The party's over

I've read the British Spectator for 30 years. One of my favorite columns is Taki's High Life. (Taki Theodoracopulos is the Greek tycoon and journalist. He founded The American Conservative magazine with Pat Buchanan and Scott McConnell.) I don't always agree with Taki but I enjoy his insights and his scathing sarcasm. This is from his latest column:

Personally, I have always operated by instinct when it comes to finance. It was instinct that made me invest with Charles Fix after my father died. The Fix Family Fund served its investors well for close to 20 years; 20 per cent per annum. In June 2007 I began feeling creepy about the markets. Too many nightclub characters dropping names of hot hedge funds and all that. I rang up Fix and told him I wanted out. He agreed. But I waited awhile, and only got out in October, which meant March of this year. I had taken big losses but, still, I consider myself very lucky.

What is interesting is that last spring I shopped around New York for hedge funds to replace Fix. It was like being in the Führer’s bunker with Hitler posting phantom divisions on his maps in order to defend the Fatherland. The hedgies were all young, very tightly wound, looking non-stop at screens while promising to make me richer than Croesus in no time. I stayed away. The investments they were hawking around were less real than Hitler’s divisions, and my s*** detector, as Papa Hemingway called it, was ringing non-stop. The bells are ringing all right, but for most people it’s much too late.

Take Richard Fuld Jr., the simian head of Lehman Brothers. One year ago, as the credit crisis first gripped Wall Street, the ape concluded that the crisis was going to be short lived and it was time to really get rich. So he doubled down on mortgage-backed derivatives, enough to drive the firm to bankruptcy. With one difference. Fuld took in $500 million in the 12 years he headed the firm, with a large salary, private limos and private jets, as added inducements.

Now what everyone likes to know is why a petty criminal — or a major one at that — has to cough up his ill-gotten gains to the government once caught (the Rico Law), whereas the Schwarzmans, Kravises, and Fulds of this world do not. What I’d like to know is why Conrad Black is in jail for posting an all-time high for his company, and the present bunch are taking a break in the Hamptons rather than in the penitentiary. I suppose it’s called justice, the same as it was called back in Moscow during the show trials.

[...]

When Fuld went to see the Koreans just before the fall, the Koreans were interested. But he played tough, probably having seen too many westerns starring Burt Lancaster, and the Koreans told Fuld to take a hike. He wanted to make a killing rather than save the company. It’s as if Rundstedt and Manteuffel had left the western front and surrendered to the Soviets.

Here’s the great economist Taki on the future: the US will sooner rather than later go begging for capital from China and the Middle East. Which means many great American institutions will be serving Chinese and pilaf baldi in their boardrooms by next year. The man most responsible for the mess, Alan Greenspan, will publish a book, which will be a bestseller, on marital bliss (he is married to an NBC reporter) and never mention the fact that it was he, the worst Fed chief ever, who did away with regulation, promoted wild leverage and provided easier money than stolen notes, which all contributed to the crisis.

Greenspan is married to an NBC reporter, that harpy, Andrea Mitchell.

Richard Fuld is the current Chairman and Chief Executive Officer of now bankrupt Lehman Brothers Holdings Inc.