The classic adage “One does not simply drink one beer at a Municipal Waste concert” may have finally run its course; in the process, triggering the worst financial turmoil in months. Yesterday’s Waste show in Pori, Finland yielded a novel sight for the band: a barren bar, no crowd surfing, concert-goers standing completely still when called to form a Wall of Death, and a general air of utter boredom.
“I don’t know how to describe it… I just, like, didn’t have fun, man,” said one attendee.
At the end of the next business day, the NASDAQ lost nearly 1.5% of its value, down to 3099.14, while Dow Jones Industrial Average did not fare much better, falling 1.2% to 13521.97. The crisis, according to Thomson/Reuters, may be contained for the moment – due to the location of the show in Finland, which has a strong manufacturing base that can offset damages to commodity and retail losses from the concert, as well as brighter outlooks for the remainder of the band’s European festival run.
However, music industry pundits and Wall Street bankers alike fear that the effects of the concert could trigger a domino effect that would send ripples throughout the financial system. “Municipal Waste is highly influential in several markets, most notably for commodities like beer, raw materials like wood, plywood, polyester for skateboards and boogie boards, and in clothing markets like those that include jean jackets, bullet belts, and White Nike High Tops,” said a senior analyst at Goldman Sachs, who spoke on condition of anonymity. “There are a lot of traders who are going to buy based on their performances.”
The S&P 500 took the biggest hit, down 1.74% a half-hour before the closing bell.
“There’s been a deluge of market-moving events this week,” said Kleinerman Brigham, chief market strategist for HPL Financial. “Yesterday’s Municipal Waste concert was simply the tipping point, and we’re beginning to see traders react to it.”
Municipal Waste has gone from its underground party-thrash roots to become a major market-shaping force, according to HPL’ research. From January 2003 through August 2013, the correlation between fun had at Municipal Waste concerts and the daily value of the dollar against major U.S. trading partners was -.82. Data available from January 2001 through January 2003 (before the band was signed to Earache Records) shows a correlation between fun had at Municipal Waste concerts and the value of the dollar of -.08. These numbers may seem small, but they have gross consequences. The difference between the two indicates that fun had at Municipal Waste concerts and the value of the dollar tend to have a negative correlation.
“U.S. health and national security is threatened when the value of the dollar is intertwined with fun had at Municipal Waste concerts, which continually feed the U.S. trade deficit,” said J.P. Morgan Chase chief economist Jeremy Johnson. “We need tight regulation of how people enjoy themselves at Waste shows – and we need to do it by setting a cap and floor on fun had, as well as open up new markets for trading allocations of fun, or “fun derivatives”.”
Anti-bank politicians disagree. “Municipal Waste has become a Too Fun To Fail band,” said California congresswoman Elizabeth Boxer. “By no fault of theirs or the governments’ – it was the big banks that allowed the band to become so intertwined with the fate of our economic system.”
This week’s events come at the tail end of a month of bad press for Wall Street. J.P. Morgan has come under ire for manipulating energy prices for thousands of consumers, The New York Times recently released an investigative report about Goldman Sachs’ shady dealings with commodities like aluminum, and nearly every bank is being accused of rigging foreign-exchange FX markets, which play a key role in maintaining currency values.
Brigham sided with Boxer on the issue of regulation versus litigation, while also raising the crisis alarm. “Do I think financial institutions should be held accountable for the losses sustained this week? Should the pension funds for teachers in California, autoworkers in the Rust Belt, and police officers in North Jersey that are going to take the biggest hits be held responsible? Not when the reckless speculation in Municipal Waste-related markets that led to this crisis was done by bankers at the Goldman Sachses of the world. So, yes.”
“This is far from over. Normally Municipal Waste “f**k’s up” its fans. This time, Wall Street may have engineered a system in which the band will “f**k up” five years of economic growth and recovery following the sub-prime mortgage crisis.”
Jari Hjekvik contributed additional reporting from Helsinki.