2,000 Wall Streeters just had a meeting in Las Vegas and they all kept making the same awkward noise

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One distinct noise dominated the biggest Wall Street conference of 2017. It wasn’t the Wolf of Wall Street types screaming at the craps table, or the plink-plink-plink of slot machines as dad-bros clinked scotch-filled glasses over market talk.

The noise was nervous laughter, and for what is supposed to be the biggest Wall Street party of the year, it was incredibly weird.

We’re talking specifically about the Skybridge Alternatives Conference (SALT) — an annual hedge fund meeting (and party) for the 1%.

If you’ve never been to a days-long Wall Street conference in Las Vegas, let me explain to you what it’s like. You, the attendee, sit in dark rooms while the sun is shining. You wear dark suits inside while all the happy civilians are wearing bathing suits and jumping in pools outside. While you are listening to lecture after lecture about credit conditions and opportunities in the stock market, the rest of the world is making slot machines ring and drinking off their hangovers.

This experience is best when the mood is light — when the market is strong and tail winds are pushing you forward. In years like that, one can seamlessly transition from of a world leader’s one-on-one interview and to a bunch of hedge fund dad-bros crushing champagne by the pool. This year at SALT, though, the mood was not light.

It’s true that the US market is near record highs, but the money men can feel that the wind is turning all across the world. In fact, the millionaires and billionaires at SALT have been feeling it for weeks. And that’s why the halls and auditoriums of the Bellagio hotel were filled with one distinct sound.

Nervous laughter.

Even the Masters of the Universe, the men at the highest heights of this country, are starting to worry about what it’s like to fall. President Trump, a man they thought they could level with, is starting to show that his critics were right to worry about his erratic behaviour and inexperience. No one knows when a market slide will happen, or if it will happen at all.

They have been wrong before, and they hope they’re wrong now.

A master of none

There was no one who could get the nervous laughter going at SALT better than the chairman of the conference himself, Anthony Scaramucci. He has long been known on Wall Street as a man who sees opportunity and takes it, even if it means biting off more than he can chew.

And his opening remarks were about something like that. Last May, right before last year’s conference, Scaramucci pledged his loyalty to Donald Trump and joined the President’s campaign. Unfortunately for him, the position he thought he would receive in the White House has not materialised.

Instead of hiding from this, he dove into it head-on and explained his current position as he addressed a dark crowd of worried money men.

“If (Trump) wants me to serve, I’m ready to serve. If he doesn’t want me to serve that’s fine,” Scaramucci said. “I have no bitterness about it. It’s politics,” he said,

He also acknowledged that not a lot of the people in the room were Trump fans. At this time last year, Scaramucci was in Trump conversion mode, this year he was in Trump conciliation mode.

As part of his attempt to soften the crowd, Scaramucci told the story of what he found on the campaign trail with Trump. At a campaign stop in Albuquerque, New Mexico, the millionaire met hundredaires (at best). People holding down multiple jobs just to survive. He shook their hands and heard their stories. He related it to his own working-class upbringing as an Italian kid on Long Island. He found alongside the tragedy of America’s wealth gap a feeling of connection to ordinary people.

“I spent 28 years of my life trying to join the global elite,” he said with a hint of regret. “But it took a billionaire who lives on Fifth Avenue in a tower next to Tiffany’s jewellery store to show me what I missed.”

Nervous laughter.

The Chorus

Just after Scaramucci spoke on Wednesday, Ben Bernanke, the former chair of the Federal Reserve and formerly one of the most powerful men in the world, shared his thoughts. He said that Trump’s lack of leadership was a “reasonable concern.”

“I did not anticipate how these various issues, Russia and so on, would create uncertainty,” he said.

Bernanke also said that what Wall Street called the “Trump trade” was “overdone.”

As you know, after Trump was elected the market rallied sky-high — like a rocket off to Mars to meet Jesus.

The standard explanation for this glorious move was that Wall Street expected tax cuts for corporations and the rich. It expected infrastructure spending and a Congress that would ignore deficit reduction. It expected the rollback of regulations on our banking system, on our energy companies, of Obama-era measures meant to protect land and sea and sky.

Bernanke gently pointed out, as one would tell a child there is no tooth fairy, that there is no Trump trade. The tax cuts, infrastructure spending, and deregulation are not coming. Bernanke told Wall Street: You will not have what you were dreaming of. Some people are not who they say they are.

