Vic Socotra

26 September 2008

Mad as Hell

The Corner at 23 Wall Street, circa 2004

Yesterday, I heard the corporate end of the McDonald’s food enterprise was having a hard time securing loans. Later in the day, the Feds showed up in person to pad-lock Washington Mutual, and largest savings and loan instution in these United States. The assets on the books were sold to JPMorgan Chase & Co for $1.836 billion.

The haste with which this was done suggests someone had been thinking about it for a while.

I’m mad as hell, but I expect I am going to have to take it, just like you are. Those bastards stole from us, and now they are blinking in the light and looking mildly embarrassed that they got caught. They are lucky we cannot get our hands on them.

I have friends on both ends of the political spectrum, some so far to the extremes that they come around on the other side. They are mad, too, some of them muttering things that sound a lot like what you might hear in a crowd on the verge of becoming a mob.

We have all worked, all out lives. None of us are what you would call wealthy. You might better call us reliable. As a group, we have normally stepped forward to do what was necessary when the bills came due- kids, country, spouses old and new.

We always made the mortgage. We always paid the taxes when they were due. Now, we are supposed to bail out the scoundrels and the deadbeats to save the system.

Those bastards sold us all down the river. Some of them have got to pay.

The talking heads finally seem to be getting their heads into the game. I got back from a dinner meeting last night and clicked on the Beeb, and Bush House in London was broadcasting a panel discussion from some of the erudite and ironic personalities who populate parts of the last empire.

Everyone is pretty irritated with Wall Street, and by implication, with me and you, even though we didn’t have much to do with the orgy of greed that got us here. Ouch.

The continuing crisis isn’t the first time people have been really cranky with Wall Street, and I suppose we should be grateful that the financial district only has major attacks every few years.

In our lives there were the two attempts on the World Trade Center, the latter becoming the most visceral series of images in history.

Those were certainly not the only such spectacles in the last century of Bears and Bulls.

JP Morgan, the Last Bank Standing in the current mess knows that perfectly well. The long series of mergers and acquisitions that resulted in the entity we know at Morgan Chase started with Aaron Burr and some other colorful rogues at the dawn of the Republic. They played fast and loose with the rules to build their fortunes. By the time J. Pierpont Morgan was running the place, he had more power than an earthly prince, and his company built a magnificent structure right across the street from the Stock Exchange.

It is low and powerful in design, and exudes an air of stability and permanence. They finished it in 1914, and the connection between the House of Morgan and the NYSE was palpable. They called the building “The Corner,” since there was no place more powerful in the land.

Six years after the building was completed, the troops of WWI had their big parade down 5th Avenue, and the nation was uneasy about the future. The 1920s had not begun to roar, though soon enough the bubble would start to expand with irrational exuberance. Thousands of Communists and anarchists had been rounded up and deported.

Two of them- Italians named Sacco and Vanzetti- were arrested and ultimately executed. It was a big deal at the time, xenophobic nativists angry at sullen immigrants. Nothing familiar there, right?

People were mad as hell at Wall Street, which was the useful symbol for venal politicians and arrogant bankers.

Just before noon on September 16, 1920, a horse-drawn wagon trundled up Broad Street and the teamster brought it to a stop in front of the House of Morgan.

Lunch-time crowds swirled around it; trading continued on the floor across the street, at least until 12:01. At that moment, a timing device set by a person or persons unknown detonated 100 pounds of dynamite surrounded by 500 pounds of heavy cast-iron slugs.

Shrapnel flew through the air. The horse and wagon were vaporized, and more than thirty people were killed instantly. Those who died were not the bankers. They were mostly working stiffs- messengers, stenographers, clerks and brokers.

Most of the interior of the House of Morgan was trashed. There was over $2 million in property damage, including spalling on the limestone façade of the House of Mor gan. It is funny. I have see it myself, and didn’t think much of it. The Morganites who came after vowed to leave the scars as a memorial to those who died.

It wasn't immediately obvious that the explosion was an act of terrorism. The Board of Governors of the Stock Exchange across the street met and decided to open for business the next day.

With the same can-do spirit that we see on Capitol Hill these days, workmen cleaned up the area overnight. Next morning, everything looked to be in apple pie order. The physical evidence that might have solved the crime was gone, too.

People stayed mad for a while longer, but the irrational exuberance of the decade that followed dampened the memory. The scars on the building are still there, though the House of Morgan was sold to become a condo in the real estate boom a couple years ago. The roof garden is pretty cool, though I will never have enough money to gain access to it.

The perpetrators of the bombing were never identified, though the attack on the House of Morgan resulted in the establishment of the Justice Department's General Intelligence Division, predecessor organization to the FBI. The results of what they are going to do on Capitol Hill today will be with us for a long time, too.

It would be in their interest to do things wisely, and well. Given their track record, I doubt if it will happen. But they should remember that there are people out there who are likely to be mad as hell.

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