The Borrowers

Over the past 15 years, individuals and businesses in both Britain and the United States have taken on too many loans. The punishment for their recklessness is only just beginning

In November last year, Louis Bacon, one of the cleverest American hedge-fund managers, paid $175m (£88m) for the Trinchera Ranch, which covers 250 square miles of Colorado. It was the US’s largest-ever private property transaction.

At the time, this was viewed as just another example of hedge-fund excess, like the bottles of Petrus blithely downed in Mayfair each night. But, in retrospect, it may have been one of Bacon’s smartest investments.

When the rest of the financial world goes to hell, good ranch land holds its value. You can see it, touch it and even live off it if you have to. That is more than can be said for a collateralised debt obligation, one of the gimcracks causing Wall Street’s current woes.

It has been a breathtaking few weeks to be in New York. Whether you work in financial services or not, Wall Street dominates the city, its economy and its culture. It was on Wall Street that the downfall of Eliot Spitzer, New York’s governor, was greeted with the greatest rapture. Spitzer had made his name punishing bankers for their actions during the 1990s boom, so for them his humiliation was delicious… www.newstatesman.com

Posted by John Malloy on 03/30/2008. Filed under International. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry