A NAKED LIE FROM THE NEW YORK POST

007_randi_newtonThis morning The New York Post appears with an unbelievable cover story-literally unbelievable. Headlined (at least online) as “AXED GALS TAKE POLE POSITIONS: Pros Stripping Amid Wall St. $lump”, the article by Anka Radakovich (one time sex columnist for Details magazine) reports “Scores of professional New York women stripped of their six-figure jobs are now working as “gentlemen’s club entertainers” at upscale Manhattan jiggle joints. Former Wall Streeters, fashion executives and real-estate agents are pole dancing and stripping for as much as $1,500 a night — but also because they like the flexible hours.”

Scores? Scores?!? You mean, like, forty? Forty women who had six-figure incomes earned on Wall Street, the fashion industry and real estate have become strippers in Manhattan? It is, of course, mathematically possible, but I just don’t believe it. By google search, there appears to be no more than a dozen strip clubs in Manhattan. I have no idea how many strippers each club might employ-perhaps some reader could educate me. But 50 would seem like a big number. That would mean there’s about 600 strippers in Manhattan. Did one in 15 of them formerly earn $100,000 in business? Really?

front032909-1For what it’s worth, the article names two, Randi Newton (pictured) , once of Morgan Stanley, and Katie Haverton who had been a real estate broker, plus a girl named Becky (no last name given) who had been a pastry chef. One of those nubile, twenty-something, six figure-earning pastry chefs that were all over town before the crash, no doubt. I’d very much like to see the Post produce the other 38.

I did like that line about the women liking `the flexible hours’-nice touch! No doubt after having been slaves to their Bloomberg terminals for so long, the women appreciate being able to take an afternoon off before a night of pole-dancing.

UPDATE: Since I first posted, two more reasons to be skeptical have emerged. Randi Newton, purportedly the former high-earning Morgan Stanley financial analyst, is an actress. At her website, randinewton.com, she says that she has had bit parts on The Sopranos in 2001 and in Mona Lisa Smile in 2003, among other roles. There is no mention on her site of her career as an analyst there, but in her bio on imdb.com reports that “Soon after moving to New York City, she worked as a nanny, then as an analyst on Wall Street. Thereafter working in PR and marketing.” So contrary to the Post‘s report, she left her high-paying job on Wall Street for PR, marketing, and the remunerative world of acting–and then, supposedly, stripping.

In addition, among the many people commenting on the article on the Post‘s website is a comment about the stripping ex-real estate broker from post_girl, who writes: “I strongly believe there is no Katie Haverton, a former broker at a large real estate company. Her name would’ve showed up in google search. I quit real estate a year ago, and my name is still showing up in searches.’‘ Indeed, neither the name Katie Haverton, nor any variation, appears on google.

FURTHER UPDATE: As it turns out, Ms. Newton has another website, wallstreetstripper.com, where she tells her story:

Randi Newton attended the University of Nebraska at Omaha on a scholarship she received from the Miss America Organization. Newton moved to New York City to pursue an acting career. She had a wide variety of jobs, first working as a live in Au Pair, then moving up to Morgan Stanley Dean Witter as an analyst for a year. Not satisfied with her situation, she left and was hired as a manager for one of Manhattan’s most prominent marketing companies. After being laid off and unable to find another job despite a yearlong search, Randi wandered into a strip club with a friend, and walked out with a waitress job. One year later, after being dumped by her boyfriend, she got drunk and took off her clothes on Valentines day, there the excitement began.

Newton has since been offered several management positions with major companies, and was approached again by Morgan Stanley Dean Witter. However, using the business skills she developed working in a corporate environment, and applying them to her “night job” her income exceeded $100,000.00 a year. Recently Randi was featured in Radar Magazine in an article about “smart” strippers. She was also approached by the Oprah Winfrey show about the inside life of a stripper. She currently lives in New York City, studying at The New School and Upright Citizens Brigade. She is also a columnist for Exotic Dancer Magazine. Randi loves dealing poker, singing karaoke and has “retired” her g-string. Her book, “Wall Street Stripper” is hitting bookstores December 09.

