Would Wall Street really sell us that length of rope?

“The capitalists will sell us the rope with which we will hang them.”

So goes a famous quote often attributed to the original Soviet leader Vladimir Lenin. Watching Inside Job, this year’s Academy Award documentary winner, I was struck by the sense the film gives of profit and greed as forces so strong, they defy even self preservation.

Of course in the United States, we have apparatus like the SEC and the Treasury Department that are supposed to prevent or head off systemic instability that could threaten Wall Street, not to mention the entire economy.

In 2008, the country learned in terrifying fashion that such oversight wasn’t enough. Explanations have since swirled what exactly stemmed the crisis and how it could become so severe.

One popular conceit is that the financial system and the grave problems that began to fester within it became so complex, they simply eluded regulation and even the grasp of the very Wall Street firms that created them. Financial companies had spun a labyrinthine world of unforeseeable interconnectedness; companies became too big to fail because the products and services they provided bore too much of an impact on the health of other firms. If the government for instance would have let AIG go under, the countless insurance products it had placed throughout the financial system would be immediately worthless, leading to chaos and dealing a potential deathblow to other firms, like a line of dominoes falling one after the other.

It was as if the economy was a vast game of chess that somehow, in the heat of the action, had catastrophically aligned in a surprise checkmate.

Right leaning pundits will fault the government for trying to drive up home ownership through a host of programs and by allowing Fannie Mae and Freddie Mac to expand their mortgage lending activities. Such policies, these people say, ended up inflating the value of the housing market and enabled home buyers who had neither the financial wherewithal nor the proven fiscal responsibility to take on such an investment. Other economists will point to Americans, living high during the economic boom, as all too complicit in the rollback of credit restrictions, leveraging themselves to the hilt to draw increasing sums of disposable cash from the swelling value of their homes in order to fuel needless spending. While it’s alarming to think of the Wall Street firms who were securitizing bad mortgages, can’t some culpability also be heaped on home buyers who took out loans that, if they were to really assess their finances, would clearly see they could not afford to repay?

With that said, Inside Job presents a compelling story of how Wall Street, or at least several of the large financial institutions typically associated with it, were not only aware of the budding crisis, but recklessly helped fuel it. Goldman Sachs, the movie shows, sold subprime mortgage securities even after its executives knew they were toxic. Knowing that AIG could be in serious financial jeopardy, the company began to quietly buy large amounts of insurance against the firm and shorted many of the bad financial products Goldman was selling to unsuspecting customers so that it could profit on the inevitable collapse.

Confronted with Goldman’s activities at the government hearings held to investigate the crisis, Lloyd Blankfein, the company’s chief executive, could only squirm to deflect his glaring culpability.

“What do you think about selling securities that your own people think are crap?” A senator asks. “Does that bother you?”

“Is that a hypothetical?” Blankfein responds.

“No this is real,” the senator snaps.

Meanwhile the film shows startlingly how infiltrated Washington and financial regulatory agencies are with former Wall Street executives and staff who have their hand in the Wall Street till. Larry Summers, a chief policy advisor to President Clinton and Obama, received $20 million the movie shows from a hedge fund that was involved in derivatives, one of the financial products that caused the crisis. Even academia, which publishes influential papers on the financial system and vouched for the safety of ultimately disastrous financial products, is on the Wall Street payroll. In one scene Charles Ferguson, the maker of the documentary, asks an academic if he could see the same conflict of interest between a doctor prescribing medication made by a company for which that doctor acts as a paid consultant and professors who write papers paid for by Wall Street. Like Blankfein, a stutter of half hearted logic and evasions ensues.

Wielding so much money and influence, Wall Street has, since the 1980s, rolled back financial regulations such as what leverage levels it could take on. Products like derivatives, which some knowledgeable financial experts the movie shows had long identified as potentially devastating magnifiers of loss in the event of a financial meltdown, were kept unregulated and allowed to proliferate. When the crisis hit, many financial firms, like Citigroup and Morgan Stanley and even healthier firms like Goldman and others would have likely joined Lehman Brothers in bankruptcy had it not been for various government emergency lending programs, which propped up the companies when credit came to a near freeze.

