Schadenfreude will bite many of us Greenwich residents in the butt

The Wall Street layoffs resume and pick up speed. It’s not just the Dollar Bills of this area who cheer this sort of thing – Ol’ Bill is too blinded by hate to have any rational thought on the subject but plumbers, carpenters, doctors, home sellers and even real estate agents should be able to see what will happen when the faucet is turned off.

Many don’t. I recall being at a sales meeting at another firm when news of the Lehman bust provoked a loud cheering. My peers were delighted to see some Wall Streeters brought down but as I tried to point out, who did they think was buying the houses we were trying to sell? I’m as appalled at the excesses of some of our newly rich as anyone but I know who’s buttering my bread.

21 Comments

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21 responses to “Schadenfreude will bite many of us Greenwich residents in the butt

  1. Out Looking In

    Your message is valid, but the raw facts argue otherwise..houses priced reasonably well are sold very quickly, and although Wall Street bankers are definitely attracted to this area, the last wave of MD (managing director) layoffs is coming through now…it is often difficult to see the valley from the top of a peak, and also to see the peak from the depths of the valley….also, with opportunity cost zero (risk free deposits) and fear of inflation heating up, and the precious metals in shitter (see silver prices lately), real estate is still the asset of choice…ask the Miamians about the Brazilians

  2. anon

    link is wrong – goes to your ‘one milbank’ post

  3. anon

    irony: the big hedgies who are still alive and making money are betting on a rebound in the housing industry: From today’s WSJ, article “Big Funds See Rebirth for Housing”:

    Big money is starting to wager on housing.
    Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound. And formerly bearish research firm Zelman & Associates now predicts a housing pickup, as does Goldman Sachs Group Inc.
    Other investors seem to be making the same bet. Shares of home builders are up 30% since the end of the third quarter, as measured by the Dow Jones index tracking those shares, topping a nearly 10.5% gain for the Standard & Poor’s 500.

  4. Cos Cobber

    And its the slow biz on Wall Street that has pushed NYS’ budget into a deficit again this year. Hip-hip horray for Wall Street comeuppance…but now who going to pay for those heavy medicaid fueled hospitals, etc.

  5. DollarBill

    It may be a long time coming, and it may not line CF’s pockets as much, (which is why he will resist this thought), but our economy would be much better off in the long run if it were more diversified. Less financialization, more diversification. More Apples, Googles, please, and fewer Morgan Stanleys and Goldmans. Moreover, every fifth person (I exaggerate a bit, but not much) should not be a real estate broker. The Goldmans of the world as far as anyone can see produce little social value; in fact, they produce (as the last few years have abundantly proven) negative social value, creating immense social dislocations (e.g. bailouts, foreclosures, layoffs etc.) that makes everyone worse off.

    Until we scale back the excessive financialization of our economy, we will not get our real economy in order. And we may actually face true social unrest, as this 30 year veteran of Lehman Brothers, Michael Thomas, captured in this fine piece yesterday in the Daily Beast…

    http://www.thedailybeast.com/newsweek/2011/12/25/wall-street-has-destroyed-the-wonder-that-was-america.print.html

    Money quote:

    “As 2011 slithers to its end, none of the major problems that led to the crisis point three years ago have really been solved. Bank balance sheets still reek. Europe day by day becomes a financial black hole, with matter from the periphery being sucked toward the center until the vortex itself collapses. The Street and its ministries of propaganda have fallen back on a Big Lie as old as capitalism itself: that all that has gone wrong has been government’s fault. This time, however, I don’t think the argument that “Washington ate my homework” is going to work. This time, a firestorm is going to explode about the Street’s head—and about time, too.”

  6. Spread The Wealth

    whenever I read a post by D-bag Bill I feel like I get dumber

  7. Thanks for the link, DollarBill. I agree with you and author Michael Thomas. The tricks of the trade haven’t changed. Wall Street is still Casino Central.

