If you can't trust Sam Insull, who can you trust?

The Spy's financial guru explains it all to you

Editors' Note: Some readers have expressed concern about recent volatility in the stock market, using expressions such as "We're gonna die," "I'm so f****d," and "I'll have to work until I'm ninety." Nonsense, says our Financial Editor Samuel Insull. In an exclusive interview with the Spy's own Wall Street Correspondent, Maria Boroaroma, Insull explains how you can profit from catastrophe and human misery.

The recent turmoil in the financial markets has had a noticeable impact on Wall Street

MB: Mr. Insull, let me say it's a pleasure to discuss recent developments in the financial markets with an expert such as yourself.

SI: And let me say it's a pleasure to meet you. You remind me of a young Suzi Wetlaufer.

MB: Don't bet on it, you old fossil.   Tell us, Mr. Insull –

SI:  Call me Sam.

MB.  OK, Sam.  Tell us how you would describe the recent events on Wall Street.

Boroaroma

SI:  It has been a tsunami.  A perfect storm. A financial hurricane.

MB:  Could you also describe it as a cyclone or typhoon?

SI:  You could, but "tsunami" and "perfect storm," sound more contemporary, which is very important when you're trying to get young women into, uh, a deeper understanding of the difficulties of financial markets.

MB:  How often does such a financial tsunami or perfect storm come along?

SI:  Once in a lifetime. Once in a century. Never before – this is unprecedented.

MB:  Aren't the S&L meltdown, the Drexel junk bond meltdown, the Russian and Mexican debt crisis, and the LTCM collapse all precedents?

SI:  I just told you this was unprecedented.  

MB:  Should we have seen this coming?

SI:  Absolutely. This crisis is the obvious outcome of decades of deregulation, increased leverage, and a belief that housing prices would rise forever.

MB:  In a column you wrote for the Spy in 2004, you said that, and I'm quoting, "Today's financial geniuses are making leverage work, not only on Wall Street but on Main Street as well.  Thanks to the securitization of subprime loans, millions of Americans for the first time are experiencing the thrill of home ownership."

SI:  And today they are experiencing the thrill of foreclosure.  Life's just one thrill after another. Speaking of which, Maria –

MB: Moving along, whom do you hold responsible for this financial meltdown?

SI:  The number one culprit has to be Alan Greenspan, who refused to deflate the housing bubble when he was Fed Chair, and blocked all efforts to regulate crooked mortgage brokers.

MB:  It's interesting you say that.  I have an interview you gave to the Spy in 2003, when you said: "Hats off to that financial market genius, Alan Greenspan. Thanks to his fervent belief in the power of markets, America has recovered from the shock of 9/11 and is well on its away to years if not decades of stable growth."

SI:  How many of those clippings do you have, Maria?

MB:  They're all on my laptop. Want to see? Here, come around this way.

SI:  Very interesting.

MB:  The laptop isn't hiding under my shirt, Sam.

SI:  My mistake.

MB:  What should average investors not be doing?

SI:  They should not be panicking. They should not be selling at a market bottom. They should not be planning to retire.

MB:  Where should they be putting their investment dollars? Do you see values in the stock market?

SI: Absolutely. The recovery will be led by consumer durables, consumer non-durables, non-consumer non-durables, technology, value, emerging markets, energy, manufacturing, or basic materials and commodities, and the investor should be poised.

MB:  Poised how?

Insull

SI:  Poised to take advantage of these opportunities.

MB:  What does this do to the dreams of millions of Americans?

SI:  It dashes those dreams.  And it reveals to Americans how we have been living.

MB:  And how have we been living?

SI:  Beyond our means. In a fantasy world.  In a bubble.

MB:  What does this mean to the average citizen who's just trying to scrape together the money every month to pay their mortgage?

SI:  F****ed if I know. I'm getting on my NetJet and heading to Vegas. Wanna come?

MB: Aren't you a little old for me?

SI:  No older than Sumner Redstone, and I hear he's back on the market.

MB:  Thank you, Sam.