If these companies perpetrated their financial misdeeds with an understanding that they might have been destabilizing the entire system - as the movie suggests they did - why didn’t some element of self preservation blunt their activities? In essence, why didn’t the capitalist system modulate itself as proponents of deregulation like Alan Greenspan said it would?  Did many Wall Street firms realize nefariously that they had essentially hijacked the economy and that government would hence have to come to their aid? In essence, did these firms realize early on they were too big to fail and that their friends in the regulatory system would bail them out both out of allegiance and necessity? With Goldman, the film notes, Tim Geithner, acting as the head of the Federal Reserve Bank of New York and then later the Treasury Secretary, allowed that financial company to be repaid 100 cents on the dollar for insurance payouts it was owned by AIG after the government took over the insurance company. That Geithner didn't arrange a discounted payout brings into question both his judgement and his loyalty.

Lehman was allowed to collapse. But then the consequences of its downfall were what helped accelerate or even precipitate the crisis in the first place, so perhaps that firm would have been saved too if had been able to hold on until all of Wall Street was in the same boat.

One of the most infuriating points that the movie makes is that the perpetrators of the financial crisis were able to vastly build their personal wealth even as their companies and the economy eventually crumbled around them. That same detachment from the eventual downfall was evident on a systemic basis and was one of the chief moral hazards that drove the crisis. Firms that originated subprime mortgages and other debt for instance sold them off without a care whether those loans would actually be paid back. It was some one else’s problem. Ratings agencies like Arthur Anderson before them, gave a false sense of confidence by awarding highly risky bonds with high credit certification.

At one point in the film, Dick Fuld, the chief executive of Lehman, explains that his firm paid for its risk taking by going under. But Fuld, one of the most despicable culprits of the financial crisis, made about $500 million in compensation during his tenure. Angelo Mozilla, the head of the mortgage originator Countrywide, another culprit, made almost as much. Neither of these men have had to give back a penny in earnings. Essentially, the compensation structure on Wall Street incentivized immediate profit making without regard for the long term consequences of those strategies. Neither Mozilla nor Fuld will have to face any criminal charges for their role in the meltdown. If men like these had to face real punishment, even the hangman say, maybe then would we get to see if they would sell us that length of rope after all.

At David Burke's New Restaurant I'm Bananas For The Monkey Bread

If David Burke’s eponymous new downtown restaurant, David Burke Kitchen, suggests anything in the simplicity of its title, perhaps it’s that its menu will deliver the hallmarks of Burke’s style.

Burke has made a career of concocting eclectic, even whimsical fusions of flavor, transforming familiar dishes and sophisticating comfort foods into the exotic and gourmet. David Burke Kitchen, with its desire to fuse country chow and fine dining, should have given Burke the perfect forum in which to test the bounds of his creativity and complexify the straightforward.

The restaurant, in the basement of the newly built boutique hotel The James New York in Soho, suggests its mission in the aesthetics of the space alone. Reclaimed barn wood planks angled like a gently sloping inverted boat’s hull form the ceiling of the dining room and large canvas photographs along the perimeter of the space display what servers will tell you is the restaurant’s principal distribution chain: a flanneled farmer, rubber-overalled fisherman clutching lobsters, and a white smocked baker standing in front of his ovens, among others.

Burke uses locally sourced foods whenever possible and maintains a connection with the people and facilities that produce them in a way that is supposed to promote both sustainability and a supply line that one would assume is most conducive to freshness and quality. David Burke Kitchen also features rustic ingredients that ooze its countryside motif, items like various pickled stuffs and root vegetables and, at least in the cases of small dishes and snacks, cute little glass serving containers on gingham check napkins that look straight out of a rural pantry.

