"Yes, We Can!" I Second the Motion...

Dawn arrived in America last night at 11:00 P.M. Eastern Standard Time, when 

Senator Barack Obama became the President-elect of the United States of America.  In that instant,  the candidate captured 284 electoral votes, 14 more than the requisite 270 required to elect him the nation's 44th President. Before the night was over, the President-elect would have a landslide of at least 349 electoral votes in his column, confirming the tsunami of support this man of the people enjoyed throughout the preceding two-years, and particularly, during the closing weeks of the presidential campaign.

As word of the Obama victory spread, so did exhilaration, spontaneous celebrations erupting in the streets of the Nation's Capital, akin to a post-Superbowl street party.  Most notable was the gathering of several hundred in Lafayette Park, directly across from the White House, under the very nose of not-a-minute-too-soon lame-duck President George Bush. Television perused the elated and often tearful faces of the President-elect's half-million plus supporters in Illinois' Grant Park, where the next  President had come to acknowledge his victory.  Joyful throngs in New York City's Times Square celebrated in the November night, reminiscent of New Year's Eve, minus the confetti.  

The faces of the Obama girls, Malia and Sasha, wore the rapture of Christmas morning as, together with their mother, Michelle, they joined their father on stage.  Undoubtedly, they barely slept when the celebration was over, but when the sandman finally prevailed, he probably came, not with visions of sugarplums dancing in their heads, but with dreams of the new puppy promised them by their parents, and confirmed by their Daddy just minutes into his first address as President-elect.  There's a certain comfort to be had in having at the helm of the most powerful nation on the planet a man so grounded that he sought, even in first blush of historic victory, to reassure his daughters of a promise remembered.  

President-elect Obama has repeatedly said that the genius of America is its capacity to change, to reinvent itself.  Obama's very election is testimony to that fact.  In raising Obama up to lead the American people, we ourselves are changed, and in the process of metamorphosis, have created a new paradigm, the ongoing success of which will require our faithful diligence.  The next President's mantra, "Yes, we can" is a mantle that rests gently on the shoulder we will indubitably be called upon to put to the wheel.  That this will require sacrifice, stamina and stick-to-it-ive-ness should not discourage us...After all, we already know we're up to the task. 

 

We can do it.  Yes, we can.

Two Chili Dogs And A Side Of Bank...

Throughout history, Switzerland has enjoyed a reputation for (1) Fine Chocolates, (2) Artisan Cheeses, (3) Julie Andrews' Alps and (4) Absolute Banking Confidentiality. For many years I was fortunate to pass some time there, indulging my taste for Teuscher truffles and Mont d'Or cheese, working off their effects while pursuing a passion for down-hill skiing in Gstaad. Sometimes I actually found time to do business behind the unlettered doors of Geneva's private banks.

If memory serves me correctly, a long-standing joke about Swiss bankers went like this...One spring day a banker spies a man in a threadbare suit groveling on all fours in Geneva's splendid Park des Eaux-Vives, eating the sweet green grass sprouting beneath him. Drawing near, the banker recognizes the man as one of his biggest investment clients. "Well, Messr. Charlot," the banker begrudgingly admits, "I suppose, under the circumstances, we could let you dip into principal!" The tale, oft-repeated by the very bankers at whose expense the joke was told, was thought LOL hilarious, given its proximity to the truth. Neither did it diminish the appetites of the maniacal guardians of the banks' purse-strings, who dined -at their clients' expense - on pate de foie gras and Dover sole over lunch at the fashionable Park's restaurant of the same name.

If only banks of all stripes had been somewhat circumspect in their dealings of late...

For all the wrong reasons, all sorts of banks have been very much in the news recently - Commercial Banks, Investment Banks, Community Banks, European Banks, U.K. Banks, Asian Banks, Central Banks - and the list goes on. It was not so long ago that banks were not places of interest to most people - save for when one needed one - and then of course, as the old saw went - one could only get a loan if you didn't need one.

