Rob Copeland, Lauren Hirsch and Maureen Farrell
There was little rest on Wall Street this weekend. There was plenty of anger, anxiety, frustration, and fear.
Anger at President Trump for a brash and chaotic rollout of tariffs that erased trillions of dollars in value from the stock market in two days. Anxiety about the state of the private equity industry and other colossal funds with global investments. Frustration among Wall Street’s elite at their sudden inability to influence the president and his advisers.
And fear of what may come next.
Hedge funds tallied up their losses, and bragged if they only lost a little. Bankers and lawyers tore up already sparse calendars for deal making, reasoning that no chief executive would risk a big merger or public offering soon. Major banks played out emergency scenarios to guess whether one client or another would fail in the cascading effects of an international trade war.
In conversations with The New York Times over the weekend, bankers, executives and traders said they felt flashbacks to the 2007-8 global financial crisis, one that took down a number of Wall Street’s giants. Leaving out the brutal, but relatively short-lived market panic that erupted at the start of the coronavirus pandemic, the velocity of last week’s market decline — stocks fell 10 percent over just two days — was topped only by the waves of selling that came as Lehman Brothers collapsed in 2008.
Like then, the breadth of the sudden downdraft — with oil, copper, gold, cryptocurrencies and even the dollar caught up in the sell-off — has Wall Street’s biggest players wondering which of their competitors and counterparties was caught off guard. Banks have asked trading clients to post additional funds if they want to continue borrowing money to trade — so-called margin calls that haven’t nearly reached the level of a generation earlier but are nonetheless causing unease.
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