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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Friday, December 19, 2008

The Grinch Steals the Economy

Who says Wall Streeters can't laugh? Here is the annual poetic offering of David Resler, Chief Economist of Nomura Securities International, the New York outpost of Nomura Holdings, Japan's largest securities brokerage. I worked there with Dave for nearly 17 years to mid-2003. He and his family are parishioners at Grace Church, Madison, New Jersey.
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I have made it a holiday tradition to write a “review and outlook” for the economy set to the rhythm and meter of Clement Moore’s classic, “A Visit from St. Nicholas.” Under present circumstances, it also seemed fitting for my 25th rendition to draw on another Christmastime classic -- from Dr. Seuss.

’Twas the Night Before Christmas
(The Year of the Grinch)

David H. Resler

‘’Twas the night before Christmas, my shopping was done
I’d gotten great bargains, gee, aren’t low prices fun!
But less costly gifts are but small consolation
For my four-o-one K’s brutal devastation.

This year of o-eight ranks surely one of the worst!
It all started when the housing bubble did burst.
How could such a mess happen? And, who should we blame?
The fault lies with culprits far too many to name.

But my rhyme needs a villain, and for me that’s a cinch.
It’s none else but that vandal -- the nasty old Grinch,
Who’d slinked into town for some real mischief making
And our long expansion he planned to be breaking.

From that first day on, he was brewing up trouble,
Aiming his sights first on the housing price bubble.
So the Grinch posed first as a home mortgage lender
His too easy loan terms sent some on a bender.

Prudence and judgment the Grinch deemed simply passé
Neither income nor job would stand in his loans’ way.
For a Grinch-loan nothing had to be verified.
‘Cause in MBS bundles these risks would he hide.

When agencies scored these loan pools triple-A sound
Investors chased his high yields like fox-hunting hounds.
All this was part of the Grinch’s mean little scheme,
Popping the bubble, he wrecked the home owner’s dream.

With his handiwork done, the Grinch felt elated
He knew what came next as these assets deflated.
The fortunes amassed in the boom years just vanished,
And Wall Street’s wizards from their boardrooms were banished.

Then the Grinch plot did from Wall Street so quickly spread
As surging gasoline prices deepened the dread.
And though the oil price upsurge had no lasting cause,
It surely led soon to a severe spending pause.

When Lehman House failed and the markets did seize
Nothing the Fed did could halt the deep credit freeze.
Though the Treasury and Fed tried ev’ry trick,
Nothing could stop the markets from growing more sick.

There’s not any doubt we’re the grip of recession
That doomsayers warn we’ll lead soon to depression.
With bus’nesses shutting ’and big banks a-failing,
The Grinch felt pure joy and his spirits were sailing.

But that nasty old Grinch shall not our Christmas steal,
We’ll drive him from town or we’ll cut him a deal.
We’ll line up for some help from Tim, Ben and Hank..
We’ll use the might of the Federal Reserve Bank.

Since not all the problems are to Wall Street confined
Some fiscal injections too must now be designed.
The president in waiting has named his new team
And shown us the outlines of a grand fiscal scheme.

A middle class tax cut plays a very key part
In hopes it will give spending a hefty jump-start
On new infrastructure too much more must we spend
“This plan will bring” so he says, “this slump to an end.”

New regs for markets will stop all Grinch-like deceivin’
“This,” says Obama, “will be change you can believe-in.”

In the end we know too the Grinch will change his way,
So a brighter future will start this Christmas Day.


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