The Age of Austerity
We're seeing a seismic shift in social mood.
“So, what do you do?” I asked one of the ladies sitting with my friend Jamie.
There was uncomfortable silence and unease.
"Uh, I’m unemployed," she finally said, "I used to work on Wall Street."
We exchanged some pleasantries as she gulped down her drink and ordered another. I turned to my right. "And you? How do you spend your day?"
"I spent today running in the park," she said, "I’m in real estate but there’s no business, no meetings, no interest. At this point, I’m just trying to stay in shape." She too ordered another drink.
Over the next twenty minutes, I sat back and surveyed the room.
The buzz was palpable and the energy thick. It’s been like that all month in
Between Bear Stears, Lehman Brothers, AIG (AIG) and the seismic shifts at Merrill (MER), Morgan (MS), Goldman (GS) and other investment banks, the tension in Gotham is thick and the mood in
I saw that fear in the faces of those I spoke with yesterday at NYU. The financial industry suspended hiring and cancelled existing employment agreements that were extended to students. Those who studied finance for the last four years have no place to go and nowhere to hide.
Make no mistake, people are scared. They’re nervous about their future, they’re concerned for the safety of their savings—if they’re lucky enough to have any—and they’re worried what the next day will bring.
Billy and I walked out of the bar and on to 57th Street and there were several homeless people meandering about (not a judgment, as you know).
One of them walked up to me and said “Brother, can you spare a few hundred dollars?” I gave him a few bucks as I stepped back—he was a little too close for comfort.
As we walked away, as I kept an eye over my shoulder, I said to Bill "It’s getting to the point where wearing a suit in
- Where does social mood sit in the denial-migration-panic continuum? Much like the markets can be viewed as a function of time horizon, psychological shifts may be viewed the same way.
The OSX, for its part, is down 46% over the same span. I’m not into picking bottoms—particularly given the continued chasm between credit and equity—but I have dry powder, which gives me the ability to pick my spots.
Call me an old fashioned free market capitalist but I, for one, applaud the Wells Fargo (WFC)-Wachovia (WB) deal sans government assistance.
My natural inclination as a contrarian is to take the other side of all this Depression talk. Still, as we discussed in 2006, odds continue to favor “a prolonged period of socioeconomic malaise… that is entirely more depressing than a recession.”
I hope I’m wrong but I’m not hoping for hope’s sake, if that makes any sense.
Hey YOU—Festivus 2008 is right around the corner! The low price point covers our cost with a lil’ extra to help the kids. The entire MV community comes together once a year—in my grandfather’s good name—to do our part in giving back. Please feel free to circle your spot as it’s gonna be a rockin’ good time.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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