Wednesday, August 22, 2007

Kate Jennings/MORAL HAZARD

Fiction can sometimes go where journalism has a hard time getting access. With hedge funds falling like flimsy card houses in the wind, there's new interest in what's going on behind the scenes among the movers and shakers. This 2002 novel offers an impressionistic and concise view, runs only 175 pages, and is written with a published poet’s precision of language. It's a semi-autobiographical account by Kate Jennings, an Australian poet and novelist whose friends got her a job as a speechwriter to support an older husband with Alzheimer's.

Her feel for language, her impeccable sense of pitch and her engaging, tough-minded tone take the reader on quite a ride as her protagonist, Cath, learns the ropes at “a firm whose ethic was borrowed in equal parts from the Marines, the CIA, and Las Vegas. A firm where women were about as welcome as fleas in a sleeping bag.”

The novel spans six years and is made up of two intertwined, complementary narratives. Each concerns a failure of memory -- Cath's husband Bailey’s on the one hand, the banking industry’s on the other. Bailey’s cognitive decline is told with sensitivity and skill. The bankers are sketched deftly and colorfully. Bailey’s crisis ends in death. The banking industry’s crisis almost blows up the entire financial system, although the perturbation scarcely is noticed by the general public and nothing really changes.

The hedge fund collapse in the book was modeled on Long Term Capital Management. The spectacular demise of LTCM in 1998 was an eye-opener for industry insiders, but after a bailout arranged by the Fed it was quickly forgotten.
“To date, no follow-up. Nothing. Nada. As if afflicted with Alzheimer’s, the Fed remains adamant that banks can police themselves. Deregulation rackets along like a runaway train, banking lobbyists clinging to its side, climbing into the cab, waving from the windows, hollering in their exhilaration. Hoo-ha.”
The book is a powerful, frightening indictment of Wall Street and its institutional failure of memory, and every time I read the financial pages these days, I hear that "Hoo-ha." It's not at all reassuring.

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