It wasn't supposed to turn out this way.
Just one week ago the entire world was salivating over the initial public offering of the leader of social media movement. Once Facebook shares went public, people thought that this would signal the recovery that we had been waiting for would finally arrive. I know I thought so.
And then it fizzled. The stock price has dropped three days in a row, Nasdaq stumbled, investors are pointing fingers at Morgan Stanley and the lawsuits are being warmed up. While pundits debate every misstep on the part of the banks and the company itself, they all forget one basic whopper from the beginning: The people who made Facebook a huge success and Mark Zuckerberg a billionaire -- you and me -- could not buy any shares ourselves.
That doesn't sound very social, does it?
And now G8 leaders are preparing what was until recently considered unthinkable: Greece, the cradle of democracy, is about the leave the Euro and the world leaders seem poised to let it happen. As to what follows after the so-called "Grexit" takes place is anyone's bet. The smarter hedge funds and prop trading shops are all hedged against the Euro. Or so they say.
And now we have warning of a double dip recession. Speaker of the House John Boehner is again threatening to shut down the government if President Barack Obama pushes for the end of the Bush tax cuts and more stimulus spending. Of course this is election year posturing and while the GOP's push for austerity makes sense on paper -- do we really have the money? -- seeing Europe's push to cut spending hasn't sparked a recovery in the Euro Zone at all. In fact, the one nation that can save the entire continent still seems to be Germany. New century, new role.
But thankfully the banks are behaving. Oh wait -- JP Morgan Chase was caught with its pants down with a bad bet to the tune of $2 billion and counting. Goldman Sachs must be whistling Dixie that there is bad behavior on the Street and they are not in the headlines for once. JPMC CEO Jamie Dimon was reportedly so shaken when he saw the spreadsheets of the spectacularly bad bet from his most trusted trader, known as the London Whale, that he couldn't speak. Some news reports predict that the final bill could reach $4 billion once everything is settled.
[Take a trip down memory lane of Wall Street's 9 Worst Bets Ever.]
And if that were not enough, Congress is calling on Mr. Dimon to explain himself and his firm. If his arguments for limiting the still-spending Volcker Rule had any steam, they've all sputtered out by now.
How will this all look in 100 years? If you read history you recognize certain behavior and patterns and we seem to be in a new Gilded Age when outrageous wealth lead to incredible folly. President Obama's slow and steady recovery appears to be stalling and, in an ironic twist that even Tom Wolfe or Charles Dickens couldn't dream of, we may elect a president who is the wealthiest individual to ever hold the highest office in the land.
Now that's rich.Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio