Daily Office:


Matins: Why do we all feel that the failure of Lehman Brothers is so much worse than everything that has happened before, from Black Monday (1987) to the collapse of Enron? Why do we suspect that, this time, the disaster may engulf us?

Tierce: Floyd Norris on lax financial regulation:

Those who were complaining, only months ago, that excessive regulation was making American markets uncompetitive, had it exactly wrong. It was a lack of regulation of the shadow financial system and its players that allowed this to happen. The regulators might not have gotten it right if they had tried to put limits on leverage, or assure that it was clear what risks were being taken, in the world of derivatives and securitizations. But deciding not to even try, and assuming that risks traded secretly would somehow end up in the hands of those most able to bear them, reflected ideology, not analysis.

Sext: Read about Palisade Prep, a new public high school in Yonkers, funded in part by the Gates Foundation, that aims to send every student to college.

Rosa Kastsaridis, whose 15-year-old son, Frank, is a ninth grader at the school, said the available counseling was an important factor in her decision to take a chance on a promising — but untested — school.

“I graduated from the Yonkers school system 17 years ago and wasn’t able to get a scholarship because the guidance counselor at that time was not educated enough to help me,” she said.

Compline: Today’s one of those days when reading about the horreurs du jour through the elegant francophonie of Jean Ruaud’s Mnémoglyphes is like a comfort from the Psalms.


§ Matins. And why does it all seem to work for the Republicans — the engineers of this chaos — instead of against them?

I will be seeing a skin cancer surgeon on Wednesday. Whether or not I act on what he tells me, I’m going to ask whether I can die without pain if I do nothing to counteract the tumors. Right now, I am ready to leave this world to the Republican jackals. Let them merrily destroy everything without me.

§ Tierce. Ideology makes people stupid. Get with the program — and stop thinking. We used to laugh at Russians who castrated their minds with a Procrustean Marxism that never explained anything. At least they had the excuse of doing so at gunpoint.

Throughout the market ballyhoo of the past quarter-century (I can still remember when things took off in August 1982), one risk that few traders have dared to run is the risk of missing out on the par-tay.

§ Sext. But will the kids come back to Yonkers?

Yonkers was the landscape of my childhood nightmares. I don’t remember anything very clearly, but I do recall regular trips to the CYO indoor pool before I was in first grade. Yonkers was both dreary and tough, and I had a mortal fear of being abandoned there. I already knew that I could never get used to a shabby environment: I would always be aware of it and I would always want to change it. The landscape of indifference may be as humanly natural as any other, but it is the most malignant landscape this side of a camp’s barbed wire.

§ Compline. The fact that someone far away pays attention and cares, in an intelligent way, about this country of ours is a refreshment that makes me very glad indeed that I decided, a few years ago, to turn my fumbling grasp of French into a personal asset.

4 Responses to “Daily Office:

  1. Fossil Darling says:

    Re : Lehman, et al. My boss called at 5:15AM. I had been awake for an hour watching CNBC. There is, while we recognize the opportunities this chaos has produced, a sadness here. When I went to get breakfast the lady on the register said to me , “que tristesa que veo en todos tus caras…..” how sad our faces all look…….

  2. Nom de Plume says:

    The overnight evaporation of investment bankers is change. A change in era and a call — yes, says this former Wall Streeter — for more, not less, regulation. It is indeed ideology and fear of total capitulation to regulatory handcuffs that makes market people resist all attempts to oversee risk management, and, more importantly, to adapt to the dazzling and fearsome array of new financial instruments and practices. A good risk management department has a stringent handle on leverage and dollars at risk every single day, so it is not out of the realm of reason to impose those kinds of disciplines on all financial institutions. The passing of long-standing firms is sad though (I still mourn the loss of my alma mater, Kidder Peabody), and reminds me of what the “old timers” in the seventies felt about all the smaller houses that were swallowed up by the bigger ones, Merrill Lynch notably, in the late 60s and early 70s. They sighed the old names like deceased children. Ah, the good old days.

  3. Michael says:

    Once Wall St. saw the money LTCM was making the spiral down was started, because their Quants where smarter and they could control the risk in the tails of the Bell Curve.

    Hello Norm de Plume, I’m also a former Kidder, W.E. Hutton and Bear person.

  4. Fossil Darling says:

    Here’s an irony that struck me after this long and ugly day. (My boss and I were conversing at 5:12 AM) :

    Sandy Weill campaigned and got repeal of Glass-Steagall and thus the behemoth Citi was formed. Due to an array of problems, the ‘model’ that Citi began, the supermarket catering to the world, became derided as impossible and calls came from investors to break the bank up.

    Now, everyone is running to the cover of the banks so the Weill model may not be so off base, just poorly run until recently.

    And Michael’s comments about LTCM are right; the computer has made alot of people think they’re geniuses. Make it complex enough and the rating agencies cannot figure it out……..

    Exactly a year ago LXIV and I were returning to the UK from Normandy and on the radio in the car, as we waited for passport control, we heard about Northern Rock, the UK mortgage bank, not staying open long enough to satisfy all its clients. I said to WW and to our host that I had not heard of a bank run since the Depression and this made me very uneasy…………..if’n I had only shorted everything in sight…..