is happening in this part of the Milky Way, in the Orion Arm , the St and Cy concentrations have increased exponentially!

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