Wall Street’s Decision Makers Brace for More Chaos After Markets Plunge

There was a small rest at Wall Street this weekend. There was a lot of anger, anxiety, frustration and fear.

Anger for President Trump for a brazen and chaotic launch of rates that canceled trillion dollars in value from Stock market In two days. Anxiety for the state of the private equity sector and other colossal funds with global investments. The frustration in Wall Street’s elite to their sudden inability to influence the president and his advisers.

And the fear of what could come later.

Hedge fund scored their losses and boasted if they only lost a little. The bankers and lawyers have torn calendars already scattered through the creation of agreements, thinking that no managing director soon risk a great merger or a public offer. The main banks have played emergency scenarios to guess if one customer or another would fail in the cascade effects of an international commercial war.

In conversations with the New York Times during the weekend, bankers, managers and traders have declared that they feel like Flashback to the 2007-8 global financial crisis, one who has hit a certain number of Wall Street giants. Leaving the panic of the brutal market, but relatively short -lived, burst into Start of the Pandemia di CoronavirusThe speed of the drop in the market last week – the shares decreased by 10 % in just two days – was exceeded only by the sales waves that arrived when Lehman Brothers collapsed in 2008.

As then, the breadth of the sudden downraft-with oil, copper, gold, cryptocurrencies and even the dollar captured in the Sell-Off-Off-the greatest Wall Street players who ask themselves which of their competitors and counterparts has been caught off guard. The banks asked the trading customers to publish additional funds if they want to continue taking money on loan to trade so-called margin calls that have not almost reached the level of a generation before but are causing discomfort.

Most hedge fund and other private investors do not share the details of their wallets every day or weekly, so it will take more than one weekend to be known by potential damage. A venture capitalist, speaking on condition of anonymity because he had not formally informed his investors, estimated that his wallet had lost $ 1.5 billion. This is whether its investments subtly exchanged could be sold at all.

“It certainly looks similar to 2008,” said Ran Zhou, a New York Hedge Fund manager at Electron Capital, who canceled the weekend plans and put a sketched shirt to sit in his Manhattan office and light sources of Chinese news to get the leap on China’s plans.

What is unique of this crisis is than rather than counting on the government to help collect the pieces, the financial sector sees little hope of a immediate rescue. A world order built on the interconnection has been torn from the same White House and the position of the United States in the epicenter of that network is in doubt.

“The pain is self -inflicted,” said Mike Edwards, a consultant of a private investor, who spent the weekend in calls with other investors, starting from Friday.

“You won’t learn anything with a calculator,” he said in an interview on Saturday from his home in Connecticut. “It concerns more what your neighbor is doing all the right price.”

For the generations, Wall Street enjoyed a role by advising the leaders of both main political parties, and hoped that Scott BeSent’s appointment, a Hedge Funt and Democratic director, as secretary of Mr. Trump, meant that the industry had a friend near the oval office.

Mr. Beesent, however, shook himself off the turmoil. “The market constantly underestimates Donald Trump,” said “Meet the Press” in the NBC program on Sunday.

This also left some of Trump’s greatest defenders of Wall Street with little to do if not publicly complaining.

“It was fun as long as he lasted,” wrote Daniel S. Loeb, a billionaire manager of Hedge Fund, last week in a post he later canceled.

William A. Ackman, Hedge Fund’s director who is frank to support Mr. Trump, I had a long post on x Saturday afternoon at the beginning of the new rates. “Why shouldn’t a break make sense?” He wrote.

“The risk of not doing it,” added Ackman, “is that the enormous increase in uncertainty brings the economy to a potentially serious recession”.

Among the recent bets of Mr. Ackman was Nike, the clothing giant who moved his supply chain to Vietnam from China, just to be captured in the crossed fire after Mr. Trump announced a rate of 46 percent on imports from Vietnam. (Since then Vietnam has offered to drop its rates on US goods to zero, urging the United States to do the same.)

There were some bright points. Several bank managers and Hedge Fund have underlined that, despite the frenetic sale, negotiation in the wake of the tariff announcement was so far proceeded without unexpected problems, a point that Mr. Beesent also did on Sunday.

“Everything works very well,” he said during the NBC interview.

A senior manager of a large bank also stated that after a call on Friday evening there was relief with the regional heads of the bank and the managers that no one could indicate a specific customer in danger of immediate implosion.

The merchants of the Citadella of Hedge Fund from 66 billion dollars, for about a month, had reduced the use of the financial leverage and other volatile trading tools while the founder of the Ken Griffin fund had become increasingly convinced that Mr. Trump would cause Tumult, said that two employees did not allow to be appointed to discuss the fund’s machines. The Hedge Fund, which approached the Brink of Collapse In 2008, it was approximately flat last week, they said.

In interviews, investment bankers have declared that they had been flooded with calls by large companies willing to pay heavy expenses for advice on how to proceed. At Bank Lazard, the message to employees had to be available for customers but not to offer convictions on what would happen after, given the immense uncertainty of the moment.

In fact, the real depth of the impact has yet to be determined. Bank of America estimates that profits for the companies of the ‘P 500 can drop by a third if the retaliation withdrawals are issued by the countries subject to the rates of Mr. Trump. But the terrible evaluations could change, if the countries begin to arouse agreements with the White House that will lower the rates.

Even before the latest rates were announced, the construction of US affairs in the first quarter fell by 14 % compared to last year, According to LSEG Data & Analytics. And in the middle of the collapse of last week, some of the long -awaited public offers that the bankers had hoped would have laid the foundations for other lists, they were pulled or paused, including the offers of the Klarna payments giant And Stubhub, the online ticket office business.

A bank manager said he planned to spend more time in Europe, where the agreements in the first quarter have passed those in the United States.

Two private equity managers said they expect that market riots and the honor of global relations would make more difficult for private companies such as their raising funds, adding to the challenges they are already facing as a decreased agreements market He made it more difficult to return cash to their investors. The pressures on these companies will increase only when companies in which they invest begin to feel the impact of rates, said these managers. Apollo and Kkr’s actions dropped over 20 percent Thursday and Friday.

A prominent lawyer of business described himself as “amazed” while he set out how fallen the prices of his customers’ actions had fallen. A former Goldman Sachs manager summarized the frustration with Mr. Trump in a succinct way: someone must stop him.

The best leaders in the financial world remained silent. Jamie Dimon, CEO of JpMorgan Chase, who two days after the inauguration of Mr. Trump said people should “overcome” the threat of rates Since they were good for national security, they were spending the weekend to give the latest retouching to his annual letter of the shareholders who will be released on Monday, after talking to a group of cashier in Nashville. He refused through a spokesman to be interviewed.

Steve Eisman, the investor made famous in “The Big Short” for providing the collapse of the 2007-8 real estate market, said that a little humility was in order.

“Everyone in the stock market went to college and all those who went to college took Econ 101 and had a drum in their heads that the commercial wars are bad,” said Eisman on Saturday. He suggested that investors were ignoring the potential that the United States, thanks to its economic strength, could be the best positioned from any nation to thrive in these scenarios.

Few companies have publicly discussed their prospects from last week’s tariff ads, but the main banks including JpMorgan and Wells Fargo will begin to keep investors calls to face their earnings (and prospects) on Friday.

The uncertainty was neatly exemplified by Mr. Loeb, who wrote on X on Saturday: “Sometimes the bottom of the market when things seem more desolate”.

“Not a prediction,” he added, “but keeping an open mind.”