With regards to the great Irish songwriter Percy French for his comic ditty (tune here) which originally concerned the conflict between the Tsar and the Ottomans – and familiar to all true rugby fans in a decidedly more ribald version – a little seasonal levity regarding the state of financial markets and the very Austrian lessons to be drawn from the current turmoil. Happy New Year to you all.
O the seekers of Profit are brash men and loud
And quite unaccustomed to fear,
But the bravest by far in Connecticut’s crowd
Was Alpha the full Bull, all geared.
To respond to a clamour to go short of gamma,
Or to buy all the debt in each tier,
To turn Two-and-Twenty to personal plenty,
Your man’s Alpha, the Bull’s Bull, all geared.
But doubts were made plain that the source of his gain
Were not the decisions he made.
The one who blamed monet’ry settings insane
Was shrewd Malcolm McSteady McStaid.
This wily old fox had seen all this before,
Had survived more than one such â€˜New Era’,
Knew the end of the boom would entail certain doom
For Alpha, the Bull’s Bull, the gearer.
“The gains may come fleeter with lev’raged betaâ€
“And the prime broker’s sure to be paid,â€
“But the winner’s true share went to tortoise, not hare,â€
Cautioned Malcolm McSsteady McStaid.
Then Alpha shot back, “Poor old fool, what you lackâ€
“Is a grasp of why this is a doddle.â€
“It’s not Ã la mode to cite Graham and Doddâ€
“But a quant-designed, back-tested model.â€
“Once you have one of those, well, then anything goes,â€
“Your clients it’s easy to dazzle.â€
“The costs are so meagre, for bankers are eagerâ€
“To use you to circumvent Basel.â€
The elder man snorted and brokers he shorted,
Bought bullion, the bull run to fade.
“With markets this manic, we’re primed for a panic,â€
Forecast Malcolm McSteady McStaid.
Then those hedge funds of Bear all began to leak air,
And default protection got dear,
Making private banks wince at the trials of Prince
And of Alpha, the full Bull, all geared.
First the IKB shock, then a rush to the Rock,
From Rathgar to Riga a squeeze.
â€˜Gainst the run on the bank, Poacher-Gamekeeper Hank
Begged ex-clients their resets to freeze.
As the credit crunch spread, causing central bank dread,
Crafty Malcolm’s conviction grew clear.
It wasn’t the gospel of Herr Marcus Ospel,
Or of Alpha, the Bull’s Bull, all geared.
No, as markets got tight, pulled down high-flying Kites,
As equity buyouts decayed,
Stricken bankers implored all the sovereign hoards,
To please, forthwith, ride to their aid.
Malcolm knew what that meant, that too much had been lent
To those who could never repay.
So, with â€˜vigilance’ gone and the printing press on,
Stagflation must be on the way.
“I’m cashed out, I’m ready â€“ my nerve must be steady.â€
“My plans have been carefully laid:â€
“When the blood starts to flow, then aâ€“shopping I’ll go,â€
Twinkled Malcolm McSteady McStaid.
But what of that other, who’d arb out his mother,
Bold Alpha the full Bull, the gearer?
Did he once see the light, that old Malcolm was right,
That his ruin would ever come nearer?
As the boom turned to bust, did his dreams turn to dust?
Did he seek consolation in booze?
No, the beauty, you see, raking in all those fees,
Is that heads you win, tails you don’t lose!
Happy New Year to you all.