Volatile Stocks and a Week at the Palomino Bar
A volatile week in the life of a watering hole for the investments set.
|NOT-SO-HAPPY HOUR: Business types commiserate at the Palomino after work.
photography by Elizabeth Lavin
As the dow jones industrial average neared 10,000 for the first time since 2004, D CEO descended on the cocktail bar of Dallas’ Palomino restaurant and lounge, a hot spot for self-medication near the Crescent Court, home to some of the most powerful investment companies in the world.
Dow Jones Industrial Average drops 777.6 points
The waitress says things are unusually quiet here tonight. We both wonder if the hedge-fund guys are huddled in their offices at the Crescent Court, trying to figure out what to do next.
Chris Storms is here, though. Storms, who works for Markit Partners, says he routinely shows up to schmooze with people who might want to buy his software, which tracks investments in leveraged loans. I don’t know what a “leveraged loan” is, so I nod and scribble in my notebook. The main thing, he tells me, is that this whole blow-up might require more disclosure. And that’s what his software helps do.
OK, so I’ll come back tomorrow.
DJIA: Up 485 points
I’m still waiting for those hedge-fund guys when Norm Potter rolls up to the bar.
Potter is with Wake Forest University Baptist Medical Center. He’s in town as part of Wake Forest’s work to make way for Dr. John D. McConnell, who’s leaving UT Southwestern to be CEO of Wake’s medical center.
Wake Forest is located near Charlotte, N.C., ground zero of Wachovia bank.
Just yesterday, Potter says, young executives were packing bars in Charlotte because many of them had placed their bets on Wachovia. By the end of the day, Wachovia closed at $1.84 a share; a year before, it sold for about $50.
Before leaving, he casts a prediction: “I can almost guarantee you that there will be a sell-off tomorrow.”
DJIA: Down 19.6 points
Potter was right—sort of.
It’s early evening when I arrive at the Palomino. The waitress recognizes me and asks me if I want the usual.
I strike up a conversation with John Milburn, hoping he’s a hedge-fund guy. Nope. He’s a “total compensation consultant” for Baylor Health Care System.
He’s waiting for friends who are going to join him at the Kenny G concert.
“The traders are reactionary,” he offers, explaining the swoons of the market.
A Kenny G sax solo plays in my head as I stare at CNBC’s histrionics on the flat screen in front of us.
DJIA: Down 348.2 points
It’s my third wedding anniversary, so I spend the evening with my wife watching Sarah Palin and Joe Biden debate.
DJIA: Down 157 points
It’s been a long week, and the guy sitting next to me is making love to his tonic and gin.
I’ve set up an appointment with a hedge-fund manager today and he’s running late. I’m in my regular seat at the bar.
David Houston finally arrives and looks like he needs a stiff drink, but orders iced tea instead. Houston says his firm, Western Reserve Capital Management, dodged holding stock in Wachovia, etc., because it spotted the subprime junk months ago.
Still, he was furious when the House wouldn’t pass the (first) bailout bill.
“They termed it a ‘bailout,’” Houston snaps. “Find one person here who would vote on it” when the bill is labeled that way, he says.
Nonetheless, Houston remains bullish on the American economy.
“When this is all a distant memory, they will look at the valuations and say, ‘Those were some good buys,’ ” he says.
I’m sure when the next bubble bursts, another writer will be trolling for quotes in a bar.
And everyone will have an answer then, too.