Before I built a wall, I’d ask to know
What I was walling in or walling out;
And to whom I was like to give offense.
– Robert Frost1
There are conflicting accounts of how New Amsterdam’s Waal Straat got its name, but the generally accepted version is that the name was derived from an earthen wall on the north side of a footpath that straggled between Broad Street and the East River. The frugal Dutch settlers, with scads of experience in keeping out the Zuyder Zee, threw up the wall to keep out the English, who’d settled somewhere around Greenwich Village. Or, perhaps to repel an equally threatening attack from the Manhattan natives who complained that $24 worth of trinkets only paid for as far north as 14th Street. More recently, according to the financial media, the British have been replaced by marauding Democrats, while the disgruntled natives are now represented by the Occupy Movement around Zuccotti Park.
Wall Street is marinated in Republican theology and exclusivism stronger than any wall. That’s a truism that has been around since Alexander Hamilton hung out his shingle a stone’s throw from Trinity Church. And I can confirm that, because as recently as 1950, when I arrived on The Street like Horatio Alger with my cardboard suitcase and an inappropriate B.A., my Christmas bonus included a subscription to a Right-wing comic book urging me to vote for Bob Taft.
So it’s a given that the current scenario, fixated on the perennial fiscal crisis, continues to play out — as one critic put it — like a Mel Brooks western, with the Republican sheriff holding a gun to his own head while the Democrats as the townspeople dutifully lay down their AK-47s. The sky is constantly about to fall, so goes the popular CNBC line, and who should we blame but the Democrats?
In fact, even before last year’s election, Larry Kudlow, the Street soothsayer, had been soothing that dire results would follow in the market, all because of the evils of socialism and big government. In the year since, that’s been a little difficult to explain with a straight face — even allowing for the market’s Ouija board mystique — since the Dow Jones Average has taken a dead-cat bounce from 12,600 just after the election to a recent high of 16,000.
You remember the Ouija board game. When we were kids, it consisted of a small wooden kidney-shaped chunk of wood on little stilts, which rested on a square board decorated with stars, crescents and other magical symbols and a variety of notes relating to topics such as your secret love, your character traits, your horoscopic probabilities and other caveats and rewards.
The deal was, all the players placed their fingertips on the wooden kidney-shaped thing, and it moved around the board all on its own. Unbelievable. Or so it seemed. It was believed by some that the wooden thing moved by some strange and unknowable force, some immortal hand or eye framing its fearful symmetry. Or were some of the fingers fudging?
The players took turns asking the thing questions. Such as, “Will I meet my true love this year (or month, or week, or whatever)?” The Ouija thing would move and point to the word “yes,” or “no,” depending on what it believed in its little kidney-shaped wooden heart.
But as one of the more worldly players, I always believed that someone’s fingers among the gathering had something to do with the movement, although with multiple fingertips in play, who could tell? The consensus was that the Ouija board had a mind of its own. Or was at least magically consensual, distilling the will of the assembled players. Like communal prayer working miracles. As a player, it helped if you had gone to Sunday School as a kid, or at least had a father who was an imitation options trader on CNBC.
The Dow Jones Index, which is really a Republican dance card, reminds me of a Ouija board. Financial talking heads, Wall Street traders, and Mom and Pop investors alike pretend that the market moves up, down or sideways in response to broad prevailing attitudes, producing a macroeconomic matrix taking into account the likely business cycle outlook, politics and the thousand internecine shocks that flesh is heir to, such as Obama’s socialistic scheme to trash free enterprise. The Ouija-like stock market sorts all this matrix out and then acts with what is considered to be a mind of its own.
Doesn’t that sort of give you a creepy feeling up your spine? On the other hand, sometimes I wonder if there are other twitchy fingers at work. Mostly Republican fingers. Perhaps the market marches to a far more simplistic drummer — one which plays a powerful paradiddle, engaging huge volumes of automated, programmed institutional trading.
This king-size institutional hanky-panky is leveraged even further by derivatives, derivatives based on still other derivatives (all of which amount to the placing of huge bets) creating an enormous volume of programmed trading, largely for the benefit of proprietary in-house accounts within the investment banks ranged around The Street like gamesters hunched over a playing board.
My suggestion is that the fingers in the Wall Street hood — just maybe — take the Dow up and down like a freight elevator or, to unmix the metaphor, all over the board like an invisible Ouija presence, moving that kidney-shaped index to “yes” (up) or “no” (down) according to the avoirdupois of their position sheets, which is to say their inventory of bonds, stocks and short positions. Meanwhile, everybody pretends that the market has a mind of its own. (And it’s being influenced by the Democratic administration, even though those twitchy unregulated fingers are devoted students of Rove and Norquist.)
In a daily ritual, the talking heads unfailingly announce the unseen forces that are moving the market — arbitrary as they are logical, and (although never convincingly consistent) in an inexhaustible stream: corporate earnings reports or the lack thereof, any gastric disturbance within the Federal Reserve System (or indeed dyspepsia on the part of its grand vizier, Ben Bernanke, at least until his term expires on New Year’s Day), interest rates, money supply, the wealth of nations (or the lack thereof), and any suggestion or hint of egalitarianism in the halls of government, which might faintly suggest a soupcon of socialism, which is to say anathema to, and a perceived impediment to, unbridled greed.
In short, a wall of opinion had been built last year at this time, to the effect that that nothing but doom and destruction could attend Obama’s second term,
Imagine our surprise at the double whammy of Obama’s re-election and last winter’s Pyrrhic victory, when a scrawny compromise squeaked through both Houses, saving Obama from a fate worse than death and actually making Boehner and McConnell look like stalwart losers.
A day later, astonished traders exclaimed, the mocket mocked the Chicken Littles in the shadow of Trinity Church. The Dow fooled all the sticky fingers by skyrocketing (a WSJ fave) 200 points. The only face saving at CNBC was that Maria Bartiroma called in sick. And it’s been boots and saddles ever since.
Robert Frost may have been a bit of a hayseed, but he got it right.