SALON

Wednesday, Jun 9, 2010 10:01 PM UTC

Why does Wall Street hate America (in the World Cup)?

Goldman Sachs, UBS and JP Morgan all predict a quick exit for the U.S. in the big soccer tournament

By

Topics: World Cup, War Room, Bank Bailouts, Goldman Sachs,

Why does Wall Street hate America (in the World Cup)?U.S. national soccer team midfielder Landon Donovan, right, speaks as coach Bob Bradley, left, looks on during a news conference in Irene, South Africa, Wednesday, June 9, 2010. The U.S. team is preparing for the upcoming World Cup, where it will play in Group C. (AP Photo/Elise Amendola)(Credit: AP)

Destroying the global economy and plunging the world into recession is one thing. But now Wall Street has gone too far.

Preparing for the World Cup, three big banks issued data-heavy reports predicting which nation will bring home the trophy (Update: That trophy is no longer named for Jules Rimet, as this post originally stated): UBS, JP Morgan and Goldman Sachs. And none of them show much love to the United States — no matter how much Washington has agreed to help them stay on top of global commerce in the wake of the economic collapse.

The recipient of $25 billion in TARP funds in 2008, Morgan is by far the worst offender. Its guide to the tournament, produced by the bank’s “quants” (yes, that’s the same term used for the math wizards whose models utterly failed to predict the collapse of the housing market), expects the U.S. to lose to England on Saturday, follow that up with a loss to unheralded Slovenia on June 18, then finally salvage some pride with a win over Algeria on June 23 — which would be too little, too late to advance to the tournament’s knockout stage. And just like that, the Yanks would head home, losers, along with the likes of New Zealand, Paraguay and North Korea.

Goldman’s team, in its report (PDF), wasn’t that much more generous to the nation that’s treated the firm so well over the years. “Group C looks very friendly to England, and in an effort to help boost the game in the U.S., let’s assume they come second!” the Goldman analysis says. “Both Algeria and Slovenia may have good grounds to question this.” In other words, the bank doesn’t really expect the U.S. to advance to the round of 16, but since this whole thing is just a silly exercise designed to get them publicity (you’re welcome, Goldman), the writers threw U.S. Soccer a bone. Then again, while Goldman did get $10 billion in TARP funds a couple of years ago to stay in business, it’s had a more tumultuous relationship with the government since then. Maybe if the SEC hadn’t sued the bank, they would have picked the U.S. to win it all!

Meanwhile, the Swiss bankers at UBS — who didn’t take any money from the U.S. government (but did get a bailout from their own taxpayers) — appear to predict that the U.S. will, at least, advance from the group stage to the single-elimination round. (Though only barely, and their chart ranks South Africa, Mexico, France and Uruguay — who can’t all make it, because only two teams from their common group will advance — as likelier to move on.) But they give the U.S. less than a 13 percent chance of winning their first knockout game, in which the Americans would likely face Germany.

Yes, I realize I’m taking these predictions more seriously than they’re intended to be taken, and that the reports are — as you might expect for a research document prepared by investment firms — larded up with disclaimers about past performance and statistical models being no guarantee of future returns. Still. This is the World Cup! It’s serious business! And for these Wall Street bankers to blithely write off the U.S. cause as hopeless — or worse, as Goldman does, a charity case — is downright un-American.

So if they don’t like America, which nation’s citizens do these cold-hearted bankers think will be dancing in the streets after the July 11 finals? UBS picked Brazil, five-time winners already. Goldman put Brazil in the final — but in a rare nod to style over mathematical models, picked Spain to beat them: “Here we are going to go against history and stick with flair.” And JP Morgan, picking Slovenia to make it all the way to the semifinals after edging out the U.S. for a spot in the knockout rounds, predicts England will beat Spain — on penalties — for its second-ever World Cup title. (For what it’s worth, I don’t expect the U.S. to win the tournament; I do expect them to advance to the second round, behind England, and maybe win another game if they get lucky. Spain will probably win, which would be fine with me, but I’m really rooting for Argentina, and I wouldn’t mind the Netherlands winning, either.)

These reports, then, should give anyone in America plenty of motivation to watch the U.S.-England game on Saturday: Not only is the U.S. the underdog, but Wall Street is rooting for the English. No, an upset win this weekend won’t fix the economy and undo the damage years of corporate influence have had on our politics. But it might help humble some smug bankers somewhere. And if that’s not a victory, what is? U.S.A.! U.S.A.!

Mike Madden is Salon's Washington correspondent. A complete listing of his articles is here. Follow him on Twitter here. More Mike Madden.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 14 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

World Cup fever sweeps South Africa, June 11, 2010
South Africa is hosting the19th FIFA World Cup, which began on June 11 and concluded on July 11. This is the first time the tournament was held in Africa. More than 200 national soccer teams began competing three years earlier

for the 32 slots in the tournament. World Cup matches were played in cities across South Africa, including Johannesburg, Durban and Cape Town.

Continue Reading

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
Journalists file suit against Manning's trial secrecy: Plaintiffs including Glenn Greenwald and Julian Assange demand press, public access to trial and documents
139 points140 points | comment
vote
Report: Nearly a quarter of Americans struggle to afford food
121 points122 points | 12 comments
vote
Kaitlyn Hunt refuses plea offer, will go to court over high school relationship - The 18-year-old rejected a deal that would have labeled her a sex offender and placed her under house arrest
108 points109 points | 84 comments
vote
Kaitlyn Hunt refuses plea offer, will go to court over high school relationship - The 18-year-old rejected a deal that would have labeled her a sex offender and placed her under house arrest
100 points101 points | 28 comments
vote
Ted Cruz against the world - How the Junior Senator is igniting the GOP civil war
74 points75 points | 19 comments

From Around the Web

Presented by Scribol
listener_new_rect The Listener: Chekhov's story mirrors Russia's own

Recommendations