All that changed in the mid-80's, when banks looked across the street and decided that the grass was greener on the other side. Suddenly, it wasn't enough for Commercial Banks to offer the boring, but safe vanilla services: making mortgages and loans; providing checking and savings accounts; offering certificates of deposit or commercial paper, et al.

These staid institutions, often built of stone to impress the public with the gravitas of their existence, woke up one day and decided they needed to be - sexy - like their Investment Banking cousins. That way, they argued, their profit margins would benefit from economies of scale and provide improved customer service. No longer would a customer have to walk across the street to make an investment transaction. Everybody would benefit by vertical integration - blurring the lines with one-stop shopping. And, oh by the way, the commercial banks would need government deregulation to accomplish this, to make it an even playing field with the investment banks, which largely had hoodwinked the Securities & Exchange Commission (SEC) that their, the economy's, and the nation's interests being identical, all would be best served through self-regulation. Soon they, too, would be able to sell stocks, bonds, mutual funds, money market funds, et al. with minimal interference and oversight. The foxes were effectively in charge of the hen house.

One more thing, all banks could now play the Wall Street equivalent of Grand Theft Auto through derivatives and what ultimately became the two-bit buzz-word of the boom (and bust). Credit-swaps. Can you say "Par -tay?"

If all this leaves your head spinning, it should: a mind no less brilliant than the castle's own Ben Bernanke, was clueless that the barbarians were at the gate, much less inside its walls...until Wall and Broad began running blood.

How differently we once looked at the impenetrable oracles of Wall Street. Just a few decades ago, I was a young fire-in-the-belly stockbroker with E.F. Hutton & Co., Inc. Within a few years of my joining the firm, John Latshaw, whose Kansas City, Mo. firm, Latshaw & Co. had been previously acquired by Hutton, was appointed the Region's VP. John was an imposing, elegant man whose exact altitude escapes me now, but at the time, I was in awe of the gentleman who traveled with his own bed-extender, since most hotel beds could not accommodate his John Wayne-like stature. Unlike some of Hutton's Big Apple hierarchy. "Big John," as he was (secretly) called, always came calling with words of encouragement, even when the Boardroom was littered with bodies.

A generous man, John always shared his market savvy; he loved banks, and thought everyone should own one. That was one of the man's charms: he would readily share with you what had worked for him, in the belief that it would also work for you. John said that any time you could buy a bank for less than its book value, jump on it. Subsequently, my Rolodex (the Stone-Age predecessor to BlackBerry) contained the names of happy clients who literally could laugh all the way to the bank.

Of course, that was then. In the past decade, as banks became enfants terribles of financial opacity, investing in them took on a whole new meaning, mostly mumbo-jumbo, the results of which are currently being declaimed in every corner of the globe.

On another of his visits, John rolled out the Latshaw philosophy of entertaining - Martha Stewart not having yet ascended to being the doyenne of that medium. I particularly remember John advising his guys (and this gal) always to offer guests the very best you could afford. People - clients, prospects, friends - everybody should be treated "special," John said. Elaborating, John remarked, that in those difficult times (The DJIA either only moved sideways or sank, when it moved at all.) if hot dogs were all you could afford to serve, then make them the best damn hot dogs money could buy!

Not surprisingly, I have acquired a repertoire of frankfurter brands and knowledge of the best hot dogs served across the country. As it turns out, given the current vicissitudes of the economy and the whipsawing arrhythmia of the market, this information is perfectly timed. Now is an excellent opportunity to take a bite out of one's favorite "dawg," be it Ball Park or an organic tofu faux frank.

Back to John's "Everyone should own a bank theory." Thanks to the Federal Reserve's insistence that at least 9 banks will receive an infusion of cash by the government, whether welcome, needed, or not, all of us now will, as tax-payers, become de-facto partial, if only temporary, "owners" of said banks without spending a dime. Bank of America, Citicorp, Wells Fargo, JP Morgan Chase, Bank Of New York Mellon, are among the banks selected to receive a core infusion. Any other time, owning any of the aforementioned would be the stuff of dreams. Today we have to hope they don't become a nightmare.

