"Hammer Time" Hits New York City

Only the tourists look twice in New York City. The locals have seen it all.

Yesterday, while enjoying a leisurely brunch at a little café down in the Soho district, your editor noticed a group of strangely dressed twenty-somethings strutting along the sidewalk. A few New Yorkers even did double takes as they passed by. One member of the group, possibly their spiritual leader, sported a large “afro-style” hairdo. Nothing strange about that…except that it was only half a hairdo; he had decided to shave the other half off. The remaining “do” was, of course, bleached blonde. The rest of the posse had some variation of the same style with “flat-tops” and assorted right angles protruding from every head.

One member carried a retro-style “ghetto-blaster” and they all wore baggy pants with colorful graffiti markings. They looked like the cast of a mediocre Spike Lee movie.

“It’s the next look,” our fashion-astute friend remarked. “People are starting to re-embrace the whole ‘M.C. Hammer’ thing.”

M.C. Hammer, for those who missed his brief act, was a late-80s- early-90s rap star most famous for squandering a huge fortune. “Hammer” had amassed a booty of some $33 million at peak popularity thanks to a few hit songs and some catchy dance moves. With or without the advice of his manager, the rap star dumped $12 of that million into a Californian mega-mansion, complete with two gold- plated “Hammer Time” gates at the entrance to the property and a 17- car garage, which he filled with luxury vehicles. Not one to shy away from his own reflection, Hammer had $75,000 worth of mirrors installed throughout the house. A couple of helicopters were on standby out back in case Hammer needed to be anywhere faster than his Lamborghinis could take him.

Alas, as we all know, “Hammer Time” can’t last forever. And, after his entourage of 300 helped the poor rapper blow his loot, Hammer filed for bankruptcy and spent the final years of the millennium as a comical footnote in the book of one-hit wonders.

It was therefore interesting to learn that Hammer Time is back in New York, especially as the city’s chart –topping singles (remember the Mortgage Backed Security remix featuring Biggie Bear Stearns and L.L. Lehman Bros.?) are, like, so five minutes ago.

Posse leader (and Federal Reserve chairman), Ben Bernanke, appeared in Kansas over the weekend to defend his group’s flailing reputation.

“I was not going to be the Federal Reserve chairman who presided over the second Great Depression.”

Bernanke hit back at allegations from the crowd that he had acted irresponsibly by spending billions of taxpayer dollars to prop up Wall Street “beheamoths” instead of allowing them to fail and “making room for the small business.”

“It wasn’t to help the big firms that we intervened,” M.C. Bernanke pleaded. Small business must have wondered why the Fed didn’t NOT help them by funneling hundreds of billions of dollars their way.

It would seem too that Wall Street insiders, those with the word on the next big thing, are rapidly losing confidence in the Bernanke economy’s ability to churn out another chart-topping single.

Since the start of May, there’s been “massive selling” by insiders, to the tune of $3.9 billion vs. just $350 million of insider buying.

Banks too are lacking for confidence. The front page of this morning’s Wall Street journal reports that “The total amount of loans held by 15 large U.S. banks shrank by 2.8% in the second quarter,” What’s more, over half of the loan volume in April came from “refinancing mortgages and renewing credit to businesses,” not new loans.

Whether it is in the hip-hopping world of entertainment or the entertaining world of global finance, crowd approval can be equally as fleeting. One need only write a few poorly received songs or send an entire economy into the depths of depression and, “bang” just like that you’re yesterday’s news.

The Daily Reckoning