Earlier today we mentioned a legal battle between a nineteenth century gossip rag called the Flash and a stock-broker named Myer Levy. It seems that Levy's good looks, or perhaps his reputation for whoring, led to him being nicknamed "the Adonis of Wall Street."
That's definitely a nickname that deserves to be dusted off, as one of our commenters pointed out. So who should be the new Adonis of Wall Street? Earlier votes have already been cast for Jamie Dimon, whose success at running JP Morgan Chase and Greeky good looks have many women on Wall Street rating him as crushtastic.
Long before DealBreaker came along to supply your Wall Street gossip news, there was the so-called "flash press," rag paper weeklies published for a few years in the 1840s specializing in suggestively lascivious subjects, Wall Street sex scandal, fallen women and descriptions of bare-knuckle boxing. The greatest of these, according to the New York Times Book Review, was "The Flash," which was published by William J. Snelling (who would go on to become the publisher of the Boston Herald) George Wilkes (a nineteenth century socialite) and George Wooldridge (who ran the Elssler Saloon at 300 Broadway).
They got themselves in a bit of hot water, however, when they took on Myer Levy, a prominent Wall Street banker who was sometimes called the "Adonis of Wall Street." Myer, the Flash claimed, was a "practical amalgamationist" because of his alleged affinity for sex with women of color.
As it turns out, fighting, whoring, Wall Street mischief and scandalizing tabloids are not recent inventions.
As regular readers know, we've got a thing for Wall Street history. So we're really glad that the kids over at Portfolio put together a wonderful interactive feature detailing what happened to some of the once powerful and now vanished Wall Street firms.
We’re apparently meant to understand that the worst of the credit crisis is over, or nearly so. Federal Reserve chairman Ben Bernanke says the markets are “far from normal” but reassures us that the smart and caring gentlemen at the Federal Reserve stand ready to increase its auctioned funds. Banks have started to lend to each other at more gentlemanly rates, narrowing the spread between inter-bank lending rates and Treasuries. All of the big wigs on Wall Street—the kind who get invited to luncheons with Bernanke—have said that we’re finally, or nearly, out of the dark woods we entered sometime last year.
What certainly seems to be passing is our very brief age of anxiety. Those who have been predicting national disaster are a bit quieter. Even the worst fears of inflation resulting from the extraordinary rate cuts from the Federal Reserve seem to be receding with the expectation that interest rates will soon enough—perhaps by year’s end—begin climbing once again. Oppenheimer’s Meredith Whitney says there are more losses to be booked by brokerages but, by the logic of contrarian investing, the attention her every pronouncement gets is an indicator that there is little investment value left in shorting these institutions. This morning on Squawk Box even Jim Chanos, the notorious short seller, indicated that he might be backing off short positions in the financials.
There’s something unsettling about how orderly this has all been. How have we passed through what many have described as the worst crisis in American finance in recent memory with so little blood spilled on Wall Street? That question may seem crass to investors in Bear Stearns, to the holders of still frozen auction rate securities, to the legions of laid-off investment bankers. But the layoffs from this crisis have not come close to those we saw when the tech bubble popped. The holders of auction rates and even Bear Stearns shares have not experienced the pain of investors in the dot coms. To paraphrase a former Kansas senator, “Where's the panic?”
Let's take a step back from the Fed and stock markets for a moment to reflect on some history. Joe Flaherty was a legend in New York journalism. Drink was his muse, words his first love, and telling the truth his only paying talent. Of course he started his career on Wall Street. He began as a "squad boy" on the floor of the New York Stock Exchange, where his job was to take recorded sales and send them up a pneumatic tube. It didn't last long.
Here's Joe describing his short stint on the floor in the late 1940s:
"Every morning I flew up the subway stairs at the Wall Street stop, sporting my Billy Eckstine-collared shirt and looking like a Dow-Jones Dumbo. Everything went quietly at first—tragically, too quietly. There were a couple of minor skirmishes with summer-working college boys who made remarks about my shirt or one of my ever present pocket books they dared put the knock on Mike Hammer!). The latter worked to my advantage, since one of my critics goaded me into reading James Jones From Here To Eternity, and a new world opened for me. But alas, enough was not going on. Even employing the fantasy of a wing commander sending endless bombers airborne didn't stem the ennui. So games had to be devised. The favorite was to write a bogus sale on a piece of paper—usually 2,000,000 shares of GM at 60 3/4 –and pass it to the new squad boy to skyrocket up the tube. Nobody ever fell for it till one day I found a true believer who sent GM soaring. I was fired immediately and walked to the subway hugging the building to avoid being flattened by leapers."
Fifty years ago today, paratroopers from the 101st Airborne Division escorted nine black students the the doors of Central High School in Little Rock, Arkansas. As Shelby Steele points out on the editorial page of the Wall Street Journal today, the events in Little Rock in 1957 had a dramatic impact on the way the nation thought about segregation, integration and civil rights, in part because of the effect of television. The events were broadcast live across the nation, and watched by something like 100 million viewers.
It was, for instance, the first time that our military leaders had ever looked directly at troops in action over a field commander's shoulder nearly a thousand miles away. And, for many on Wall Street, it seemed to bring them into direct contact with the realities of segregation for the first time. “People on all sides of the civil rights issues in 1957 were shocked by the sight of white mobs and the Arkansas National Guard, under orders from Governor Orval Faubus, blocking nine black children from entering the city's Central High School,” Juan Williams writes in Time Magazine.
The last time we checked in with Foster Winans he was arguing for repealing the insider trading laws. Winans, you might recall, is the former Wall Street Journal reporter who was charged with insider trading for tipping a stock broker off about items that would run in his “Heard On The Street” column. As we noted in March, Winans broke new ground in insider trading, more or less inventing an entirely new way to trade on insider information.
So what’s Winans doing these days? The latest issue of Fortune tracks down a dozen or so headline-makers from years past. Foster, it turns out, is living back in his hometown of Doylestown, Pennsylvania, where he makes a living ghost-writing books.
Foster isn’t shy about his opinions of our insider trading laws. "Maybe it's time they just made it legal. I'm only half-kidding," he tells Fortune.
A little over a month ago, Winans actually stopped by DealBreaker to drop us a comment on insider trading. “There is much more to be said but the one aspect that seems to be overlooked about this issue is that there is rarely a situation when someone can know 100% that inside information is going to make them money,” Winans wrote. “One could "know" that a bid is coming for TXU, but there is market risk, industry dynamics, and a host of other variables.” He recommended readers check out the writings of former Libertarian Party presidential nominee Harry Browne.
If you’re anything like us, you may have forgotten that Scooter Libby has a connection to world of high finance. Too many bottles of Chateau Mouton-Rothschild will do that kind of thing to you. Someone called Libby was convicted yesterday for something involving the CIA, the Bush administration, Iraq and Robert Novak. Or something. We get that kind of news from the Daily Show. Everyone was talking about it at dinner last night, which we just took as an opportunity to drink more of the wine.
But this morning, as our hangovers cleared and we said farewell to our dinner companion, we started to remember the name Scooter.
Scooter!
He was the lawyer for Marc Rich. Along with his partner Pincus Green, Rich was convicted of tax-evasion and illegal trading with Iran after a successful career as commodities trader and real estate developer. And the prosecutor on the case was none other than a Wall Street mob-busting, Miken and Boesky convicting, US Attorney named Rudy Giuliani. (Who later turned around and wound up owning his own investment bank, recently sold for gazillions as he prepares to run for president.)
Green and Rich (the very names evoking envy and wealth) both fled to Switzerland prior to their conviction, of course. Rich and Green were later pardoned by President Clinton (while several lesser-known accomplices served out there sentences). From 1985 until the pardon, Scooter represented Rich.
Yes. That’s how long it’s been since Alan Greenspan sent the markets tumbling with his mention of “irrational exuberance” (a tip of our hats to Eddy Elfenbein for the reminder).
Here are the words that sent panic waves through the hearts of many:
Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.
That’s it. We didn’tremember that it was phrased so mildly, and even put in the form of a question. At the time it didn't seem mild. In fact, in 1996 it came as something of a shock. Of course, it was a temporary shock and we remained exuberant for a least a few years more, in part because despite the talk of irrationality the Fed didn’t do very much to restore rationality.
You may have noticed that we’ve got a thing around here for old school Wall Street firms and images. The scenes from the trading floor—with ticker tapes and punch buttons—in this old advertisement for Shearson Hammill, one of the ancestor corporations of today’s Citigroup, are beautiful. And especially worth watching as the NYSE pushes even further down the road of electronic trading.
Fifty years ago today, paratroopers from the 101st Airborne Division escorted nine black students the the doors of Central High School in Little Rock, Arkansas. As 
The last time we checked in with Foster Winans 
If you’re anything like us, you may have forgotten that Scooter Libby has a connection to world of high finance. Too many bottles of Chateau Mouton-Rothschild will do that kind of thing to you. Someone called Libby was convicted yesterday for something involving the CIA, the Bush administration, Iraq and Robert Novak. Or something. We get that kind of news from the Daily Show. Everyone was talking about it at dinner last night, which we just took as an opportunity to drink more of the wine.