So the Post has the timeline all wrong, completely undermining its own breathless thesis. And Newton has a book coming out!

A NOTE FROM STEVEN SODERBERGH

Last week I went to a screening of Steve Solderbergh‘s new film The Girlfriend Experience, an interestingly made film about a not very interesting Manhattan call girl. Today, I received an email from, I presume, a publicist for the film:

Good morning – below is a note to you from Steven Soderbergh about the 3/18 Magno screening you attended of THE GIRLFRIEND EXPERIENCE. Regrettably, the film was projected at an inadequate resolution that did not do it justice—Steven explains this below. All future screenings will be held at Deluxe – the brand new, state-of-the-art, very cool screening room at 435 Hudson Street (9th Floor), where it will look fantastic. Here’s the note from Steven:

Dear Valued Customer.

I don’t mean to be nettlesome in a time of worldwide turmoil, but this is really, really important. The screening of THE GIRLFRIEND EXPERIENCE you attended at Magno last week was presented at a resolution of 720p instead of the preferred industry standard of 2K. Therefore, as the mathletes among you will attest, the visual quality of what you saw was roughly 1/3 of what it should have been. In other words, if you had seen the film in my living room, it would have looked better than what you saw at Magno, although the majority of you would have been on the fire escape. As some of you may know, I am a huge (5’ 11”, 142 lbs.) proponent of the RED digital camera, and the Magno screening was not a fair representation of its merits. If, as I suspect, you sincerely wish your praise of the visual aspect of the film to take flight and reach the outer edges of extravagance, then you should consider attending an upcoming screening at another venue.

I remain, as always,
Steven Soderbergh aka Senator Widestance

If only that would make the characters more interesting.

ELEVATING EXTRAVAGANCE UP

Whatever else anybody says, the real reason why nobody at Treasury pulled the plug on the AIG bonuses is simple: nobody thought the sums were truly outrageous or that the practice was completely outside the norm. Sometime over the last ten days, of course, everyone became a virgin again and proclaimed shock at the amount of money hedge funsters command. But those who didn’t think payments on this scale were typical were those who weren’t paying attention. And part of what they weren’t paying attention to was themselves.

To paraphrase Daniel Patrick Moynihan, we have defined extravagance up. It’s admirable that our leaders want to be frugal with the taxpayer’s money and recoup the six- and seven-figure bonuses paid to these financial alchemists, but let’s pause for a moment and look what the taxpayers themselves have been buying with money not rendered unto Uncle Sam.

Million dollar McMansions. $175 sneakers. Super Sweet 16 parties. Bridezilla weddings. Massive high definition television sets. $6000 boob jobs. Handheld electronic devices that enable 24 hour a day twittering. $17 cosmopolitans. $350 tickets to a baseball game. Essential Blackberries for pre-teens that are used to send hundreds of messages every month that read in their entirety `LOL’, `OMG’ and `WTF.’ Humongous SUVs for people incompetent to park them in fewer than three spaces.

Not too long ago we all got a pretty good wake-up call when we saw how much Dennis Kozlowski at Tyco and Bernie Ebbers at WorldCom and Ken Lay at Enron were scarfing down. There was a lot of talk about limiting executive compensation, but we let that fever pass. Instead, the payments floated up, dragging the compensation scales behind. So now we see Dick Fuld making hundreds of millions, and the financial grunts getting multimillions, and the vast majority of us plebes getting the bread and circuses of our day, like cheap electronics and up-to-the-minute accounts of the peregrinations of pantyless pop stars.

Feeling angry about the AIG bonuses? Right on! But why stop there?

