"Chutzpah" (חֻצְפָּה) is a Yiddish word. It is defined as brazen audacity to the nth degree. It is used to describe someone who has over-stepped the boundaries of accepted behavior with no shame.
The Joys of Yiddish gives it an even more visceral definition: "gall, brazen nerve, effrontery, incredible ‘guts,’ presumption plus arrogance such as no other word and no other language can do justice to."
The classic example is someone on trial for murdering both their parents, who asks the court for leniency because they are an orphan.
David Malpass is chief economist at Bear Stearns. In an astonishingly inappropriate Op-Ed piece in today’s WSJ, Mr. Malpass argues that all is well in the economy, the credit crunch is contained, and Main Street remains totally unconcerned about this.
Talk about Chutzpah.
If there is a more imperfect messenger for telling everyone to "please calm down" than ANYONE from Bear Stearns, I am at a loss to imagine who that might be. Even more ironically, on the same day we read this absurd Op-Ed, we learn that Bear Stearns has decided to liquidate those two (with a possible 3rd on the way) bankrupt hedge funds in the Cayman Islands — instead of New York, in order to limit creditors’/investors’ ability to get their money back.
I haven’t even gotten to the substance of the piece, which is — let me blunt here — idiotically child-like in its bad facts and poor arguments. It is so weak that it relies on the Conference Board’s backward looking, ill thought of sentiment measures, and conveniently ignores the more recent WSJ/NBC poll, which shows two thirds of Americans believe we are already in a recession or will be in a year.
Nothing to see here, move along, move along.
Any analysis — and I hesistate to use that word — which claims "Neither the economy nor job growth has been dependent on housing" is simply a case of reductio ad absurdum.
I’ve been on K&C enough times with Mr. Malpass to know that he is a bright guy who is not so totally blase about reality. I bet that the idiotic idea for this steaming pile of manure came from way higher up the Bear Stearns food chain. I’ll bet he ground his molars down while writing this garbage.
Jimmy Cayne must really want to keep his job in the worst way . . .
UPDATE: August 7, 2007 9:34 am
Interesting conversation about Bear Stearns with a friend who left there years ago: When discussing why this came from Bear Stearns, instead of from Goldie or Morgan or Mother Merrill or even UBS — recall that Bear Stearns — LTCM’s clearing firm and prime broker — was the only major Wall Street firm that refused to participate in the NY Fed orchestrated (but Wall Street funded) bail out.
The book When Genius Failed: The Rise and Fall of Long-Term Capital Management goes over the details of Bear’s relationships to the rest of the Street. Had any other firm asked a competitor to publish a similar piece, it would have been greeted openly. I assume Bear didn’t even ask, but if they did, they would have been told to go jump . . .
Don’t Panic About the Credit Market
WSJ, August 7, 2007; Page A11
Bear Stearns Caymans Filing May Hurt Bankrupt Funds’ Creditors
Jeff St.Onge and Bill Rochelle
Bloomberg, Aug. 7 2007
America’s Economic Mood: Gloomy
WSJ, August 2, 2007; Page A4
There were a couple of great graphics in the New York Times recently, explaining in some degree of detail, the machinations of the RMBS, CDO and CLO markets.
These are the packaged (and repackaged) holdings that are based upon the sub-prime mortgages that have been defaulting in such large numbers, and have been leading to hedge fund blow ups.
First up: todays front page article by Gretchen Morgenson: Mortgage Maze May Increase Foreclosures.
Graphic courtesy of NYTimes
Next up, the accompanying graphics to Floyd Norris’ The Loan Comes Due: