It's been a long time, been a long time, been a long, lonely, lonely, lonely, lonely time.

Can you guess what year this is from?

Greetings, earthlings! I'm thinking about making a return to this here blog. As some of you may know, I am no longer (geographically) Pedro of NYC. However, I am going to continue to blog under this sobriquet because, well, I effing feel like it and PedrosChicago sounds like ass. Deal with it. Don't deal with it. Whatever. But, as they say, there but for the grace of God, be it under a misnomer or not, go I.

Se here we are. October, 2008. I have a word of the day today, simply because I happened to see it at the top of the page of the dictionary while I was checking the spelling of sobriquet. I felt this word was appropriate today because the stock market closed down just over 508 points, bringing its two day total drop to almost 900 points. Suh - Weet, people!! In light of this, I give you Pedro's NYC Word of the Day. Pay attention - this will be on the test.

Sodomy \'sad-e-me\ n [ME, fr. OF sodomie, fr. LL Sodoma Sodom; fr. the homosexual proclivities of the men of the City (Gen 19:1 - 11)] 1 : Copulation with a memeber of the same sex or with an animal : BESTIALITY 2 : noncoital and esp. anal or oral copulation with a member of the opposite sex 3 : giving the literal or proverbial high hard one in the pooper to someone, whether they like it or not : syn see ASS FUCKING.

Because, my friends, for the past several weeks the markets have Sodomized (or engaged in Sodomy with) investors, i.e. investors have been victims of an Ass Fucking.

Now luckily, yours truly has no assets to speak of (although I do have a sizable ass - but that's another story) except a 401(k) full of Morgan Stanley stock that I can't touch until I'm like 60 or something. This basically means that the massive sell off in the markets will not impact me like it is and will continue to impact others. And although I'm usually not the sympathetic type, times out there are nothing short of brutal and I hope everyone comes out of this ok.

I have a quick summary for you, the Great Unwashed, that explains how we got here. It's a quote from a guy named Steve Schwarzman, one of the co-founders of a private equity (amongst others things) shop called the Blackstone Group. By all accounts this is one smart mofo, although apparently he's only about 5'3", and as everyone knows, that's gotta hurt.

It’s a perfect storm. It started with Congress encouraging lending to lower-income people. You went from subprime loans being 2% of total loans in 2002 to 30% of total loans in 2006. That kind of enormous increase swept into the net people who shouldn’t have been borrowing.

Those loans were packaged into CDOs rated AAA, which led the investment-banking firms [buying them] to do little to no due diligence, and the securities were distributed throughout the world, where they started defaulting.

When they started defaulting, out of bad luck or bad judgment, we implemented fair value accounting….You had wildly different marks for this kind of security, which led to massive write-offs by the commercial banking and investment-banking system.

In the face of those losses…you needed to raise new equity…which came from sovereign-wealth funds in part, which then caused political resistance to sovereign-wealth funds, who predictably have withdrawn from putting money into the system….It seemed pretty obvious that would happen. We now find ourselves with a liquidity crisis where fundamentally the cost of money for financial intermediaries [such as investment banks] is significantly in excess of their cost of lending it. So several institutions found themselves in a structurally impossible position. We had a series of bankruptcies, whether Bear Stearns or Lehman, or forced sales like Merrill. Goldman reverted to a banking charter for a lower cost of funds, which today is still not low enough for the business.

So that’s the story of how we got here.

Did you guys get that? There's no simpler way to put it. Now head off to your next party and dazzle them with this little tidbit of knowledge. If you are asked to discuss specifics, it is our policy here at PedrosNYC to simply say, "There's a time for business and a time for cocktails. And this, ladies and gentlemen, is the latter. Good evening to you." Then, as you elegantly pirouette away, be sure to mutter under your breath "Sayonara Bitches!!" and adjourn yourself to the bar, where you'll be the hit of the party. In LA that shit might even get you laid. Good luck all, I am out!