TALKING LORDS OF FINANCE WITH LIAQUAT AHAMED

lordsIn his fascinating new book Lords of Finance: The Bankers Who Broke the World, Liaquat Ahamed pulls off the rare accomplishment of looking into a lost world and finding lessons for our own. Lords of Finance focuses on the central bankers who oversaw the economies of the world’s four most important powers in the days following the World War One up to the Great Depression: Montagu Norman of the Bank of England, Emile Moreau of the Banque de France; Hjalmar Schacht of Germany’s Reichsbank; and Benjamin Strong of the Federal Reserve Bank of New York. Ahamed does a splendid job of recalling the private clubs and ocean liners and elegant apartments and estates, the whole rarefied realm in which these men traveled, and of bringing each of them, with his aptitudes and idiosyncrasies, vividly to life. As importantly, Ahamed, a scholar and investment manager, lays out the descent in the Depression with horrific clarity. One sees them making the fatal mistakes, and yet one is helpless to stop them. Lords of Finance is that unusual book that opens doors, showing how impersonal forces and the human nature intermix to govern the fate of nations and peoples. Here, Liaquat Ahamed answers a few questions:

Your book is a very compelling read, no doubt more so because of our current economic predicament. Are there financial lessons that are pertinent to our situation that can be learned from the decades you write about, or are the lessons more about human nature?
The answer is both. There are eerie similarities in the lead up to the Great Depression and the lead up to the current crisis. In both cases we had a bubble–then it was in the stock market; this time it was in real estate. In both cases the bubble was caused by over-easy credit and a mistake in Fed policy. In both cases the bubble, as they always do, burst. And in both cases the ensuing collapse caused a banking crisis. The one constant element in financial crises, not only 1929 or 2008 but throughout history, is the phenomenon of bubbles. That is probably a reflection of human nature, a combination of the recurring victory of hope over experience and of the tendency towards group think.

Insistence on war reparations and adherence to the gold standard seem to have been two totems of thought to which political and financial leaders clung long after they were useful. Are there ideas that we have clung to–that we may be clinging to yet- -that we should abandon, and the sooner the better?
The closest equivalent today is the excessive confidence in unfettered markets. The one area where market failure tends to be particularly pronounced is in finance. Markets overreact on both the upside and on the downside. Some more effective system of regulation that tempers the impact of these overreactions on the wider financial and economic system is probably a good idea.

You cite Walter Bagehot’s advice in his classic Lombard Street for dealing with a financial panic–lend freely, but not to those who are actually insolvent. But a couple pages later, you say the Federal Reserve banks made a mistake in the early days of the Depression by following that advice, by withholding money from insolvent banks and letting them go under. In our current case, walking the narrow space between those two pieces of advice seems to lead to one destination–nationalization of the zombie banks, or at least something like it. Is that a fair reading?
The problem was that Walter Bagehot‘s advice did not go far enough. In a panic the central bank should lend freely and if there are insolvencies that threaten the integrity of the banking system, then the government has to step in. Basically the conclusion is that you cannot allow your banking system to collapse. There is a menu of ways to prevent a collapse. Taking over the worst banks–what you call nationalization of zombie banks–is one element in that menu. We have been doing that for years. For example in 1984 the governemnt took over Continental Illinois, the 7th largest bank in this country, and held it for 10 years before selling it.

Many people cite the success of FDR’s spending programs in the thirties as a reason to support President Obama’s stimulus package. But you credit FDR’s decision to take the US off the gold standard as the most significant step. Do you think this invalidates the reason to support Obama’s package?
There is a famous saying about fiscal stimilus in the Great Depression–that it failed to create a recovery “not because it did not work but because it was not tried.” Most people have the impression that fiscal stimulus under Roosevelt was very large. In fact it was very modest–about 1.5% of GDP at a time when the economy was 30% below potential. President Obama’s package is 3% of GDP at a time when the economy is 10% below potential, and I am sure it will work. There is still a question whether it is large enough

Toward the end of your book, you advance the opinion that the disasters of the Great Depression could have been avoided if Benjamin Strong had lived. Do you believe that? Could the leadership of one person (living or dead) have helped us avoid our current problems?
I very much believe that. Economic history is not an inexorable process. Different people would produce different policies and different policies lead to different outcomes.

You make the case that nobody had better ideas for how to handle the world economy between the wars than John Maynard Keynes. Who do you listen to today most closely?
His followers. Economists ranging from Joe Stiglitz and Paul Krugman to Larry Summers.

