Thursday, December 29, 2005


Suddenly everyone is a hunter. I can't read an article about some hedge fund jerk without it mentioning halfway through the article that the guy is an avid hunter. Bow hunting for elk seems to be the preferred avocation for these big game honchos. (I guess hunters, as well as the hunted, move in flocks and herds.) I know guys who have never handled a gun before the age of thirty-eight, except for the toy cap gun that they got for Christmas when they were seven years old; now they dress up in new Ed Bauer duds on the weekend and head off to the wilds to kill something.

The "wilds" nowadays ain't exactly wild. These Elmer Fudds "rough it" at hunting lodges or clubs in Upstate New York or remote New Jersey. These lodges are more like posh dining rooms at some fancy country club. You start off the hunting excursion with bloodies, mimosas, beef tenderloin and scrambled eggs, all prepared by a chef on the premises. And the "hunt" typically involves a "release" of birds--ducks, quail, pheasants--that have been penned on the property and are ready to fly right over the hunters' heads. The released birds can number in the hundreds; the sky is black with them. You can close your eyes and aim your gun in the air and be sure of shooting down a bird or two. Hired help stands ready to reload your shotgun after you've pelted the bird-filled sky. After awhile, the "chuck wagon" comes by and you can take a break with a fine cognac, a Cuban cigar, or just a plain Krispy-Kreme doughnut and coffee. The hired help who flushed the birds out, loaded and reloaded your gun, take care of retrieving the birds. Meanwhile, you need to rest your weary trigger finger, so you retire to the comfort of the lodge for a lunch of venison medallions washed down with a Grand Cru bordeaux.

Some of these manque hunters think this is fun. But the primary point of all this is not to have fun. The point is to walk around in Ed Baurer, with a newly purchased Berreta shotgun that costs thousands of dollars. A pack of retrievers and bird dogs add to the ambience. In short, the primary point is to feel like you are landed gentry, to feel like you belong in one of those cheesy hunting scene paintings in a Steak and Ale restaurant. After having made a large amount of dough, the nouveau riche have nothing else to pursue but class.

You know it's getting bad when people like Madonna take up hunting. A few months ago, I saw a photo spread of her in one of those scented magazines that my wife buys. She was photographed traipsing about one of the estates that she owns in the English countryside. She was ridiculously attired in jodhpurs and tweed hunting jacket and, with a straight face, posing as an English aristocrat. We're talking about a gal who grew up in Detroit with the last name Ciccione. "I loved my bespoke outfits and everything," said Lady M. "It was so much fun. That all changed when a bird dropped in front of me that I'd shot. It wasn't dead. It got up, and it was really suffering...I realized I had a kind of bloodlust, was manically shooting things and trying to kill as many birds as possible." Yeah, okay... we wouldn't want a couple of drops of bird blood to get on your hunting jacket. Pity the poor animals who are being wounded by amateurs and poseurs who don't know how to shot properly.

I never got into hunting. The fact that my mom was a founding member of the local Animal Protection Society proved to be a hindrance to my pursuit of animal killing. But I did have a grandmother who lived way out in the sticks. She was a tough old bird who had outlived two husbands, a modern-day pioneer woman who raised cattle, lived from her vegetable garden and smoked her own hogs. She loved to hunt and fish. She took me squirrel hunting one early Fall morning. She handed me a 410 shotgun and we trudged about in the damp woods for an hour or so before I finally managed to blow a squirrel out of a tree. We bagged it, and later I helped Mimaw, as we called her, skin, gut, and clean the two or three squirrels that we had killed. She then rolled the dressed carcasses in flour and threw them into a greasy frying plan. We ate them with scrambled eggs. I'll never forget when Mimaw got the cooked head of one of the squirrels, squeezed the tenderized skull until it pooped open and sucked the brains right out. "A real delicacy," she said to me.

Now that, my friends, is real hunting.

Thursday, November 24, 2005


(North Pole, Dec 7) The high finance world was rocked today by news that Santa Claus is selling out in an LBO transaction. During a press conference at Santa's Workshop, a sprawling ten square mile assemblage of factories producing everything that every heart has ever desired, Seth Tannenbaum, chairman of buy-out firm Kilbyrd Crevice, announced that his firm will be leading the $100 billion transaction.

"We are pleased and honored to be managing this transaction, the largest LBO in history," he said, with St. Nick standing by his side. "Santa Claus is a marketing icon, the most widely recognized brand in the world."

Kilbyrd Crevice will lead a syndicate purchasing 70% ownership interest in a newly formed corporation called Santa Inc. Mr. Claus will hold the title of chairman of the new entity and will own the remaining 30% interest, valued by Mr. Tannenbaum at $30 billion, an amount which elicited a jolly Ho-Ho-Ho from Mr. Claus.

Santa Inc. plans to borrow through a combination of bank debt and high yield bonds approximately $70 billion to finance the LBO. Mr. Tannenbaum appeared to have no concerns about arranging the financing, saying that "every bank in the world will be beating down the doors to get a piece of Santa Claus."

Some financial analysts have questioned how such a massive amount of debt will be serviced, given that Santa Claus does not charge for his products and services. Answering that, Tannenbaum said that the first order of business would be to trademark the names Santa Claus, Old St. Nick, St. Nicholas, Kriss Kringle. Tannenbaum estimated that the royalty payments generated from that trademark would total more than $25 billion annually, more than enough to make the debt payments.

He added that the possibilities of other revenue streams resulting from the "monetizing" of Santa Claus are almost limitless. For example, children might be told to leave a dollar bill (or the equivalent amount in the respective currency) for Santa instead of the traditional cookies and milk. "There's another billion dollars or so from that tidbit alone," Tannenbaum exclaimed. He pointed out that Santa Claus is still not known in large parts of the world. "We will be immediately exploiting the market in China, which is completely untapped when it comes to the joys and wonders of the Santa Claus experience," Tannenbaum said.

"Even though the old man has been schlepping toys for two hundred and some odd years, we do not view this as an investment in a mature business," Tannenbaum said. "This is a growth opportunity for us."

Tannenbaum said that one of the "hidden values" inducing Kilbyrd to make this investment is the workforce supporting Santa Claus's enterprise. "There's nothing in the world to compare to these elves," he said. "We're not talking UAW factory workers here. These elves are super freaks. They work 24/7 with one break every twelve hours for some hot chocolate. They don't get sick so health care costs are nil. They're not concerned about pensions because they expect to be doing this until they drop dead on the workshop floor. So we have no legacy costs issues to deal with."

"And most people don't know that elves crave salted peanuts," Mr. Claus added. "So, quite literally, I pay them peanuts," he said with a slighly sinister Ho-Ho-Ho.

Mr. Claus seemed a bit wistful when explaining why he decided to sell. "Well, you know, I'm no spring chicken anymore," he said as he puffed on his pipe. "And I got this weight problem to deal with and the doc told me just last month that I might have diabetes. And on top of that, it's just so hard to keep up with the population growth. I mean there are tens of millions of new kids born every year, and I can only work my elves so hard. So we're looking at some real capacity constraints down the road. And heck, I haven't even mentioned trying to keep up with the technology that all these new-fangled gadgets have today. So I had to come up with the funds for an expanded cap ex program real quick," he said. "And besides all that, Mrs. Claus kind of took to the idea of having $30 billion in the bank," he added with a wink and another Ho-Ho-Ho.

Mr. Tannenbaum said that this LBO could lead to similar transactions in the future, as Kilbyrd Crevice would look to "roll up" the holiday-themed enterprises. He said, for example, that his firm has interest in doing a similar deal with the Easter Bunny, but nobody has a clue how to reach the rabbit.



Saturday, November 19, 2005


The banking firm, UBU (no one knows for sure, but most think the acronym stands for United Bank of the Universe), announced today that November 30 will henceforth be Bring Your Mistress to Work Day.

In explaining this unorthodox policy, UBU's president, Dennis Priapas, said, "We here at UBU believe firmly that honesty is the best policy, that the truth will set you free. C'mon, we all know that the sexy kitten voice calling in for one our colleagues on the trading floor is not the dude's wife. If it was his wife, the voice would be screeching that he had to put some more dough in her checking account because her credit card was maxed out, or something like that. There's not much to admire about the French, but they do have it right when it comes to the mistress issue. Like when that guy Mitterand died and both his mistress and wife were sitting in the front row pew at the funeral and not an eye blinked. Now that was cool!"

For Mr. Priapas, Bring Your Mistress to Work Day is a natural extension of the one day a year when workers are allowed to bring their children to the office. "Mistresses are after all sort of like family, in a way, kind of," he said in a faltering attempt to rationalize.

UBU plans to mark the occasion with a competition to crown Queen Mistress of the Holiday Party. "Our annual holiday party comes up a couple of weeks later, so we thought it would be neat to annoint one of these gals as a kind of hostess for the party," Mr. Priapas said with a leer. The event will include a swimsuit competition to take place on the trading floor. Each mistress will also submit an essay describing the funniest time that she and her man almost got caught. Mr. Priapas said that the competition may also include an athletic contest, like mud wrestling.

Priapas is also contemplating having a Mistress Swap or an auction where individuals can bid for a date with one of the ladies. He was quick to add that all proceeds from such an event would go to a charity yet to be designated.

According to Mr. Priapas, "deep down, every guy wants everyone in the world to know about the hot babe he's keeping on the side....everybody but his wife, that is. Bring Your Mistress to Work Day only fulfills that need for the world to know that da man is still a stud!" He went on to say that most gentlemen find it a tremendous relief to finally bring the little secret out in the open. On that point, he said that strict rules of confidentialty will be enforced. "What happens at UBU stays at UBU," he said.

"And of course we are going to be politically correct about this and let any female worker bring that special, secret Mr. Mister to work on that day as well. Or if someone happens to have a paramour of the same gender, they can bring him or her." After a moment of reflection, he added, "Now that would be a hoot, wouldn't it? A double outing where you let people know that you are both a cheater and queer!"

No everyone at UBU was pleased with this news. One veteran banker was heard to grump, "What the hell have we sunk to? Nothing is more gauche than being seen with your mistress in the daytime. I tell you it's been a slippery slope ever since they let people come to work in casual clothes."


Saturday, November 12, 2005


(APP, NEW YORK) A lawsuit was filed in Federal Court yesterday against the investment banking firm, Morgan Schfinkter & Co., alleging that the firm discriminates against a specific ethnic class of employees. The plaintiff filing the suit is the Gaelic Society of Certified Financial Analysts. The lawsuit charges that Morgan Schfinkter has systematically replaced research analysts of Irish ancestry with those from Indian and other East Asian backgrounds. The company's hiring pattern, according to the lawsuit, displays a "conscious and willful" bias.

"This is outsourcing of the worst kind," said Seamus Finnerty, spokesperson for the plaintiff, at a news conference on the courthouse steps. "They are knocking good, hard working Irish-Americans out of high-paying jobs and bringing in coolies from India at significantly less than what they were paying before." The Gaelic Society later issued an apology for Mr. Finnerty's "unfortunate" use of any terms that might offend any particular ethnic group.

"Morgan Schfinkter goes out of its way to kowtow to these Indians while neglecting the needs of its Irish-American employees," Mr. Finnerty claimed. He cited as an example that the firm now serves Indian fare at its cafeteria on Wednesdays. "But what do they do for the Irish?" he shouted, waving his arms as he increasingly got his "Irish up." "Why did they discontinue serving Irish cuisine on St. Patrick's Day? It used to be that on that day employees were feted with corned beef and cabbage, boiled potatoes dyed green, and sandwiches named after great Irish writers like the James Joyce turkey club or the absurd Samuel Beckett pastrami with mayo on Wonder Bread. But not anymore! The only thing green in the cafeteria that day was sag paneer!"

The lead case in the class-action suit is that of Brian O'Reilly. Mr. O'Reilly at one time was an associate analyst covering the automobile sector. He was dismissed from the firm in August of last year. Shortly afterwards, the firm hired a Mr. Swaraj Dhingra to replace him.

Mr. Finnerty pointed out that O'Reilly had been at the firm for almost a year, had graduated from St. John's with a 3.2 GPA, and was close to obtaining an MBA from Fordham University's evening Executive MBA program. "And despite his hard work, Mr. O'Reilly was unceremoniously dumped on his keister by Morgan Schfinkter," Mr. Finnerty stated. "And they brought in this Swaraj fellow, making a big ta-do over him just because he was first in his class at Harvard Business School."

Spokesperson for Morgan Schfinkter, Mr. Gautam Chowdhury, characterized Mr. Finnerty's claims as "a bunch of blarney." He said that the record will show that Mr. O'Reilly had been demoted from associate research analyst to junior research associate after writing a report advising investors to "back up the truck and load up on Delphi stock" as it was a "given" that GM would throw its supplier a lifeline. The next day, Delphi shares began their descent from $10 per share to ten cents.

Mr. Chowdhury went on to say that the firm had no choice but to dismiss Mr. O'Reilly after the latter had logged an excessive number of sick days due to a chronic illness that caused headaches, drowsiness, bleary-eye, and a craving for protein rich foods.

Mr. Chowdhury had no comment when a reporter suggested that the chronic illness sounded a lot like a chronic hangover.

The spokesperson added that Morgan Schfinkter employed Irish Americans "by the scores." When pressed, he admitted that only two of said employees were research analysts while the vast majority worked as municipal bond salespersons.

Mr. Finnerty ended his news conference with an ominous tone. "And don't think it's going to stop with the Irish. Once they have got rid of us, the Dagos are next." Again, the Gaelic Society of CFA's apologized for its spokeperson's unfortunate language.


Sunday, November 06, 2005


By Karl Grimes, Vice President of CMO sales, United Axis Group, Stamford, CT

It's bound to happen. Just a matter of time. We do what we can to prepare ourselves, but it always comes out of the blue, pops up and startles you like a goofy-faced Jack-in-the-box. Just a matter of time before you have to face the Question. The Question can be a harrowing, humiliating experience. For some, the Question is a spook haunting the back rooms of their conscience and to finally get it out into the light of day is a relief, a release. I confronted the Question and now live to tell about it.

It happened a few days ago. I had just picked up my ten year old daughter from her ballet class. My girl, Regina, got into the car and it didn't take me long to know she's got something on her mind since she wasn't chattering in her usual way.

"What's up, sweetie?" I asked. "Cat got your tongue?"

"I wasn't good in school today, Daddy," she answered with a pathetic pout.

"My little sweetie doll wasn't good? Daddy can't believe that."

"The teacher asked us a question and I didn't know the anwer."

"And what was the question, snookums?"

She paused before answering, twisting the folds of her private school plaid skirt. "Teacher asked what our daddies do at work. And our mommies too, if they work."

That high-pictched screeching sound from the "Psycho" moive shower scene went off inside my head. I took a big gulp, steadied the wheel and concentrated on keeping the car on the road.

"And Lisa said her mommy was a doctor and Chris said his daddy was a dog sitter and Whitney said her dad was a lawyer and Morgan said her mommy worked for the newspaper and Rick said his daddy built houses and Bud said his dad was an astronaut but nobody believed that. And then Teacher asked me and I said I didn't know and everybody laughed."

Why in the hell do teachers have to pry like that, asking such nonsense questions like, What do your parents do for a living? What does that have to do with reading and math? And wouldn't you know it, but my little girl started bawling right there in the car. But here it was finally, the Question rearing its big quizzical head.

I have to confess that after hearing my baby doll's plaint, my first reaction was surprise that there were actually some people still around who did practical things, maybe even made stuff. Here in Darien, CT, I thought everybody was like me and worked in the investment biz in one way or know, money changers, paper hangers. I sell collateralized mortgage backed securities. How am I supposed to explain that to my ten year old kid?

Should I have said that I am an agent operating in the arena of global capital markets and my function is to intermediate the smooth and efficient flow of capital from savers to investors, from those with the dough to those without, so that everybody can buy a house at ridiclously low rates no matter how bad their credit stinks? Yeah, I'm an intermediary...I'm sure that would have gone over well.

And what skill does selling CMO's require? A good phone voice? Maybe I should have told her what I spend most of my day doing. On slow days, which sometimes can seem like most days, I'm surreptitously pulling up porn on the internet, or discussing with my colleagues for the thousandth time why the Mets suck, or cracking jokes about the imbecile talking heads on CNBC, which for some reason is played on television sets arrayed around the trading floor. We kill the time by making stupid bets, like how many times the treasury bond trader down the aisle will pick his nose within a fifteen minute period. Or maybe I should have just told Regina that what I really do has no redeeming value to society but that sometimes it's an easy way for the lazy and stupid to make a boatload of jack.