    Here’s another interesting piece, which might appeal to CF and readers on his side of the aisle: http://online.wsj.com/article/SB10001424052748704050204576219073867182108.html#articleTabs%3Darticle

  8. DollarBill

    Thanks, Delving Eye for the link. I read the piece, and can confidently predict Stephen Moore’s Club for Growth ideological spiel pretty well by now: govt sector workers are lazy, overpaid moochers (except for everyone who works in the Pentagon, where cost is no object), whereas people in the private sector (Wall Street included) can do no wrong since they take “risks.”. Moore’s remedy for our economy’s ills is always the same: the rich are too”poor” and thus should be showered with endless tax breaks; and the poor and middle class are too “rich” and thus should be subjected to endless austerity (benefit cuts, implicit tax increases, massive layoffs), since they are (to use the Galtian lingo) the cabooses of the economy. Moore is a warmed-over Social Darwinist, like many of the commenters on this site, and hasn’t had one interesting new insight in his wingnut perch on the WSJ op ed page.

  9. Spread The Wealth

    there is a massive convergence trade occurring across the world; it’s called GLOBALIZATION

    developed (rich) countries no longer have a competitive advantage making “stuff” vs developing (emerging) ones which can pay paltry wages; in short, the rich nations must focus on services (finance included) instead of manufacturing

    everyone loved the benefits of financialization on the way up, but eschew it now that there is reversion to the mean; sounds like a typical zero-sum game market to me where there are winners and losers (and of course, the moaning of the losers is always the loudest)

    interestlingly a little over a decade ago people were crying in a similar manner about the exact same industry (tech/internet) that $Bill seems to tout as the panacea for our current situation

  10. Anon – Greg Zuckerman – a peer I’ve competed w/ on hedge fund reporting for years just wrote the worst peice of a trading trend story I’ve ever seen come out of his byline. I’ll be writing why tomorrow. NetNet that was a piece for Caxton to pump their book, get main street to buy builder stocks, then they will sell when it runs up a bit, and the non-pro investor gets screwed.
    I am sure Zuckerman left out a lot of quotes from Mark Hanson, a mtg analyst to hedge funds I source and quote since NY Post 2008 – which would have shown why he is advising clients housing is not expected to recover in 2012.
    Zuckerman is a good reporter but clearly this was something his editors asked for on a slow news week. He should have done more homework to at least list the stocks the hedgies he quoted were long – instead of calling them ‘housing shares’. If he is a well sourced reporter (which he usually is) he could get the names from an investor in the fund or a marketing pitch book.
    Zuckerman also should have read local RE blogs like this one and quoted stories abt jumbo prime loans/houses getting reduced.

  11. Cos Cobber

    Oh wow, we actually agree on something. Yes, our economy is over weighted in financial services…yep we agree. After that, I’m sure we disagree about nearly everything else. The correction to the size of the financial services industry has been ongoing since 2007 and will likely continue for several more years. Great.

    After you are done demonizing the banks and right sizing them, whats the next step? Demonizing is the easy part.

  12. Cos Cobber

    Excellent point STW. Globalization is the root cause for much of our good news and bad. On the good side, the winners such as the corporate suits in the ivory towers are winning in a global game – therefore a larger market = larger profits = larger earnings and the losers are stuck trying to compete against the lowly wages of the third world. The widening of the income gap is a global issue with the same results around the world. For example a furniture maker in Lebanon or Hungary has to contend with the same glut of cheap asian imports as we do. Here in the US however we have not done ourselves any favors by promoting an environmental agenda without limits (many laws are good, but many go too far), a no cost litigation system (thats akin to a lottery) and unending labor laws (after overtime, child labor and basic saftely laws, nothing more is needed) all of which make the cost of US production too expensive and therefore ultimately suppress wages and prop up unemployment.

    I’m all ears as to where we are are to go from here.

  13. Cobra

    “whenever I read a post by D-bag Bill I feel like I get dumber”

    Or, one feels he/she needs a thorough delousing.

  14. Daniel

    I agree with some of what DB says, but I will still argue GOVERNMENT has gotten too big.

  15. DollarBill

    The time to stop “demonizing” the banks comes when we restore them to what they were in the 70’s: staid, boring, predictable, highly regulated institutions that lend money at miniscule rates of return. And yes, government needs to regulate them; the Ron Paul-inspired libertarian paradise of a self-regulating universe of big banks free from all government laws is a delusional fantasy that has cost our economy plenty. Rand-ites still labor under the delusion that if government just got out of the way, the banksters would be happy, well-behaved little creatures. I think we have learned the hard way how wrong the Rand-ites are.

  16. FlyAngler

    DB – You sound like Volker, pining away for a nostalgic time long ago when things were “simpler” and “safer”. So in your quest to get back to the 1970s, how are we going to turn back the clock on all else? How are we going to shrink the pension industry so it is smaller and does not need to be serviced by a larger Wall Street? Same for shrinking the non-qualified plan pool of private assets? Sovereign wealthy funds? Central banks?

    How about doing away with all the technological innovations and computing speed that allow today’s trading? How about derivatives technologies?

    Of course, you will have to impose your revisionist view of the past on the financial institutions all over the world, right? You don’t imply that we just shrink and neuter the US banks while non-US banks are allowed to operate in a 21st manner, do you? Are you behind Soros’ plan for a global government to accomplish a level playing field around the world? Do you look forward to the day when the US surrenders sovereignty to some global cabal of technocrats?

    And, as for those wonder years of the simpler and safer 1970s, didn’t they ultimately give rise to the S&L Crisis?

    DB, your spirit is to be commended but I wait for you to offer some realistic solutions that goes beyond the bromides that were repeated daily at Liberty Park. Stop whining and offer a solution that can actually work in a globally interconnected world where funds and information flow freely and with little restraint. Show us that you have actually considered the consequences of your “wants” rather than sounding like the disgruntled fan of horse-drawn buggies in the years after Mr. Ford introduced the Model A.

  17. cos cobber

    Ah, its what I thought bill, you have no platform after your usual talking points: demonize banks and utter something about rand.

  18. Peg

    It amazes me that people like DB rail and rail against the “banksters” and the money that can be made on Wall Street. What never EVER seems to cause him hysterics, however, is the realization that it is his beloved Democrats and their “regulation of the economy” that created much of this monster.

    DB – what they do on Wall Street, what our banks do today is LEGAL. It is because of a combination of regulation that prevented them from doing it got removed, and because much of what happens is protected under “too big to fail.”

    Nothing should be “too big to fail.” Nothing. When you remove that, you remove due diligence and planning and investigation and fear of doing the wrong thing. But if you want to protest this, don’t be whining at forwhatitsworth or sending arrows at Republicans and Ayn Rand. Be complaining about Dodds-Frank, and before it Carter/Clinton/Bush for essentially forcing the financial sector to create some of what it has to have turned this part of our economy into a casino that makes Las Vegas pale in contrast.

    The Republicans that want to make government vastly smaller, to remove the crony capitalism and the selecting of winners and losers by a small handful in DC are the ones you should be applauding.

    I am not, however, holding my breath.

  19. AJ

    Tony Robbins 101: Those who begrudge others their wealth will likely never accumulate any substantial wealth of their own.

  20. Balzac

    Dollar Bill, it’s a pleasure to read you. But please inform us: what is the outcome you desire? Government spending is a rachet: 10% of the economy before 1900, about 20% in the 1920s, 30% in the 1940s, 40% in the 1990s, and 44% under Pres. Obama (and rising). What level do you see as optimal, where the ratio should stabilize? Or do liberals just keep racheting? Americans want to know, because we expect 50-60% will cause our wonderful experiment in liberty under limited government to fail. It always has, in other nations which approach 60%, a tipping point. So please let us know where you would fix the government share.