One of the great treats of your book is your ability to recreate the lives of these bankers in the twenties and thirties–ocean voyages, trips to world capitals to take stock, the grand apartments and hotels, the clubby atmosphere. Today, central bankers seem far less aristocratic (though I guess if you think about Alan Greenspan, not less august.) Are we any better off?
Yes I think so because we are not going to have a repeat of the Great Depression. At that time the patient was very sick and the central bankers applied precisely the wrong medicine. They allowed the banking system to collapse, they cut budget deficits and they even raised interest rates in the middle of the Great Depression. Our central bankers may not be as aristocratic but at least they are not repeating those mistakes. If there is a risk, it is that patient is somehow sicker and that while we are administering the right medicine, the doses are not large enough.

(I wasn’t smary enough to ask Ahamed this question, on The Daily Beast the other day, but Jeffrey Leeds was.) What’s your view of the market?)
I buy the idea that the market’s gone from overpricing risk to underpricing risk—and there are great values. Someone called me and said things were going to get bad, and I said, ‘The more you fear that, the better, because that means they’ve all sold.’ The bear market in the Great Depression lasted 30-something months. Profits of US corporations went from $9 billion (9 percent of GDP) to 0. I don’t think we’re going to have the same fall. Profits will probably fall by half and I would be surprised if the bear market lasted more than two or three years. We started in Oct ‘07, so we’re 16, 17 months into it. It’s got further to go, but the low is probably going to be this year, not next year.

WE’RE NOT SINKING, DUDE–WE’RE DIVING!

das_boot1The question of the day is: is Barack Obama as cool and as shrewd as Jurgen Prochnow? Or, to be more precise, as Capt.-Lt. Henrich Lehmann-Willenbrock, the character Prochnow played in the 1982 German submarine classic Das Boot. Escaping from Allied destroyers, the captain took his submarine lower and lower into the sea. As they dived deeper, the pressure increased: the glass on the gauges broke. Rivets popped. Men broke out in a flowing sweat, their tongues hung out. Their eyes nearly popped from their skulls.

These days, as the Dow sinks, many a good man has succumbed to the pressure. Obama keeps playing it cool. The other day, David Brooks in the Times wrote that the real aim of the Obama team was a radical redistribution of the wealth. Today, after the benefit of some exclusive presentations by senior White House officials (and if you don’t think the White House isn’t playing hard to win the middle of the country, watch them pound the polarizing Rush Limbaugh with a rubber hammer, while wooing and stroking the reasonable David Brooks with executive attention), Brooks seems to think that they may know what they’re doing after all. “The White House made a case that was sophisticated and fact-based,” he writes today. “These people know how to lead a discussion and set a tone of friendly cooperation. I’m more optimistic that if Senate moderates can get their act together and come up with their own proactive plan, they can help shape a budget that allays their anxieties while meeting the president’s goals.’’

Meanwhile, on the other side of the Times’ op-ed page, Paul Krugman complains that the White House keeps floating half-hearted bank rescue plans that die on arrival, when everyone knows that what we need is to nationalize these collapsing colossi. “I fear that officials still aren’t willing to face the facts,” says Krugman. “They don’t want to face up to the dire state of major financial institutions because it’s very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable. But this refusal to face the facts means, in practice, an absence of action. And I share the president’s fears: inaction could result in an economy that sputters along, not for months or years, but for a decade or more.’’

Perhaps we are watching the exercise of an idea from the Ernest and Julio Gallo School of Political Strategy: sell no wine before its time. A smart proposal that people aren’t ready to support becomes a dumb idea. Nationalization may be the right answer, and may have always been the necessary answer, but until people are able to recognize that, it’s no answer at all. But after the Dow drops and the rivets pop, as unemployment rises and the glass on the gauges cracks, the center may rush to nationalization.

Is that what’s going on? I hope so. I’d hate for the White House to be as clueless as the guys at the Journal and CNBC seem to think.