If you want another insight . . .

If you want another insight . . .

November 16, 2008, 8:43 am
Filed under: Emergency, Failure, General Musings, Government, Politics, Predictions, Preparedness, Society

I have a friend who complains that when he goes to check his usual blogs on Monday mornings, he has to brace himself about the bad economic news I’ve written about on Sunday.  I hadn’t really realized that I had this weekly schedule, but what the hell. In that spirit, if you want another insight into just how f*cked-up the Wall Street financial crisis really is, spend some time with a long piece by Michael Lewis, author of Liar’s Poker. Here’s an excerpt from The End:

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.

He’s talking about his experience on Wall Street over 20 years ago.

It’s long.  It’s fairly dense in places.  But it does a phenomenal job of explaining how we got to the point we have, and how the situation is actually much more grim than most people realize.

OK, I’ll try and post a nice cheery travelogue later.

Jim Downey

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