• Jeff Matthews

Captain Renault on Wall Street


Captain Renault: I’m shocked, shocked to find that gambling is going on here!

Croupier: Your winnings, sir.

Captain Renault: Oh, thank you very much…. Everybody out at once!

—Casablanca

It appears that Wall Street’s so-called economists are shocked—shocked!—to discover that retail sales in America declined last month.

These are the same folks, you may recall, who were shocked—shocked!—just last week to discover that payrolls in America had likewise declined last month.

And were shocked—shocked!—at the recent collapse in housing starts…and were shocked—shocked!— at…well, the list is too long even for the virtual world, including as it does not just the sub-prime bubble and the sub-prime collapse, but also the fact that the sub-prime rot was not contained inside the realm of sub-prime assets, as virtually every Captain Renault on Wall Street maintained it would be, but has spread throughout the world, from Spain to the UK to Asia. What gives here?Do these experts not read the papers? Listen to earnings calls? Visit companies? Talk to their neighbors? See the “Open House” signs that sprout up around town on weekends?

Or is it just that, like Captain Renault, they’re part of a system that always seems to find the horse has left the barn and disappeared across the back forty before it decides to firmly close and lock the door?After all, like Renault, who is shocked—shocked!—at the gambling yet takes his cut before shutting down the joint and leaving the other winners holding the bag, they’re still going to get paid, even while the poor shlubs who relied on their sage advice take a write-off..What’s next…Entertainment Tonight is shocked—shocked!—when Britney Spears loses her record contract?

Jeff Matthews I Am Not Making This Up

© 2007 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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