The Fright Before Christmas, revisited

“One good thing about Christmas shopping – it toughens you up for the January sales.” – Grace Kriley.

We first published the following doggerel in December 2007. In the finest tradition of reheating old Christmas chestnuts, we publish it again today. With some annotations to mark the passing of six extraordinary years and, in some cases, no substantive change or progress at all.

‘Twas the fright before Christmas; the merchants did grouse [1],
Not a damn thing was selling, not even a house [2];
Restocking was futile with goods still on shelves,
And the streets were now teeming with unemployed elves [3].
The FSA [4] warned of a housing collapse,
An environment hitherto known just to Japs [5].

And Shanghai and Shenzhen encountered sharp falls [6] An ominous sign when east Asia appalls.
(Only Tesco [7] was thriving – and that was before
‘Fresh and Easy’ was launched – how Wal-Mart did guffaw.)
The bankers were choking on alphabet soup
Of CDOs, SIVs; all sorts of gloop [8].
Bond salesmen were sweating, awake in their beds,
With visions of dole queues [9] (and widening spreads).

In Floridian fund pools there was such a clatter
As portfolios blew up with foul fecal matter.
Their managers, much like their bonds, were distressed,
With the agents who’d rated them under arrest [10],
And the banks that had sold everyone down the river
Saw their equity ratios down to a sliver;
Man turned against man, and the brokers the same
Lashed out at their rivals (it was all just so lame):

Punk, Ziegel slashed Goldman Sachs, Morgan and Merrill,
And Bear Stearns [11] and Lehman [12] they did also imperil,
The markets a-brim with black swans and fat tails –
What happens when mania with credit prevails.
The quant funds were savaged as bell curves deflated
And CFOs had to be strongly sedated.

Will central banks save us [13]? The stock markets rally,
But interbank lending now feels like Death Valley.
The bulls now see good news in looming recession [14] But try to get upbeat about repossession.

The bank stocks are cheap now but could yet get cheaper
As retailers cower at the sight of the Reaper.
Diversification in assets should work
If lending conditions [15] continue berserk.

Some market neutrality also appeals
For when event-driven runs out of new deals,
And if the unthinkable does now unfold
There’ll be merit in silver and still more in gold [16].
Amid confidence crisis and capital flight
Happy Christmas to all, and to all a good night.

This article was previously published at The price of everything