The party’s over, it’s time to call it a day.
They’ve burst your pretty balloon and taken
the moon away.
It’s time to wind up the masquerade.
Just make your mind up, the piper must be
paid.
The party’s over, the candles flicker and dim.
You danced and dreamed through the night,
It seemed right just being with him.
Now you must wake up, all dreams must end.
Take off your make up, the party’s over,
It’s all over, my friend.
Gstaad
The first time I heard this was back in 1956, and I was not yet 20, and it was at Merion Cricket Club, in Philadelphia, the first grass court tournament in America after Wimbledon. My host — players used to stay with club members in those innocent times — was a very good-looking tall gent and he was singing it drunkenly to his girlfriend, until his wife came down and there was a scene. (It was a big house in Philly’s chic quarter and my host had thought his wife to be asleep.) Later that year I saw The Bells are Ringing, the Broadway musical from which the song derives, and somehow, like many other tunes one hears at age 20, it has remained in my mind and in my psyche.
Actually, in today’s climate, you couldn’t make it up. It’s the perfect song for the Wall Street mess and then some. You’d think Betty Comden and Adolph Green, the wordsmiths, had the suckers in mind when they wrote it 52 years ago. ‘They’ve burst your pretty balloon and taken the moon away. It’s time to wind up the masquerade… The party’s over…’ The trouble is the party’s not over, at least not for the pigs who are responsible for the mess. In fact it’s just beginning. There are tremendous opportunities to be had for those with ready cash, and no one has more cash than those nice guys who used other people’s money to amplify their profits and got out with golden parachutes before the you-know-what hit the fan.
Personally, I have always operated by instinct when it comes to finance. It was instinct that made me invest with Charles Fix after my father died. The Fix Family Fund served its investors well for close to 20 years; 20 per cent per annum. In June 2007 I began feeling creepy about the markets. Too many nightclub characters dropping names of hot hedge funds and all that. I rang up Fix and told him I wanted out. He agreed. But I waited awhile, and only got out in October, which meant March of this year. I had taken big losses but, still, I consider myself very lucky. What is interesting is that last spring I shopped around New York for hedge funds to replace Fix. It was like being in the Führer’s bunker with Hitler posting phantom divisions on his maps in order to defend the Fatherland. The hedgies were all young, very tightly wound, looking non-stop at screens while promising to make me richer than Croesus in no time. I stayed away. The investments they were hawking around were less real than Hitler’s divisions, and my s*** detector, as Papa Hemingway called it, was ringing non-stop. The bells are ringing all right, but for most people it’s much too late. Take Richard Fuld Jr., the simian head of Lehman Brothers. One year ago, as the credit crisis first gripped Wall Street, the ape concluded that the crisis was going to be short lived and it was time to really get rich. So he doubled down on mortgage-backed derivatives, enough to drive the firm to bankruptcy. With one difference. Fuld took in $500 million in the 12 years he headed the firm, with a large salary, private limos and private jets, as added inducements.
Now what everyone likes to know is why a petty criminal — or a major one at that — has to cough up his ill-gotten gains to the government once caught (the Rico Law), whereas the Schwarzmans, Kravises, and Fulds of this world do not. What I’d like to know is why Conrad Black is in jail for posting an all-time high for his company, and the present bunch are taking a break in the Hamptons rather than in the penitentiary. I suppose it’s called justice, the same as it was called back in Moscow during the show trials.
What I find amusing about the press is how it’s bending over backwards not to sound schadenfreudish, but as always it has it the wrong way round. The ones who are responsible are not the ones losing their houses or their yachts, and certainly not their G-5s. Just try to buy a house in London that costs more than 10 to 20 million. There ain’t any for sale. And it’s not because the miscreants are lucky. The system is bent and it remains bent. When Fuld went to see the Koreans just before the fall, the Koreans were interested. But he played tough, probably having seen too many westerns starring Burt Lancaster, and the Koreans told Fuld to take a hike. He wanted to make a killing rather than save the company. It’s as if Rundstedt and Manteuffel had left the western front and surrendered to the Soviets.
Here’s the great economist Taki on the future: the US will sooner rather than later go begging for capital from China and the Middle East. Which means many great American institutions will be serving Chinese and pilaf baldi in their boardrooms by next year. The man most responsible for the mess, Alan Greenspan, will publish a book, which will be a bestseller, on marital bliss (he is married to an NBC reporter) and never mention the fact that it was he, the worst Fed chief ever, who did away with regulation, promoted wild leverage and provided easier money than stolen notes, which all contributed to the crisis. And Schwarzman and Kravis will shrink by an inch.
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