On balmy summer evenings, amusement parks, like Coney Island, are magical places, with exotic sights, loud music, flashing lights and guaranteed excitement. Families jostle to get through the turnstiles to queue at the fast-food stands; young couples rush towards the Ghost Train, as an excuse to get even closer together; groups of young men and women, circle each other, eager to show how brave (or unconcerned) they are; and brow-beaten grandparents hold onto their grandchildren for fear that something terrible might happen. Everyone knows they will spend more than they planned.
Everyone also knows the games are rigged. Most of the hoops will not fit over the target bottles, only a major league pitcher could chuck a biased ball through a tiny hole; the barrels on the rifles in the shooting gallery are slightly skewed; and, if you cannot beat a chicken at 'tic-tac-toe', what chance understanding a 'super senior subordinated' CDO? Anyone who does win, does so by accident, scoring only a fluorescent cuddly toy that will disintegrate on first wash.
But still we pays our money. Fathers, keen to prove that they are really Formula 1 drivers show off in dodgems, unfortunately ending up in a traffic jam at one corner of the rink until ripped clear by muscular roustabouts, just as the siren goes and the electricity is switched off. Young boys, keen to impress their latest squeeze, get on the scariest rides [which strangely resemble the latest charts of US interest rate spreads] before spewing up their dinner of fizzy beer and frankfurters over the cars in front. And novice Joe Fraziers try their hand at the boxing tent, going three rounds with a gnarly old professional who dodges their feeble punches until a late knockout or points win, sometimes feigning a knock-down to keep the punters happy and the 'winner' a hero for, at least, this evening. We are all suckers, sometimes.
In the first light of morning an amusement park is a very sad place. The ground is littered with empty bottles and popcorn boxes, discarded shoes with broken heels, mislaid (or discarded) engagement rings and lost innocence. The music is silent and the lights have stopped flashing. Scavenging dogs and cats roam the empty stands searching for scraps.
Today, Wall Street is like Coney Island (on a cold wet winter morning).
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But every tout and Sideshow Bob knows that punters have memories shorter than a freak-show midget, and back they will come when the hoopla starts up again and exciting new rides are unveiled. How about shiny new Collateralized Obligations on Net Notional Equity Derivatives (Conned) - Roll Up Roll Up?
It may take some time, but the one thing we know for sure is that when the circus leaves town, it will be back again next year. But unlike the circus, when Wall Street leaves town, only the clowns remain.