No, I should have told my daughter that I'm a soldier, a capitalist warrior. I'm on the sell-side and opposing me is the soldier on the buy-side. The buy-side soldier is smart, but his greatest weakness is his arrogance. He underestimates me, thinks I'm on the level of a used car salesman, glorified carnival huckster. He thinks that I don't have enough brain power to move a rat turd one inch. And I score "kills" by trading his mortgage-backed bonds at spreads that are wider than I deserve and keeping him in the dark about it. And somehow I'm able to sell him bonds that are as volatile as nitroglycerin, even though he thinks he's so much smarter than me. And I'm not out to sell him what he doesn't really need; no, I want to sell him what might land him in jail because that would mean a huge spread and a lot of commish. My victories are earned in commissions earned. And at the end of the year, my buy-side opponent will once again realize that I make a hellava lot more mulah than he does, notwithstanding his Harvard MBA. And he will be resentful and envious, which is the same thing as being defeated.

Fortunately, I didn't have to say anything because Baskin Robbins appeared on the right side of the road. "How about a Triple Raspberry Swirl Blaster, baby cakes? Your favorite, right?"

"Yeah, Daddy, yeah!" No more tears. And thank god, no more silly least for awhile. Maybe the next time she asks the Question, I will have made enough stupid money to have retired.

Saturday, October 22, 2005


By Corey Anders, Managing Director, high yield bond sales, Glomster & Co., New York, NY

Once upon a time, the high yield bond market was inhabited by gentlemen. I'm talking about the white shoe, blue blood days when decent guys like the bond salesman narrator of The Great Gatsby made bond sales an honorable occupation. But what, my friends, has become of us? How have we ended up here, where business is a kill-or-be-killed, dog-eat-dog, and devil- take-the-hindmost state of affairs? I certainly don't want to turn the clock back to those days when stiff patrician, prissy pricks ran the markets like some genteel tea party; but at the same time, we can not go without some sense of protocol, decorum, rules of civility, if you will. I mean, hell, before you know it the high yield market will have descended to the slimey, dank depths currently occupied by the municipal bond market.

How did we get here, to this state of junlge warfare? Some blame the hedge funds. Before the hedgies came along like hordes of Visigoths banging at the gates, the high yield market was run by insurance companies and mutual funds. These guys, for the most part, were straight arrows who followed the rules, guys who never failed to vote or slow when the traffic light turned yellow. Of course, Mephistopheles Mike Milken had his way with them, corrupted them, but still these old school guys abided by an unspoken code of conduct.

Can we reinstill a code of conduct into our market? Will the twenty-something punk hedge fund trader, who cut his teeth playing video games where you get points by running over pedestrians, ever really "get it."

I am sorry to tell my buy-side buddies that the onus lies on them, as this deterioration of etiquette is mostly their fault. After all, sell-side guys are expected to err on the side of sleaze. Sales guys have always pushed the envelope of propriety. We expect more from the other side of the street, the buy-side. We expect the buy-siders to uphold the standards of conduct. Buy guys used to compensate themselves with a self-sense of dignity and decency that partly, only partly, made up for their inferiority of income vis-a-vis their sell-side brethern. "The sell-side might pick us off on a regular basis," they use to say to themselves, "but at least we can look ourselves in the mirror every morning." Yeah, right....anyway, that noble way of thinking kept a semblence of moral order within the high yield universe. The barbarians were stopped at the gate. So it's up to you, buysiders, to save us.

Herewith is my effort to establish some rules of behaviour in our market:

Rule 1) IDEAS MEAN TRADES: When I give you an idea, Mr. Buy Guy, and you decide to act on it, you trade with me. Not the lazy ass Morgan Stanley salesman, lounging with his feet propped on the desk, waiting for the phone to ring. Nobody throws capital around in this market anymore. The only capital that means anything nowadays is intellectual capital. It's all I gots, homey. So when I tee the Great Idea up for you and you decide to send it down the fairway of alpha returns, how about giving me a call with an order? And I don't mean the usual order that I get from you, namely, "Don't bug me today, Corey."

