Authors

Economics

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.


[1] Six years ago there were evidently signs of retail recession. Happily, the central banks have solved all the world’s problems now.

[2] And there were also visible issues in property markets. Happily, the central banks have solved all the world’s problems now.

[3] And there were evidently concerns about unemployment. Happily, the central banks have solved all the world’s problems now. Apart from the (youth) unemployment rates in Greece, Italy, Portugal, Spain..

[4] Now FCA. Which sounds like a rude acronym even if it isn’t.

[5] With apologies to any Japanese readers.

[6] Plus ça change..

[7] Happier days..

[8] Can’t believe this was six years ago.

[9] The City has shed 100,000 jobs since 2007. That noise you hear is the sound of the world’s smallest violin, playing just for them.

[10] Credit ratings agency staff were never actually imprisoned. Or fired – from giant howitzers into the sea.

[11,12] Takes you back, doesn’t it?

[13] Clearly, they already have, and will continue to do so in perpetuity.

[14] For the West to re-enter recession in 2014 would be to imply it ever enjoyed a recovery.

[15] It’s no longer bank lending we should be worried about, but central bank lending.

[16] Gold stood at $802 when this was first written, versus $1200+ today. The death / irrelevance of gold has been somewhat overstated during the ‘Panic of ‘13’.

This article was previously published at The price of everything

2 comments to The Fright Before Christmas, revisited

  • Paul Marks

    In 2013 the United States was saved by the Sequester cuts in government spending – which, I confess, in 2012 I did NOT expect would happen (I confidently predicted there would be some squalid deal to keep the wild government spending going, leading to a fiscal and monetary crises – and I was WRONG). Just as with Warren Harding (the most under rated American President in history) cuts in government spending saved the day – at least for a while.

    However, now there has been a squalid deal (the Paul Ryan deal) so there will be no real Sequester cuts riding to the rescue in 2014 – and the Obamacare TAXES kick in also.

    As for credit bubble deficit Britain……

    2014 will not be a good year – and 2015 will be even worse.

  • Christmas Shopping helped Chinas exports greatly and added to our debts.

    I wish our One Great Peoples Party of post war consensus mixed and confused ‘I never saw it coming, Guv’ – (like Savill’s deeds), commercially convenient career economists, bureaucrats, bankers and their shop fronts, the Corporations, an even more prosperous wealth transferring year.

    For sure whilst a majority ‘believe’ in ‘luck’, ‘wishes’ and ‘goodwill and all the other surrogate forms of mysticism, this lot will have a free reign at the Till using logic, strategies and algorithms that as far as I can see have no such hinderances…