Bearish on Christie
Wall St.’s 2nd thoughts
WALL Street is piling up the sell orders on Chris Christie futures — popping a bubble the same traders helped create.
The cast of characters is a bit different from the last time I slammed Wall Street’s rotten political judgment. The New Jersey governor’s big fans in the industry aren’t the bigbank CEOs, but folks like legendary financier Ken Langone and his buddy Hank Greenberg (who built AIG into a powerhouse until Eliot Spitzer forced him out for managers who then led the firm to disaster).
Langone & Co. are said to be dismayed that Christie’s chances for 2016 are dwindling fast. They blame the obsessive coverage of the Bridgegate scandal — which begins to tell you what they’ve missed from the start. Christie’s trafficjam scandal is only the latest example of flaws that make him a far weaker candidate than these guys ever thought.
In fact, it’s too soon to write Christie off: He might be able to re cover from this mess (as long as there continues to be zero evidence that he had any idea his flunkies had snarled traffic approaching the George Washington Bridge to punish a political opponent).
But the Wall Streeters I speak to (people with direct access to Christie and his inner circle) say the Christie presidential campaign is clearly on life support: They think he’s in the clear himself, but the stench from the scandal is starting to look impossible to overcome.
They cite the cool reception Christie has been getting recently from Republican establishment types outside of his home turf in the Northeast, and the fact that many fundraisers are now looking to former Florida Gov. Jeb Bush as the party’s savior.
Christie is “meeting with the RNC establishment, and he’s still trying to decide, but they want him out,” one major Republican fundraiser who runs an investment business told me recently. “I don’t think he can run and be effective. Republicans are held to a different standard by the media. This thing is a killer.”
Maybe that’s a good thing. The Wall Streeters loved Christie because they saw him as a Republican version of the likely 2016 Democrat, Hillary Clinton: He doesn’t come off as too dogmatic on social issues, and they figure that, as a Jersey guy, he’ll understand the needs of Big Finance.
Plus, they’re worried about the Tea Party — which they see as a bunch of nuts out to cut the federal government to 1920s levels. And they applaud his fights with Tea Party favorite Sen. Rand Paul — Christie once called Randian libertarians “very dangerous” for national security.
You start to see Wall Street’s mistakes here: This is a potentially toxic combination for a party that needs unity. There may be some fringe elements among the Tea Party types (and some Washington actors leading the “patriots” down the garden path), but it’s pretty easy to come up with a dozen things that are more dangerous to national security than Rand Paul and people who believe in less government and more attention to the US Constitution. What the Republicans need is somebody who can appeal to both sides of this divide.
Meanwhile, Christie has his own dangers — like apparently thinking he can say or do anything. He didn’t think twice about gushing over President Obama when he visited New Jersey after Hurricane Sandy back in 2012, even as Mitt Romney was locked in a tight race with the president.
Even more bizarre: Christie invited hedgefund honcho Steve Cohen (a big Christie fundraiser) to a private dinner celebrating the governor’s reelection just a day after Cohen’s fund, SAC Capital, pleaded guilty to insidertrading charges.
OK, Cohen himself wasn’t criminally charged, but in indicting the fund, the US Attorney’s office called SAC “a veritable magnet for market cheaters.”
Wall Street might like the fact that Christie stands by his friends like Cohen, but the Republicans need to win the votes of workingclass folks who are allergic to bigfinance skulduggery. Obama is still president because his attacks on Romney convinced these people to stay home on Election Day in 2012. Goodbye to Ohio, Virginia and other swing states.
Bottom line: Even before Bridgegate, Christie was less of a great bet than Wall Street thought. He may not be a terrible one even now (though I hear Langone’s fundraising has been drying up since Bridgegate), but he really needs to show something more before he even thinks about giving up his day job.
And Langone and the rest of Wall Street need to rethink their whole political investment strategy. Stop falling for the glossy prospectus, guys, and start looking at the fundamentals.