Saturday, October 27, 2007

Altrusism, As Oiled

If there's one thing that really gets my goat it's the idea of "grand old men of Wall Street". I should not really break my posting fast in such an intemperate fashion, and while tipsy as all hell to boot, but I'm bored of this linkage between money and respect. Call it jealousy, call it the fact that no-one achieved anything worth a damn without giving up some money while doing do (note that I include Sam Walton of Wal-Mart among these ranks).

I think about it whenever I hear of a rescue attempt, that rare chance for massive collusion between the big brokerage houses. The gentle deflation of Long-Term Capital Management becomes an act of heroism rather than a well-coordinated, yet craven, attempt to keep the boat afloat.

The New York Times, wedded as it is to making New York's abnormal seem normal, leads the pack. These weird, smart people, they have all our interests at heart. They die, they contribute to charity, notes Andrew Ross Sorkin, the most extreme case of journalistic capture (like regulatory capture, only less dangerous) anywhere in business journalism. That the attempts of those that distort housing markets, allow preposterous restaurants to exist, and give unusually large amounts to political campaigns can be marked down in the same column as these less profligate of us is a wonder of modern political economy that I wish a class war still existed to note them in.

It's not that I believe titans of finance incapable of good. They demonstrate it in their own way by doing incautious things at charity auctions. Just that to slide gently from college to business school to a banking career to a middle age spent dabbling in philanthropy does not make you a saint, for the simple fact that a brutally redistributive tax system can and has had the same effect as a middle age of good intentions, and its much more reliable.

I'm minded of the US Weekly column - Stars! They're Just Like Us - the idea that these imbalances are natural. It's not. They earn the kind of money that launches lawsuits, that fights the march of climate in gardens in Florida.

And I say this not out of jealousy or revenge or any other reason beyond the provision of a warning. There is always a beneficiary, whether a Boston ward-heeler, a savings and loans executive or a silvery-haired legend of structured finance. Bear it in mind when thinking or The Entity, or M-LEC or the Superfund, the vehicle that will keep the light out of the dark corners of the structured finance dungeon for long enough that the principals' reputations can be salvaged without any pain.

I'm minded of old-school Gumby Fresh favourite Christian Baha, the ex-cop who launched the original Superfund. You can still find one of their offices on Fifth Avenue, opposite the New York library. There's something more wholesome about the unalloyed pimping of Mr. Baha next to the worthy self-preservation of the big banks. Maybe Herr Baha caught a fall, but he's no more or less deserving of it than half the equities traders south of 59th street.

K, time for some fluids.


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