Deja Vu All Over Again

For most, the debacle in our financial markets creates emotions ranging from fear to anger. How could so few in our culture engineer our economic catastrophe, free from scrutiny and now free from judgment? For me, it conjured up a bitter-sweet chapter in my life that occurred over twenty years ago, during my stint with a Wall Street Firm. I joined E. F. Hutton & Company in 1986. It was a name respected and revered at one time on the Street. By the time I decided to become a broker, I had accomplished a measure of success and had also been inspired over the years by an Uncle who had, after a career at Coca Cola, spent a successful second career at Merrill Lynch in Atlanta. My older brother had also experienced success as a bond broker during the late sixties, until the debt market had a hiccup.

By the time I joined E. F. Hutton, there had already been problems at the firm. I should have seen the storm clouds on the horizon. Bob Fomon, Hutton's CEO, was a notoriously vain man, a profligate spender of the firm's money and unknown outside of the boardroom, a sociopath. He lived in a castle of entitlement, not unlike that which exists to this day on Wall Street. Hutton had already been through a check-kiting scandal in '82, had pled guilty to 2,000 counts of fraud and paid a fine. Unfortunately for Hutton, those responsible escaped punishment and remained. For Bob Fomon, the scandal was just a temporary inconvenience in the otherwise imperial realm that he had built for himself. He chartered jets to fly his cronies and honeys to lunch in Paris, bought ridiculously-priced works of art to adorn his penthouse, lavished unearned bonuses on those in the firm he partied with and who looked the other way: all at the expense of the firm.

When the crash came in October of 1987, much like this year's collapse of the financial markets, all of the excesses and malfeasance, no longer hidden in the flood of cash from investors, now gone, all came tumbling down. Within months, a great name on Wall Street was sold to the lowest bidder and became Shearson Lehman Hutton, and only months later morphed into Shearson Lehman Brothers. The Hutton name was gone. Within a few years, the remnants were assimilated into a pathetic deal to become part of Smith Barney. Many books were written about the demise. I read them all. There were, however, no government bailouts. The markets, unsympathetic yet efficient, took up the slack and the world continued to spin.

The central theme both then and now is the culture on Wall Street of a perverse sense of entitlement. Though a "fear of God" was inculcated in the retail brokers to always do the right thing, practice impeccable ethics, assess "suitability" for each investment presented to clients, engage only in "non-discretionary trading", follow the tried and true methods of proper "asset allocation", ascertain a client's true "risk tolerance", apparently no one preaching these tenets practiced them. Living in New York during training, we were in an isolated world wherein we were brainwashed into becoming automatons of compliance while those that actually controlled the money had total disregard for the law. Does this sound familiar? Were there any unscrupulous retail brokers? Of course. Human nature, after all, is human nature. Yet the culture on the retail side was all about fanatical transparency. What we on the front lines collecting the money didn't realize was that the culture of those sitting in the real seats of power was all about creating wealth for themselves, clients coming in second. Fast forward to today.

When the former CEO of Merrill Lynch, O'Neal left the helm this year, he took $161 million in compensation for his efforts. And what exactly did he accomplish? On his watch, the favorites of the firm, the traders, created the end of the most powerful brokerage firm on Wall Street. Why was this allowed to happen? Well, half the firm's profits in 2006 came from the synthetic world of trading that exploded this fall. The Merrill Lynch story was only one of several stupendous collapses this year. And what, you may ask, have our best minds done to correct this egregious error? Our elected officials have poured billions of dollars into the very hands of those who engineered, oversaw and encouraged the behavior that brought the entire world to the brink of a depression unlike anything seen in 80 years. What's almost impossible to believe is that we now sit idly by and allow this to happen, with merely a whimper.

With two consecutive administrations and two completely different congresses from an ideological perspective having created this apocalypse, they now are pouring hundreds of billions of dollars right back into the very institutions that have nearly destroyed American Capitalism. With another rumored $850 billion to be spent after yet another new administration takes power, my only question will be, who gets it? What would American households do with the $1.5 Trillion dollars now being entrusted to those who created the mess in the first place? One can only guess. Probably fix up their home or pay it off, buy a car to replace the old one that's unreliable, pay off credit cards extracting 29% interest, legally. Most likely, they would all spend at least some of the money in an economy that is 2/3 based on we the consumers. Will the people we elected decide to help the Americans who are in large part the victims of this debacle? Don't hold your breath.

Borrowing from a work by William Bennett, where is the outrage?

Feline Futility

For generations, the argument has raged (well, maybe not raged) as to whether the dog or the cat represents the best choice as a pet. Cat owners call dogs stupid and dog owners call cats useless. For the sake of journalistic propriety, let me state for the record that I am a dog lover and have little or no use for cats. Yes, I think kittens are cute but am one who found Steve Martin's "cat juggling" skit to be hilarious, not inhumane.

One of the things that attracted me to my wife, Stephanie, when we met "online" on Match.com was in her bio. She went through a list of what she had in her life and ended with: "and two damn cats." I knew that if we held nothing else in common, her distaste for cats was at least a starting point. We eventually got married (almost 5 years ago) but the cats are still around. I must admit, they do grow on you after a while. One, I call "Grey Cat", is very affectionate, has been run over at least 5 or 6 times, and still keeps on. You've got to admire that. I renamed her Grey Cat because the name given her initially by my daughter, though innocent in its intent, made an ex-sailor nervous because the name, I believed, might offend any lesbian friends we might have. No, I will not reveal Grey Cat's original name, except maybe after a few glasses of wine.

The other cat, Feather, has no use for any human except at feeding time, when it makes a complete nuisance of itself whining for food. The only reason I tolerate her is that when Steffi and I were dating, this cat, who has never sought nor given any affection to anyone, came over and curled up in my lap. Everyone was shocked. Steffi joked that "Feather must approve of you." She has never repeated this behavior again.

It is believed that Grey Cat is older than Feather, and may be her 1st cousin, or aunt, or half-mother. Nobody's sure at this point. Cats inbreed and cross-pollinate so frequently it's like watching "Deliverance" all over again. You'd think that being related, they'd get along. Most of the time they just tolerate each other. Feather is constantly pestering Grey Cat and occasionally Grey Cat has enough. There's a lot of hissing and that guttural sound like no other. I have a can of compressed air that I use to pester Feather, just to make it fair.

With the prospect of moving in the near future, it has bothered me a little what we will do with these half feral cats. Of course, we could just move and take bets with the neighbors how long it would take for the cats to figure out we were gone. Just kidding. At their age, it also doesn't seem fair just to pawn them off on someone who likes the typical, genteel kitten. Another unspeakable option is not going to happen. I may not care that much for cats but I do love animals in general. Euthanasia might also precipitate a hand grenade over the fence from a PETA nut. I'd say we'd take them with us wherever we moved, though experienced feline types tell me that the disorientation would have them disappear, perhaps trying to hitchhike back to their hood.

I just don't know. Of course, this all began with a little girl that wanted pets. She is all grown up and gone away and the pets are still here. We're not complaining, we just wish our daughter was here with us, too.