This is where we are now. The money guys in the room have realised that Trump can and will do nothing for anyone other than himself, with the long-hoped for economic policies vanishing in the face of scandal — of Russian intrigue, of accusations of corruption and mendacity.

And so Trump has become another major stressor for an industry that’s been worried about clients demanding lower fees and higher returns since 2015. At SALT the mood was darker and attendance was lower than in years past. Wall Street, just like the market, is starting to crack ever so slightly in the face of uncertainty.

That slow realisation is what the nervous laughter is all about.

Pointing out that things can get worse still, Erik Schatzker, the moderator of Bernanke’s talk, asked him simply, “what if loyalty becomes the number one requirement for Fed Chairman?”

Nervous laughter.

If the Fed Chair has no credibility, people won’t believe in the markets, Bernanke responded gravely.

What, then, is there to believe in? This is all coming at a time when the industry has more than enough to worry about. Returns have been weak for years, fees are going lower and hedge funds are blowing up. Uncertainty in Washington is the last thing anyone needs.

Louder and louder

Billionaire investor Jeff Gundlach of DoubleLine Capital, the man known as Wall Street’s “bond god,” spoke at the conference from a studio in Los Angeles, appearing as a hologram during lunch time. A year before, he predicted that Trump would win the election, but he didn’t seem thrilled about it either then or now.

“Trump says inconsistent things from time to time, you may have noticed,” he said.

Nervous laughter.

On the other side of the political spectrum, billionaire Chicago-based real estate investor Sam Zell defended Trump at the conference.

“All of this is excessive,” he said of Trump’s Russia scandals. “Not much will come of this.”

There was no laughter there, but Zell, notorious for decrying the danger of economic redistribution and his hatred of Barack Obama and liberals at large, did get a laugh later. While extolling the virtues of the deregulation of the coal industry he offered another story from China — one that seemed to illustrate the opposite point of what he was making.

The air quality in Beijing is so bad as a result of coal-burning power plants, Zell said excitedly, that after a trip there “my pilot told me we had to take the plane back to Chicago and clean it before we got to New York City or we’d lose the paint job.”

Nervous laughter (with an audible groan).

The groan was so loud, in fact, that Zell’s moderator, Fox News’ Liz Clayman, took a jab — “God forbid you lose the paint job,” she joked.

‘Wake up’

The stand-out keynote speech of the conference was former Vice-President Joe Biden’s address on Thursday evening. For quite a bit of his talk he had his head in his hands.

That’s because Biden, as you probably already know, is not very good at hiding his emotions. This time he was showing clear disappointment.

“We need to think BIG!” Biden exclaimed to the silent crowd of mesmerised money men.

He explained that the America he sees now is an America that thinks little of itself. It’s an America that pretends it can only take on small challenges, rather than energetically tackle big ones. It is a tired and small America, not an exhilarated America — or rather, the America Biden knows and would prefer.

It is an America where people behave selfishly and cling to what they know, rather than one where people work with their fellows to forge another rich and glorious American century.

Today that makes us weak, but we are only weak today because we are afraid.

Biden does not believe America is a country of sudden losers. He believes in facts. Yes, the future brings violent change along with it. But we are a country of solutions — of the “most nimble” venture capitalists, and more research universities than any other country in the world. We are blessed with arable land and a healthy population. We, according to a man who knows we desperately need to hear it, can do anything we put our minds to.

And so we should.

In that dark room of nervous suits, Biden explained the truth. If America invests in America, America will be nothing but great. And then he said something that makes money men uncomfortable. He said there is no proof that people keeping their tax money for themselves and for their children will enrich the economy. But education will. Investing in public goods will. Focusing on the future will.

“Raise your hand if you think 12 years of education is enough in this economy,” he said to the crowd.

Nervous silence.

So we need $US9 billion, Biden said. To Wall Street that’s nothing. They know that for America it’s nothing. But that $US9 billion will pay for free community college for the people who want it, Biden said. That, in turn, will add two-tenths of a per cent to GDP.

“Wake up,” he demanded.

It was an order, but it will be hard to comply with. Trump has made Wall Street wonder whether the party in the market is over. And quietly in Las Vegas, they wondered if this would be the last SALT they would attend. You would think given the Wall Street image of testosterone charged traders and savvy bankers the business would face this challenge with energy. But that isn’t the case — Wall Street has lost its nerve.

And so what we have here now is lethargy — lethargy and nervous laughter.

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