Rule 2) YOU WANT INFO, YOU GIVE INFO: Don't call me up with sixty-five questions about some situation and, after I have dutifully answered them, then say that you have to hop. I don't mind telling you what kind of a seller I have, if he's a hedgie or mutal fund guy, what his thinking is, whether he's puttingon a short or not, how long he's had this position, does he take cream in his coffee, whatever...I don't mind answering those questions as long as you give me info back. Like, what are you thinking, what do you have in mind. You must have something in mind to ask me all these questions. Just give me a fucking hint, will ya!

Rule 3) NO NEW ISSUE WHINING: When a deal is ten times oversubscribed, don't whine when I tell you that you're getting $1mm instead of the $10mm that you put in for. (And we both know, without saying it, that all you really wanted was $5mm.) Such whining is especially unseemly considering that I can count on one hand the number of trades you've done with me the past three months. You wanna play, you gotta trade. And it doesn't help your case when you put your order in at the fity-ninth minute of the eleventh hour, just before the books close and it's a given that the deal has been done. That's called piling on.

Rule 4) IF YOU ARE GONNA FLIP, GIVE ME A TIP: Hey, if you don't plan to hold the million of new issue paper you got allocated after it breaks, just be upfront with me. Honest, I won't hold it against you if you are a flipper. I just ask that you show the bonds to me when you decide to sell. Dance with who brung you to the shindig.

Rule 5) TRACE SUCKS! And you thought TRACE was going to give you an edge over me. Now you realize that you can't bullshit me anymore the way I used to bullshit you. Transparency doesn't really do either one of us any good. All TRACE does is create trading logjams. So don't come at me all the time with what just traced. Let's just pretend that TRACE doesn't exits. We'll all get along better. You cover your eyes and I'll cover mine. You bullshit me, I'll bullshit you and we'll get more done and have alot more fun besides.

Rule 6) DON'T PUT AN ORDER OUT TO MULTIPLE BROKERS. Listen, dumb ass, you are hurting yourself. I can't tell you the number of times that I've taken your order to buy bonds to an account and the guy on the other end says to me, "Hey Corey, you're the third broker today who's called me to buy this piece of shit credit. Must be something going on. I'm holding onto what I got." It takes me about five minutes of snooping to realize that you've given the same order to two other bucket shops, who are shopping that order around like it's a fifty dollar whore. Just desserts when you get hit on all three orders and you end up buying three times the bonds that you wanted.

Rule 7) DON'T SIZE ME UNLESS YOU ARE READY TO TRADE: When I give you a market or firm bid or ask, and you ask me how many, and I tell you, then I expect a firm bid or offer from you in return. Don't tell me that you'll "be back in a few" or that you'll think about it. When I drop my pants for you and show you what I got, then I want more than a hand job.

Rule 8) I'M NOT ENTERTAINING YOU BECAUSE I THINK YOU ARE A GREAT GUY: Look Buyside Buddy, I do like you, maybe even think of you as a real friend, despite the fact that sometimes you can be a real pain in my ass. But I'm not taking you to the best restaurants in New York, sitting you in courtside seats at the Knicks games, covering your $2,000 ante fee at the montly Texas Hold Em Poker Tourney, all because I think you are so swell. I'm doing it because I expect something in return. DUH....And so what if it's not coming out my wallet but the firm's; it's the thought that counts. Let's just say that there is a gradation of tit for tat. The $1,000 tab at The Four Seasons for you and a few of your research monkeys, for example, should get me a $5mm order the next day. The annual two day golf outing at Shinnecock, well, that should result in your calling me when you want to dump your $25mm position in some crappy auto supplier. And when I take you to the local Korean massage parlor for "a rub and a tug," let's just say that you really owe me. (Certainly implicit in all this is that the greater the degree of illegality in my entertaining you, the more you owe me in directed business. )

Rule 9) DON'T MAKE ME LOOK LIKE A JACKASS: That's easy enough to do, I know. But you see a lot more than I do since you are seeing levels from about two dozen brokers. So don't give me an order that you know is way off the mark, just to see if I can find some clueless dummy out there. It's impossible for one blind man to find another one even more blind. You are wasting both our time and making me look stupid to all my accounts.

