Q2 2001

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From The Desk Of:

Steve Getsy

Wall Street Lays Another Egg. I highly recommend this article in Vanity Fair by Niall Ferguson.


With our latest financial crisis originating from our pretend geniuses on Wall Street, the author insightfully describes how Mathematical Models (“Planet Finance”)  ignored history and human nature and deemed value had no meaning.  A great read.  Remember “Liar’s Poker”?

Derivatives with unknown underlying assets sold to unsuspecting (naive?) investors.  Our fabled SEC chairman saying he thought the banks would be able to police themselves.  $50 Billion Ponzi schemes going unnoticed for many, many years.  How can this be happening to supposedly the best financial system in the world?  For sure, these are unchartered waters.

Now the question is “What Next?”  it appears we’re in for a long recession and the continuing de leveraging of the financial system.  The IPO markets are near frozen as are the banks’ lending capabilities even for companies with sterling credit. Early stage companies raising capital today are having an extremely difficult time.  Those companies with sufficient capital have a greater chance of survival.   My advice - hoard your cash.  This too will pass and we will be able to invest, grow and build again hopefully some time soon.   

Wall Street Lays Another Egg

The bigger they come: Uncle Sam and Wall Street take the hardest fall since the Depression.

Illustration by Tim Bower.  

Losing our shirt? The problem is that our banks are also losing theirs.

Illustration by Barry Blitt.