It's not quite the scenario Big John had in mind when he made his recommendations so many years ago, but one has to move with the times. As for me, in this new, tighten-the-belt world we're going to be inhabiting, whether I'm dining out, or entertaining chez moi, I'll make mine
two chili-dogs, scorched, with a side of bank -er, beans.

What's in a Name?

The unyielding torturous roller-coaster of Wall Street continues to wreak havoc on the paper fortunes of the elite and hoi-polloi alike as the world becomes acclimated to seeing those fortunes fall to pieces. No one knows what kind of a monetary system we'll be left with when the dust settles; a bigger problem is that the dust may not settle for 15- 18 months or longer, since the once-invincible American consumer is now about to be "down on his uppers," and is in no mood/position to bail out a sinking ship - again. It's all over save for rearranging the deck chairs...

The question remains, what will our economic system be called in the wake of its virtual destruction and rebirth? "Capitalism" scarcely seems accurate when our banks are partially (and forcibly) owned by the Federal Government and when we have the enforced intervention - socialism - that the recent rescue/bailout imputes to the system. Since we now know "capitalism" really means those in charge of the capital have free license to run the economy into the ground, former and would-be "capitalists" may not want to cop to the name.

"Socialism," or collective ownership, has such a negative connotation to our Yankee ingenuity and inclinations, that even if the Federal Government were to nationalize feature film production - or Hollywood - we still could not accept the moniker, much less the reality.

Back in the dark ages of the 21st century I was a wet-behind-the ears account executive with the Wall Street firm E.F. Hutton & Co., Inc., founded by actress Dina Merrill's father, Edward F. Hutton. It was common knowledge around the firm that when Ms. Merrill, daughter of Post cereal heiress Marjorie Merriweather Post, AKA Marjorie Merriweather Post Close Hutton Davies May, informed her father that she was going to become an actress, the enraged financier, in a pique of anger, purportedly told her, "No daughter of mine will sully the name of Hutton upon the stage!"

Whereupon Ms. Merrill, in the ultimate game of one-upmanship, took the name of her father's fiercest rival, Charles Merrill (yes, the on-and-same Merrill of Merrill Lynch which was recently subsumed into Bank Of America). Thus was christened Dina Merrill of stage and screen fame.

Considering that the wire-house E.F. Hutton long ago disappeared, and that the name of Merrill Lynch is also now history, it's worth noting that Ms. Merrill, who will celebrate her 83rd birthday in December, is still thriving. When all is said and done, the institutions founded by the mighty - all of them men - have foundered. Yet Dina soldiers on.

Perhaps we can take a leaf from Dina Hutton Merrill's durability when it comes to our forthcoming metamorphosis and come through the process with style and grace. Neither a Capitalistic nor Socialist system, perhaps we'd fare better as a Dinastic one. After all, what's in a name? A system by any other would smell as sweet.

Just a Number?!

   "It's just a number!" is an oft-recited cliche with which most Americans are familiar, and a mantra too often invoked during the last 8 years, when this consumer-driven culture was encouraged, cajoled and admonished by its leaders to "Spend, baby, spend!"  Almost no one gave a tinker's damn how Americans could afford to play out the American Dream, much less afford "guns and butter" as a society at the same time.

     The bill has come due.

   The DJIA closed down for the 7th straight day a breathtaking 678.91 points, taking the Dow to a neighborhood not seen for 5 years.  If this sounds familiar, it is.  Just over a week ago (so yesterday) I wrote of the implications of that day's decline of 577 points, a loss which would, in any other year, be remarkable.  The fact remains, however, that the index has continued to lose ground daily at a similarly stunning rate.

   This week, I joked with a friend that if the DJIA continued in free fall, in approximately 10 business days - 65 trading hours away - there would be nothing - zip, zero, nada- left to worry about and we could all start over again,  ha-ha-ha!  Who says words don't have power? Especially in the collective consciousness.