Rule 10) DON'T HOLD ME UP FOR A 1/4 OF A POINT WHEN WE ARE TRYING TO TRADE SOME DISTRESSED CREDIT THAT IS EITHER GOING TO ZERO OR PAR. I can't tell you the number of times that a trade on a distressed bond died over a quarter of a point. We can't close the gap on bond trading with a 30's handle? We are going to die 35 1/4 to 35 1/2? Are you kidding me? If you are buying this bond, you have to think it's going tens of points higher. So why are you walking away 1/4 of point from buying it? And, on the other hand, if you are the seller, you probably think the bond is as worthless as wall-paper. Like Nike says, Just do it! and move on to the next one.

I guess ten is enough, for a start. And I'm sure my buy-side buddies have plenty to say as to how the sell-side can improve its behaviour. I'm all ears for that. In short, like that great humanitarian, Rodney King said, "Can't we all just get along?" Sure we can. And we can all still make plenty of dough to boot, without driving each other bananas.

Sunday, October 09, 2005


What does it mean to be rich? What does it mean to be poor? These are relative terms, as any sociologist will tell you. A person considered poor today might own a car, a house, and in general have a standard of living that was considered middle class thirty years ago. And the rich of today are not your daddy's rich. There was a time when you were considered well off if you owned a new model Buick, had a hi-fi stereo and fondue set.

The Council of Socio-Economic Trend Analysis attempts to answer these questions with the annual release of its Affluence Index. The Council is a government sponsored organization which attempts to ascertain trends affecting--oh, blah blah, really it's just a gaggle of ex-bureaucrat policy wonks who attempt to justify their meager non-profit salaries by issuing silly pronouncements like the Annual Affluence Index. Whatever, the Affluence Index is closely followed within certain circles, particularly the Wall Street crowd, which is, of course, neurotically status conscious. And this year's index is already causing tremors across the high finance landscape.

Evan Farkas, chairman of the Council, had this to say, "The index continues its upward ascent from its initiation in 1995. Starting at 100, the index is now at 3065! Needless to say, a lot of people who once thought of themselves as well-to-do better be prepared to eat some humble pie."

And what constitutes affluence in 2004, according to the index? The component with the largest increase is housing. According to Mr. Farkas, an affluent person today would own a house of no less than 10,000 square feet, have a water view of some sort, a "media theater" with a private screening room, and an indoor recreation facility, e.g. bowling alley, basketball court. A new dimension to the housing component is the second home factor. No one today can seriously call himself affluent without owning at least one second home in a specially designated "high rent" zip code (think Martha's Vineyard or Vail, for example).

Other aspects of the lastest index have sent chills down many an investment banker's spine. For example, the hoity-toity have only one spouse bringing in the bread; nothing today is more bourgeois than an husband and wife both working. And don't think that cute Swedish au pair entitles you to think that you are something special. The affluent have "staff," a cook, a gardener, and a nanny who is indentured long enough to ensure that she will be attending her ward's wedding twenty years from now, just so the parents can show how "egalitarian" they are.

Nina Dildowitz, a psychologist who limits her practice only to those with fat wallets and skinny psyches, is already witnessing reprecussions from this report. One of her clients, a high yield bond trader who earned $2 million last year, called her in a panic after reading the report. "He was hyperventilating, whimpering," Ms. Dildowitz said, "mumbling that he was a failure, a loser because he knew that he had been 'priced out' of The Affluent. He was shocked, for example, to find that having his kids' college educations paid up fifteen years in advance was no big deal. Afterall, the truely affluent have donated enough to the university of their choice to have at least a classroom named after them...The only thing I could do was double up his Lexapro prescription."

Ms. Dildowitz expressed concern that investment banking drones who have sacrificed their hobbies, their families, their health, their equanimity, in short their souls, are now asking themselves, For what? To be lumped into a socio-ecomonic class labeled The Comfortable?

Mr. Farkas expects even more bad news for wannabe's and social climbers next year. "For 06, we're adding a new component to the index, Privately Owned Jet Aircraft." He concludes by saying, "Let's face it, unless you are a senior partner at a hugely successful hedge fund, you ain't rich."