Sunday, December 23, 2007
With only two days to go until Christmas, the rush to lock up presents for friends and loved ones has reached a fever pitch. So, too, in the North Pole, where rumour has it that Santa is putting in 22-hour days in a last-ditch effort to allocate presents to boys and girls all over the world.
He's had a particularly tough load this year, as new Human Resources guidelines have mandated a policy of non-discrimination in the awarding of presents, meaning that Santa has to give a prezzie to everyone, whether they believe in him or not. And both HR and Finance have nixed coal in the stocking as an option, the former because of sensitivity issues and the latter due to cost. As for the price of year-round fodder for flying reindeer...if Santa's hair weren't already white, it would be now.
Anyhow, Macro Man has a buddy from college working in the Treasury Department of the North Pole. This old chum sent him a few finance-related highlights from Santa's list this year; Macro Man is sure you'll agree that even with Santa's increased workload, the old boy hasn't lost his touch. Among the notables on the list include the following:
Jimmy Cayne- Dazed and Confused DVD. Richard Linklater's 1993 comedy is a perfect present for the Bear Stearns chief executive. Not only will it cheer him up as he contemplates the year that was 2007, but he'll also learn some valuable and interesting historical facts. Some might argue that the title is also an apt description of Mr. Cayne's performance over the summer as a couple of high-profile Bear hedge funds imploded.
Mervyn King- How to find work when you're over 50: Make the Most of Your Maturity and Experience to Find the Right Job.
Six months ago, Mr. King's re-appointment as Governor of the Bank of England next year seemed like a formality. Now, after a rapid about-face and a bungled bailout of Northern Rock, it's far from certain that Swervin' Mervyn will be in the Threadneedle Street hot seat this time next year. Should Mr. King need to find an alternative line of employment, this present should come in handy.
John Mack- Executive membership at Costco. After Morgan Stanley's 4th quarter shocker, Mr. Mack has declined to pay himself a bonus for 2007. While this is certainly a worthy gesture, it does leave Mr. Mack rather in the hole, with a lifestyle that in all likelihood costs more than his month-to-month paycheck. What better present, therefore, than an executive membership at Costco, which will allow the Mack household to enjoy great deals on thousands of products, thereby cutting back on their cost of living during this difficult time?
Ralph Cioffi- How to Win Friends and Influence People.
Mr. Cioffi, manager of the aforementioned Bear Stearns hedge funds, could do with a little popularity these days. Not only is his name mud amongst all who got carried out in the structured credit debacle, but he's now out of a job and under investigation for his conduct during the funds' demise. Apparently, Santa also considered giving Mr. Cioffi a copy of "Things Can Only Get Better" by D:Ream.
Mark Carhart and Ray Iwanowski- A model of KITT. The Goldman Global Alpha managers have had rather a spot of bother with their quantitative process this year, so what better present than a model blessed with artificial intelligence that can think its way out of danger and is charged with protecting its operator?
Jean-Claude Trichet, "Sex Packets" by the Digital Underground. No, this isn't what you think it is- that's what Nicolas Sarkozy's getting. Rather, it's an old school rap disc from a late 80's one-hit wonder. For a central banker perturbed by a "hump" in inflation, what better present could there be than an opportunity to do the Humpty Dance?
Ben Bernanke- "The Inflationary Universe" by Alan Guth. As an old academic, Mr. Bernanke is undoubtedly fascinated by the inner workings of the universe. Mr Guth created the theory of "cosmic inflation", in which the size of the universe expanded with extraordinary rapidity immediately after the Big Bang. Sort of like what happened to headline CPI after the Fed started cutting rates in September.
John Paulson- Bugatti Veyron. Paulson and Co. have been among the more high-profile winners in the subprime credit debacle, so Santa has decided to reward him. And what better present for a successful hedge-fund manager than the world's fastest and most expensive sports car? Plus, given that the Veyron averages less than 6 mpg in urban driving, it requires a paycheck like Paulson's to be able to fill 'er up.
SAFE- "Caveat Emptor" by Ancient Chinese Secret. Apparently, Santa doesn't know anything about either the album or the band. But for an organization that holds nearly 1.5 trillion dollars and continues to buy billions per month, Macro Man is sure you'll agree that it is an apt gift.
Brad Setser- Full developing-country reserves disclosure in the IMF COFER data and good capital flow data from the UK. That way, we'd finally know with relative certainty what's going on. Then again, given that timely and accurate data of this nature would eliminate the demand for one of Brad's "niche products", it's probably just as well that the elves have already misplaced this one.
Readers of this space- A healthy and prosperous 2008. 'Nuff said.