Cohan: Is 2008 Here?

Putin Origins, McCormick’s Last Days, Ellison’s Master Plan

Welcome back to the Daily Courant, your afternoon guide to the latest reporting at Puck.

First up, William D. Cohan explains why Wall Street’s slow-motion market collapse was 13 years in the making. And why, despite the multi-trillion dollar bloodletting in equities (goodbye, Bitcoin), the big banks are mostly breathing easy.

Plus, below the fold: Tina Nguyen reveals how David McCormick and Dr. Oz are flirting with mutually-assured destruction. Julia Ioffe unveils a heretofore unseen portrait of Vladimir Putin as a budding genocidaire. Eriq Gardner reverse engineers the SCOTUS leaker’s identity. And Teddy Schleifer plots Larry Ellison’s unlikely trip up D.C.’s greasiest ladder.

SPONSORED BY HULU

The Big One Is Here

If it looks like a recession, and smells like a recession, and the bond market is priced like a recession, then guess what: it’s here.

WILLIAM D. COHAN

There’s no denying anymore that the financial markets are in the midst of the long anticipated correction. The smart money around Wall Street has shifted from debating the possibility of an economic downturn to the question of its duration, and depth, and the possibility of timing the bounce and maybe figuring out a way to make money from it. It stinks, I know. Many novice investors who piled into the high-growth stocks in 2020 have no historical memory of a bear market, let alone a period of high inflation. But the past is never dead, as Faulkner said. It’s not even past.

Indeed, the D.N.A. of the current market meltdown can be traced back to the 2008 financial crisis. That mess, which wiped both Bear Stearns and Lehman Brothers from the Wall Street map—and probably would have cratered others had the federal government not intervened with a massive bailout—saw the Dow Jones Industrial Average peak at around 14,000 before falling to around 6,500, in March 2009. It was a nosedive of 54 percent.

By that decidedly unscientific measure, we would still have a long way to go before investors get back in the buying mood. Notwithstanding Warren Buffett’s first quarter purchases—loading up the truck on the stocks of Apple, Chevron and Occidental Petroleum, among others—it still feels a bit soon to believe the blood has been fully let…

CONTINUE READING ONLINE