   Surveying the collateral damage of the actions of a few - (1) the Wall Street titans besotted with greed/hubris; (2) the "nothing-down," un-vetted willing to be led, sheep-like, down the proverbial primrose path; but worst of all, (3) government leaders, who repeatedly misled and lied to their citizenry, all for the officials' own political interests and advancement -  it should come as no surprise that the financial arena is a proverbial war-zone.  The real problem is that we are - all of us - unscripted soldiers in this "take-no-prisoners" battle.

   Is it any wonder that the Dow tanked almost another 7oo points today?  The real wonder is that it hasn't cratered sooner.  Certain market gurus contend that -until one actually sells - there are no losses.  Well, just try to take that to the bank, assuming any are left....  

   It turns out that there is everything in a number, especially when that number represents the yardstick of a nation's financial health.  And right now, the U.S. is the sick man of the world, and none of the known palliatives are working.

   In the 1970's, during the country's worst recession since the Depression, President Richard Nixon said of the market's decline, "Frankly, if I had any money, I'd be buying stocks right now."  The market soared.  President Bush has not been similarly successful in reassuring Americans, who, mindful of  the adage, "Fool me once, shame on you; fool me twice, shame on me," have let W's disingenuous words fall on deaf ears.

   For all intensive purposes, numbers now are as transparent as cement and coherent as hieroglyphics.  Perhaps that's why, when all is said and done, the blood shed in the Street will neither exonerate nor condemn to anyone's satisfaction.  Rather, the clear winner will be anyone who's still left standing...  

THE PAST IS STILL PROLOGUE

  

   Every day on Wall Street is now becoming "the end of days," save for the fact that there is 

No Rapture on the faces of the people toiling in its vineyards at the crossroads of Wall and Trinity.  The first Monday in October this year, October 6th, was no exception to the string of disasters being chalked up in the cauldron of collapse.  

   The day's tumult came on the heels not only of  doubts about the newly-inked Rescue Bill for the Street, but on the no-holds-barred comments of a popular "telefinangelist," who blithely recommended on the "Today Show" that viewers divest themselves of all their stocks if they think they might need their money in the next 5 years...and who among us doesn't need their money in the next five days or weeks, let alone five years, apart from Warren Buffet , Bill Gates, et al? 

   Down by 800 points during early trading, the DJIA rallied, closing down 369.88,  falling below 10,000 for the first time in 4 years.   

   To even casual observers. this is cataclysmic, because in the 21 years since "Black Monday" of October, 1987, a whole new generation has grown up in the market believing they were bona-fide geniuses, having found the alchemist's formula for turning dross into gold - at least until the Tech  bubble burst, followed by the Real Estate bubble, now by the Financial bubble, all to be followed by the Disappearing Consumer bubble, coming soon to a mall near you.

   

   If  there's an iota of truth in the dictum that those who fail to remember history are doomed to repeat it, then it's "Come to Jesus Time" as the horizon for a meaningful, lasting turnaround recedes further and further into an uncertain future.  

   To a generation accustomed to being acclaimed "brilliant," which rejected authority to establish its own game-rules, and whose own expectations of instant gratification were fueled by Cristal Roederer at $500 a pop, if not Crystal -Meth, this is nothing short of disaster: being in free-fall is a new out-of-body experience.  

   This is the perfect storm of uncertainty, the combination of earthquake and tsunami in every touchstone of one's life.  The carnage is ubiquitous.

   Unfortunately, unlike the market's fairly quick rebound after the October 1987 debacle, this recovery is more likely to be reminiscent of the market's excruciatingly slow ascent after its December 6, 1974 close at 577.60, a twelve-year low that ended the worst Bear Market since the Depression of the 30's.   

   I know; I was drinking Maalox on that December 6th.  