This being Burke however, an appetizer of beef tartare is done with bison instead and blended with egg salad, smoked tomato and fingerling crisps. The restaurant’s visually striking crab cake, also on the starter menu, stows rich crab meat inside a rectangular log cabin of pretzel sticks. Salmon pastrami, which is part of a short list of snacks, fits in with other tongue in cheek, gourmet odes to comfort food, a tasty morsel of pleasantly oily salmon jerky rolled in spices and wrapped around a pretzel stick. Herbed mack and cheese employs duck ham. All accomplish the somewhat amusing trick of approximating their inspiration using a palate of higher order flavors.

Still some of the dishes fell short, which seemed especially disappointing given the potent promise of Burke’s unusual pairings. Idaho trout with leeks, grapefruit and sour carrot sauce for instance got its main kick from a sparse sprinkle of fried olive crisps flanking the fillet and a thin slick of citrus flavored sauce wiped on the plate.

So it was with the crab cake, which also had a dribbling of zesty syrup at the corners. In that dish, the pretzel sticks, which had worked well with the pastrami salmon, felt underpowered as a core component of something that should have been more substantial. Why did Burke in this instance shy away from the rustic heartiness that this eatery would seem to want to embrace and use a more flavorful pretzel such as a sour dough instead of sticks that reminded me of the boxed variety I used to receive as part of my school lunch in elementary school? Probably because it would have subtracted from the dish’s dramatic presentation, which suggests an unfortunate preference for style over substance. Ground up pretzels would have also amalgamated better with the crab meat creating the bready richness that one expects from the dish. Another appetizer of baby octopus also seem disjointed, the bland tasting crustacean plopped on top of a mix of garbanzo and black beans doused in a yogurt sauce, a bed that was tasty and yet had the feel of being irrelevant to the centerpiece of the dish.

In short, Burke’s flavors reside too much along periphery, elusive concentrations of the sweet and savory that should be featured in more abundance and that, in many cases, should better compliment the headline items on the plate. A dinner special of lobster risotto for instance (lobster is featured as a special every Thursday) included an abundance of meat but left it naked on top of the garlicky risotto. Credit should be given to Burke for not over-salting his food or obliterating its nuances with overpowering sauces and spices, but that is no excuse either for blandness.

Burke’s deserts are a whole other story. Ever conscious of the element of presentation, our excellent waitress urged us to order monkey bread, a cake made of balls of dough that are sandwiched together and topped with pecans and slices of banana underneath a candy sugar glaze. It is served with an impressive compliment of fresh whip cream from a metal urn, caramel sauce, and vanilla ice cream. Here, finally was a dish whose constituent flavors and textures, when blended together, achieved devastating heights, triggering an almost insuppressable urge to gorge. The cake itself reminded me strongly of french toast my grandmother used to make from thick slices of Challah bread, a pleasing contrast between a crispy exterior and soggy gushiness inside. It was a good thing that Burke’s entrees tend to be modestly portioned. The monkey bread comes in a large tin and though the menu says it’s enough for two, it probably could serve double that, which, if you are just a couple, leaves enough for seconds and yes, even thirds.

Fashion Week is great... no really it is

Why don’t more men go to fashion shows?

Picture formations of stunning women parading backstage, changing with little regard for privacy and without even a hint of self-consciousness. Maybe such superficial concerns always melt away in the frenzy of preparation for the runway's glare. Or maybe those are merely the hang-ups of ugly people, or normal looking people, who compared to these superhuman people don’t look normal so much as ugly.

The models you encounter at a fashion show are like gazelles, with torsos so thin and legs so endlessly long, they seem to bounce on air, their backs arched in the signature concavity of a runway strut from thrusting their hips so far forward, utterly weightless, which, come to think of it, is probably not too far from the truth.

Yeah I know the common complaint among men. I’ve got plenty of friends who say they like their women with curves, that Kate Moss and her skeletal ilk are about as attractive as lampposts. These are the guys who have never stumbled under the circus-like tent of a show during fashion week and beheld the electric beauty of what looks like a sublime eugenics experiment.

