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The financialization of everything
Notes from a postmodern Wall Street
Welcome back to Money Puff, and happy 4/20!
I’m not a journalist, nor am I looking to cover breaking news. Therefore, instead of a daily “newsletter,” you can think of Money Puff as more of a recurring blog. There will still be plenty of posts and content—here on Substack, on Twitter, LinkedIn, maybe videos if I can figure that out—but likely not as many emails a week. We know you’re professionals, and we respect your inbox!
Notes from a postmodern Wall Street
The other big update is to the Money Puff brand. We’re unveiling a new over-arching theme of this blog: notes from a postmodern Wall Street. From pot, to pump-and-dumps, to the pandemic, we’ll bring you inside the storylines that have changed Wall Street forever—both as a financial system, as well as a culture.
Let’s define ‘postmodern.’ Postmodernism can be something of a dirty word, from Fox News to academia, as its associations with relativism bring accusations that it degrades truth and reason. But for our purposes, ‘the postmodern’ is a way of periodizing history in order to critique a culture. I like Fredric Jameson’s definition: ‘The cultural logic of late capitalism.’ In an essay of the same name, Jameson lays out five cultural signifiers of the postmodern:
A ‘new culture of the image or the simulacrum.’
A ‘weakening of historicity.’
A ‘return to older theories of the sublime.’
Technology as ‘a whole new economic world system.’
The ‘bewildering new world space of late multinational capital.’
In number five, Jameson is talking about ‘Wall Street,’ or the vertiginous rise of international banking and stock exchanges at the time of his writing in the 1980s. What was ‘modern’ Wall Street? Think Charlie Sheen, cocaine—not hard, I know—trading floors, and power suits. Read Michael Lewis’ account, from Liar’s Poker, about his time as a bond trader at Salomon Brothers:
‘It was wonderful to be young and working on Wall Street in the 1980s: never before had so many twenty-four-year-olds made so much money in so little time.’
The modern era was the birth of Wall Street as a subculture of well-connected men making obscene amounts of money. It was a club, a money club. Then, with the ‘08 financial crisis, everyone got to join the club; that is, everyone lost money, and the public had to bail out the big banks. Naturally, regular folks next decided to Occupy the physical space they were now ostensibly invested in.
A boundary had been crossed, the veil had been pierced—modern Wall Street was at its end.
In the 2010s, with easy money and Tech the next big thing, the gears of capitalism reflexively turned in on themselves. Bitcoin entered the scene, billed as the new economic system of the internet, ‘decentralized.’ As Jameson put it, the postmodern represents ‘the purest form of capital yet to have emerged, a prodigious expansion of capital into hitherto uncommodified areas.’ The corollary on Wall Street is the financialization of everything. Taking 1-4 from Jameson above, we see the following results of a commodified, postmodern Wall Street:
Crypto as a simulacrum of Wall Street; fraudsters commoditizing Wall Street’s ethos.
Laser eyes, weed jokes, and grassroots ‘preaching’ sending meme stocks and crypto ‘to the moon.’
Robinhood ‘democratizing’ finance, i.e. Wall Street; fintech eating the world.
Listen to Michael Lewis again:
“I do feel like I’ve been watching—not the system ever reform itself—but instead just becoming more and more itself, more and more extreme… the financial sector has just gotten more and more important, and not just as a percentage of activity in the economy, but also in the imagination of people.”
Then the COVID-19 pandemic, and back to number five. The ‘bewildering new world space of late multinational capital’ was suddenly a cramped Murray Hill apartment. It was arguably no longer wonderful to be young and on Wall Street at the start of the 2020s: take it from me and others I’ve sat (virtually) across from on deals. If you had to draw a line in the sand for the passage to a ‘postmodern’ Wall Street, the mutiny of Goldman Sachs analysts in 2021 is as good a place as any.
That’s because culture is a collection of stories, and Wall Street had been telling a pretty compelling one: it’s wonderful, you’re young, and you’ll make a lot of money. Postmodernism, at its core, can be thought of as a breakdown in ‘meta-narratives,’ cultural guideposts built up from one generation to the next. A postmodern culture—fractured by technology, diffuse with the logic of late capitalism—is unable to achieve critical distance from its own production. Commodity is culture; finance is everywhere. Wall Street isn’t exceptional: it’s maybe just a job.
Or maybe not. The former denizens of modern Wall Street are calling everyone back to the office. The ‘high seriousness’ of modernism may ultimately reign supreme in high finance. But there’s no denying that crypto, meme stocks, and retail traders confounded the story of Wall Street, changing its culture forever. Money Puff will attempt to diagnose the causes, analyze the results, and chart a path forward in our increasingly ‘financialized’ culture.
Weed also got a bump during the pandemic, as stress, anxiety, and lockdowns prompted folks to light up. It’s also gone pretty mainstream since the 2010s, too. No longer a distinct subculture, it has been subsumed by the culture of late capitalism, commodified, packaged, and re-sold in a million different ways. I was a financial analyst at two different cannabis tech companies, for weed’s sake.
As a good postmodern Wall Street analyst—no longer on Wall Street, but that’s the point—I’ll continue to cover the emerging and evolving legal cannabis market. Because it will continue to change and evolve.
How do I know? Not everyone with a stake in regulating it has used the product!
When regulators—in a free market, capitalist society—don’t partake in the market they are regulating, it means they don’t really want to regulate that product. It’s the same reason why it doesn’t bode well for legalization that the DEA has final say. Regulators wanna regulate! And that means engaging with the thing you’re regulating—otherwise, it’s just prohibition by another name.
Why am I talking about this? Because this is Money Puff, and we still take a good deal of inspiration from Money Stuff. Here’s Matt Levine yesterday:
Third, there was pushback against Gensler for not owning or using crypto. “It is hard to understand something without using it,” writes Anthony Pompliano. “The idea that we have regulators who are actively making rules for something that they have never used seems confusing.”
This seems like a simple mistake. Nobody asks the administrator of the Drug Enforcement Administration if she has ever used meth. “How can you regulate meth if you have never used meth” is a non sequitur. “How can you understand meth if you have never used meth,” similarly, has easy answers: You can look at the science and sociology of how it affects people, decide that it’s bad, and regulate it accordingly.
If you start from the assumption that crypto is the future of payments, or of the financial system, or of art or identity or the web or whatever, then, sure, the people regulating it should understand its mechanics and possibly be users and enthusiasts themselves. If you don’t start from that assumption, though, it seems reasonable to let the regulators examine the effects of crypto and decide whether it’s good or bad.
Part of the reason that cannabis is now a tradeable stock on Wall Street is because it has become, in a very real sense, part of the mainstream culture. That is, in the logic of late capitalism, it has sufficient demand to be subsumed by popular culture: commodified, stripped of historicity, and sold in a simulacra of the Apple Store.
Regardless of what you think of any of that, cannabis is now—according to our postmodern, capitalist culture—part of the future in many respects. Money is at stake, burning quickly, and regulators need to slow it down, or risk sending the whole culture back to the underground. That may involve, in a very real sense, burning some cannabis and partaking in the culture. Otherwise, you’re just playing with fire.
Did Money Puff have anything to do with this? As a reminder, this is never legal or financial advice. It’s all relative, anyway.