   The next day, December 7th, was my birthday, which no amount of bubbly could make happy. At the time I had won my hard-earned "ticket to ride," I was the youngest woman hired by

 E.F. Hutton & Co., Inc.  During my tenure on the Street, the market experienced no less than 3 recessions in 9 years:  the Market was in a perennial Bear Market mindset for my entire Wall Street career.   Given that nothing matures a broker like a Bear Market, I was mature as Methuselah by the time I giddily  left Wall Street for greener pastures.  

   The collateral damage from unfolding events can't be foreseen, much less guesstimated. 

But old-fashioned American resiliency, tenacity and the shoulder-to-the-wheel, still very much in evidence along Main Street, are the inherent values that will see us through.

   In the meantime, to paraphrase Bette Davis'  character, Margo Channing, the fading movie star, in All About Eve, "Fasten your seat belts - it's going to be a bumpy ride."   

   

   

 

   

DOA - SKY'S FALLING, CHICKEN LITTLE

DOA - SKY'S FALLING, CHICKEN LITTLE

   The Temple of Wall Street continued its collapse today, Monday, September 28th, the very day the US House of Representatives was expected to lay a new foundation for the Street's resurrection, when the DJIA closed at an historic record loss, a punishing 777 points. This happened despite earlier efforts of traders/bargain hunters with ice in their veins to throw some water on the fire.  

   They failed.

   After the Crash of '29, with its collateral damage, the Great Depression, government safeguards set in place supposedly rendered the destruction of Capitalism's Sacred Cow - Wall Street -beyond the pale. 

   They've again failed - at least for the next 3 days, while Congress retreats, having headed home over the Jewish holidays.

   In the interest of full disclosure, for 9 years I sported the pinstripes of an "account executive," more commonly known then as a stockbroker, for a major retail wire-house, EF Hutton & Co., Inc. before it ran into its own problems, only to be scarfed up by another firm, disappearing into the lore of Wall Street Houses gone-bad.  

   

   By then, I had already departed in search of other, more rewarding, if no less risky, adventures, heading to Hollywood to fulfill my creative needs.  With "Street cred" behind me, and stories of my former colleague's misadventures dancing in my head,in 1986 I wrote a pilot for television series, "BOARDROOM,' in which I penned forth the peccadilloes of the wealthy,the greedy and the caught-in-the headlights innocent, as they played and preyed - a "Dirty,Sexy Money" meets "Boiler-Room" potboiler.

   I scripted a scenario purely out of my imagination in which, by the end of the first day, the DJIA plummeted over 800 points.  As the pilot played out, lives were scorched - the "sky's falling" affect- everyone was in a sea-change together:  moral individuals took the high ground, the not-yet-named "Masters of the Universe" were drowning in their own private hell, and innocent bystanders were swept along with, or under, the tide.

    Thanks to a William and Morris agent, the script was circulated among the usual suspects who wheel-and-deal in television pilots. But after a few weeks, when no offer was forthcoming, I asked what was wrong...

   "Pure fiction!" I was told.  The network "suits" found the idea of the DJIA crashing to that extent absurd, unimaginable, implausible, and therefore, not sale-able to the viewing public.    

   The idea was, in short, DOA, dead-on-arrival, much like the Administration's rescue bill on the Hill today. Unfortunately for the man-in-the-street, he's expected to bear the burden of rescuing not just the caviar and champagne lifestyle of the villainous "masters of the universe," but to save Western Civilization as we know it.

   Wellll, okay, maybe that's hyperbole.  But when you extrapolate the Domino Effect out to the 10th power, it's not quite so absurd.

We're damned if we do rescue Wall Street, but toast if we don't: like it or not, Wall Street is now the shadow side of Main Street. We are in this together, but for most of the past 2 decades, it's been a "heads Wall Street wins; tails the little guy loses."

   That's got to change.  Let's hope our fearless leaders get some sense knocked into their heads on this 3 day hiatus, and that they can come together to rescue, not the Street but the American Dream. 

   In the meantime, I think I'll dig up that old "BOARDROOM" script - for a documentary