Last Friday I had the privilege of attending the Nicole Miller show at Lincoln Center. Yet for all my excitement I found myself quickly bewildered by the chaotic scene of fast paced preparation.

Squinting my way through a thick cloud of hairspray, I stumbled into Kevin Ryan, the head hair stylist for the show, who was busily putting what appeared to be the finishing touches on one of the models. Her hair was similar to the look he had created for many of the others, parted down the middle and held back with small clips and prodigious amounts of styling gel and spray so that it fell behind the shoulders. It looked good, but what did it all mean?

“Rock and roll is the theme,” he told me.

Ryan, his own hair tied back in a ponytail, seemed to handle the pressure well, engaging in small talk even as he worked fastidiously to put on the finishing touches. He asked me how old his 14-year old daughter, who was standing by his side observing the action, should be before he allows her to start dating. Caught in such an obviously unwinnable position I quickly deferred to his judgment.

“18 it is,” he said, eliciting a look of disappointment from his daughter.

No wonder he felt comfortable bringing her to the show.

In the large changing room, where the models would soon exit onto the runway in front of a packed audience, the show’s designer, Nicole Miller, hovered.

“I did have the whole kind of glam rock theme going,” Miller said. “I didn’t want the girls to look sweet. I started with kind of a minimalist art idea and put a glam rock spin on it. Sol LeWitt meets Ziggy Stardust.”

But what I really wanted to know was how come more guys weren’t trying to infiltrate. I mean you see these girls in the subway and it's like sighting some rare animal. Look there she goes! Getting off at 66th Street. See I knew she was a model! And now here they are, one ten out of ten after the next. 

“I used to have a pack of guys I would try to sneak backstage,” she said. “They don’t let them in anymore. Once the models start undressing, the guys have to go.”

They didn’t seem to care when I was there.

Death of a F***ing Salesman

For years I’ve worked as a reporter covering the commercial real estate industry and so it hasn’t been without some embarrassment that I’ve been forced to admit I still hadn’t seen Glengarry Glen Ross, what has become something of a cultural touchstone for the profession, for better or worse.

During a recent conversation with a broker, he referenced how his new firm provided him with enhanced connections to clients and articulated the magnitude of that advantage by referencing how “leads” were a central, obsessive focus for Glengarry’s characters.

“Remember Glengarry Glen Ross?” he asked.

“Yeah,” I said vaguely.

“It’s all about the leads.'You got the leads? Who’s got the leads?'” he went on. I knew he was quoting lines of dialogue, or trying to.

Another broker I spoke with brought up the movie when expressing the disgust that society holds for his ilk. He blamed the film for presenting, or at least reinforcing the stereotype of brokers as sleazy, schlocky salesmen whose spiritual death spiral is either hastened or entirely brought on by their profession.

I guess it was time to finally see the film...at least so I won’t have to quickly shift subjects the next time it inevitably comes up. This time, when it does, I'll be sure to ask whoever it is about their favorite scene. Even if you didn’t connect with the film, you must remember a number of its characters’ tirades. The expletive riddled denunciations and insults that the film’s characters hurl at each other hold their own against other movies that feel close to it in theme and style, like the borderline sociopaths Neil LaBute sets loose in a classic like In the Company of Men. Glengarry Glen Ross's memorable dialogue and the spot-on performances by its star-studded cast are probably why the movie holds such a hallowed place in brokerage lexicon, even though in so many ways it seems to indict the profession. It's a phenomenon similar to the way that Gordon Gekko made the morally repugnant creed “Greed is Good” a proud slogan of investment bankers.

