Wall Street Whiners

Not long ago Reuters was reporting that their might be a movie reprise of “greed is good” Gordon Gekko from Wall Street. And then in June Bonfire of the Vanities author Tom Wolfe resurfaced on the floor of the NYSE to celebrate the Blackstone IPO.

It seems the Masters of the Universe didn’t calculate that all the cheap and easy liquidity would ever go into liquidation. What’s most pathetic about the current situation is that the Street had always complained that Fannie Mae and Freddie Mac had an unfair advantage; now they want Fannie and Freddie to take their junk. Jim Cramer won’t stop screaming that if the Federal Reserve doesn’t lower rates NOW, he’s sooo concerned that people will lose their homes.

People can still get mortgages at conventional terms, which until the proliferation of subprime was the way to get a home loan. Subprime mortgages are like a parasite that can no longer sustain itself without a host to feed on. For subprime, that host was rising real estate values. All the rhetoric in the world will not remedy an ARM which has a higher value than the underlying property.

To quote the motto of my favorite TV series of all time (The X-Files), “the truth is out there” and it is that the Street, for all their “free market” spiel, demand a big government bailout.

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