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The big beasts of American business have a knack for turning even the sourest lemons into lemonade.
Even as the rest of the economy craters, they moved on to find opportunity in the misery of others.
The private-equity moguls and hedge-fund barons of yesterday now prefer to be called distressed-debt specialists and, if you must, vultures.
In Manhattan these days, they're the only ones at dinner parties not trying to slit their wrists with the butter knife.
It's not the first time they have rebranded their skills to match the times. In the 1980s, they were greenmailers and leveraged buyout artists. When that era closed with the 1987 crash, they became private-equity investors, a more palatable term.
What they did, though, was no different: acquire firms with slivers of equity and heaps of debt and get rich on management fees and financial engineering.
Similarly, the Gordon Gekko-style traders of the 1980s were reborn as hedge-fund managers. Now that hedge-fund managers are as popular as a punch in the face, they will doubtless assume a more sober name, perhaps good old-fashioned investment managers.
Everyone wants distressed debt these days. John Paulson, the hedge-fund manager who made billions shorting the US mortgage market, is now buying beaten-down loans. Most egregiously, a group of executives who left Countrywide, one of the largest and worst-performing lenders in the United States, have raised hundreds of millions of dollars to buy the very assets their old firm helped destroy.
To borrow an old Wall Street adage, there's always a bull market somewhere.
• Few stocks have risen since October, but one stand-out is Smith & Wesson, the maker of handguns. Its stock has gone from less than $2 a share to $3.40. The reason is said to be more people locking and loading for the anarchy bound to follow economic Armageddon.
• No chief executive stands in a more intimidating shadow than Jeff Immelt at General Electric. His predecessor, Jack Welch, wrote a book called Winning and is revered as the ultimate CEO. The luckless Immelt took over four days before 9/11. On Monday, he tried to show some faith in his struggling firm, buying 50,000 GE shares when they were trading at a 16-year low. The next day, they fell a further 11%.