Most of the action in Glengarry Glen Ross is centered in the dingy office of a real estate brokerage in Sheepshead Bay, Brooklyn. Shelley Levene, played by Jack Lemon, is in a worrying bind. In an advanced stage of his career and with a sick daughter he speaks quickly with on the telephone at the start of the film, he’s locked in a dry spell, although one does wonder if he ever experienced any form of real success or whether his recollections of past accomplishments aren’t just delusions and exaggeration. Mitch and Murray, the unseen owners of the firm, have sent Blake - depicted in all his bull-like glory by Alec Baldwin, part intimidator and drill sergeant with a sprinkling of motivational speaker - to relay to the firm’s four brokers that only the top two of them will be kept on at the end of the month.

“What’s your name?” Dave Moss (Ed Harris), the hothead of the group – if one character gets to own that distinction among this volatile, profane lot – asks challengingly.

“Fuck you. That’s my name,” Blake responds. One of the film’s many classic lines. “You drove a Hyundai to get here tonight. I drove an $80,000 BMW. That’s my name.”

High level.

A desperate night ensues as Levene kicks into overdrive to try selling what are likely worthless plots of land in places like Florida and Arizona and Moss fumes and schemes with fellow broker George Aaronow (Alan Arkin), devising a plan to burglarize the sales office and make off with a stack of promising leads that are being carefully guarded by the office manager John Williamson (Kevin Spacey). Levine toils away, dripping wet in a driving rain, rattling off canned pitches in phone booths that are bathed in the stark neon lights of a grim, unforgiving city. In the commentary, the film’s director James Foley said that he chose a bright color palette to enunciate the primal underpinnings of the story’s theme. According to him, in every scene, these men were fighting for their lives and an almost surreal moment when Lemon stands in a phone booth awash in luminescent water was an “image of the heavens weeping.”

Dramatic, yes, but this is Mamet's screenplay afterall.

Plush reds dominate a Chinese restaurant around the corner from the sales office, where Ricky Roma (Al Pacino), the outfit’s most successful broker, spends the night reeling in a buyer with seeming effortlessness. But by the end we see the pathetic manipulations to which he will stoop in order to hang onto the modest sale as it begins to unravel. Salesmanship, at least among these men, is little more than a confidence game, disconnected from morality and driven by hand to mouth urgency.

In the commentary, Foley likens the men to animals.

“I thought of the film as animalistic, every being on screen is an organic beast and animal that is trying to survive and do what it has to do and morality is a secondary issue,” he says.

The ABCs of brokerage according to Blake are simply “Always Be Closing.”

The film, according to repute, was nicknamed “Death of a Fucking Salesman” by the cast for the way it fits in as an update of the Arthur Miller play, laced abundantly of course with profanity. Though it’s been some years since I’ve read or seen Death of a Salesman, things would appear to have gotten a lot worse in the sales business if one was to just compare the two stories. 

In Death of a Salesman, Miller at least seems to offer the audience an idea of what mistakes, delusions, and moral lapses derailed Willy Loman’s life. Mamet doesn’t have his characters engage in much reflection or offer them much of a chance at redemption.

Shelley Levene, destined for failure, never achieves or even seeks out any state of grace. When he momentarily gains the upper hand late in the film, he can only think to pettily berate Spacey’s unsympathetic office manager for a few fleeting moments of gratification and revenge before the circumstances again abruptly shift out of his favor. It is then that he offers up his daughter’s illness as a last ditch plea for mercy. Instead, we feel the final nugget of sympathy we may hold for the man flicked away. 

I may not have loved the film for its failure to redeem any of its protagonists, but at least now I know why so many brokers can’t forget the film...and why so many want to.

Starting Out!

I’m Dan. I’m a reporter in New York City and these are some of the things I like: writing, film, politics, raw foods, hiking, investigative journalism, planning mountaineering trips (both actual and fantasy), good craft beer, and TopMan. As a writer in 2011, it’s pretty much a requirement to have a blog – and I sort of wanted to start one anyway – so here I am. I plan to write about some of my aforementioned interests, and hopefully there’ll be some of you out there who like to hear it. Here’s to blogging – more to come.