Monday, September 15, 2008
Monday was certainly a day of observation and reflection. As one old-school Wall Street bank went under and another one was acquired, we are nervously awaiting the next chapters in the saga that this slowdown / crisis / meltdown / recession has become, while John McCain believes, that the economy is fundamentally sound. I am wondering how profound this decline will be and this little bit of info about 1929 spooked me out quite a bit: "The Dow did not return to pre-1929 levels until late 1954, and was lower at its July 8, 1932 level than it had been since the 1800s." Of course we have no idea if there two are comparable or not, but good to keep that in mind as a possibility, I suppose. I am also wondering what will be the impact on life in New York. The cynics outside of finance are experiencing a major case of shadenfreude after being priced out of every apartment, bar, club and restaurant in Manhattan by men in striped shirts; but I worry. Each job on Wall Street directly creates anywhere between two to four jobs in the city, not to mention the effect of big patches of wealth vanishing suddenly on real estate, tax revenues, services, etc. Will New York slump back into the 80s (e.g.. this) or will the purchasing power of eurotrash and petrodollars hold it up?