I clicked the dial over to Financial News Network, FNN, which had momentarily interrupted its heavy midday fare of California snake-oil-and-options hucksters. Now a decidedly pale investment banker, this one an unindicted employee of Drexel Burnham, was declaring it was all merely a little "tempest in a teapot." His precise words. The Japanese securities houses wouldn't dare pull out their funds and kill the market, he explained. It was absurd. If they did that, their investors would lose a fortune, since any big sell-off would automatically drive down the value of their own massive portfolio. Ergo, Japan's funds had no choice but to stay invested. No problem.
My friend, I thought, where have America's bankers been? Out repossessing some widow's Chevy? As a matter of fact the Japanese outfits here don't give a flying fig what happens to our debt market. If you'd been doing your job, you'd know that Matsuo Noda had already sold Treasury futures far in excess of Japan's portfolio back when values were still high. Now he can go out and pick up all the notes and bonds he wants, cost approximately nothing, and turn around and deliver them at yesterday's full price. The man must feel like a riverboat cardsharp who's lucked into a saloon full of Huck Finns on payday. Don't you realize he's just cleaned you out, right down to the fillings in your teeth? And now he's got his team on the bus ready to roll.
Over to CBS, a Special Report underway. It featured a stream of well-meaning and incoherent Treasury officials, none of whom had the slightest inkling what to say. Then Jack O'Donnell came on from the Senate pressroom, breathing fire. The administration's "light at the end of the deficit tunnel" had turned out to be a freight train heading our way, just as he'd predicted. America's debt chickens were coming home to roost. He was demanding that the Speaker call a joint session of Congress this very day and by God do something.
Right, Jack. What? Looks like our pal Matsuo Noda is about to have the U.S. of A. exactly where he wants us. By the balls.
I guess I must have been operating solely on instinct by then, because a phone number popped into my head that I hadn't recalled in years. Sam Kline, my old broker at Merrill Lynch. I hadn't talked to Sam in ages, but his number used to come to my fingers whenever the market started acting up. Maybe he was sort of a father figure. Truth is, I'd first learned what little I know about the market watching that giant ticker ML had up at one end of the office just above Sam's desk—and long gone in this age of computers. I remembered how heavy trades—over ten thousand shares—were marked with stars, always fun to watch.
Forget the "financial experts." They were reduced to spouting pure gibberish. Time to check in at the real front line. Sam Kline.
Maybe I just wanted to have Sam to soothe me like in the old days, pour some of that dreadful coffee he had in his Thermos, tug down the cuffs of his trousers, and say not to worry, there's always tomorrow, the disaster in my portfolio merely reflected a long-overdue and healthy "correction" in the market. (Only years later did I finally realize that "correction" was a special Wall Street expression meaning all the stocks you own just tanked.)
When Sam finally got around to my call, he was barely coherent but still trying.
"Matt, what's new?" There was turmoil and yelling behind him, as though the office was about to go under a wrecking ball.
"You tell me."