Thursday, November 20, 2008

Returning to the scene of the crime.

Back in the mid 1980s, Michael Lewis came to Wall Street fresh out of college. He left a few years later, much wealthier but shocked at what he saw. He wrote the book Liar's Poker based on his experiences, and it started him on a new career as a non-fiction writer. He was young and idealistic back then, and he thought Liar's Poker might be the death knell of the excesses he saw in the financial markets. He soon saw the error of his ways, most notably when he got letters from college students who saw his jeremiad as a how to get rich quick self-help book.

Now, nearly twenty years later, Lewis returns to Wall Street to write an article about the new panic. Though the battlefield changed drastically, Lewis sees all the old problems of unchecked greed from every corner and the obliviousness of the people at the top still there, with the people who are doing his old job now armed with financial weapons he could not have dreamed of two decades ago. He gives a great blow by blow account of the collapse of the financial world from the perspective of some bright people who saw the trouble coming and both warned against it and profited from it. They were shorting the financials using clever methods, knowing something bad was coming, not knowing exactly when or how big.

It's a good read, informative and exciting and terrifying, like a well paced thriller about the outbreak of a disease. Unlike bird flu or the flesh eating bacteria, the reader is actually likely to be personally effected by the disaster that is chronicled here, which adds to the article's morbid fascination.

Thanks to my long-time friend and occasional freelance fact checker Ken Rose for supplying me with the link.

5 comments:

DCup said...

I can't ever get over the fact that all that wealth was created by trading in air and promises.

I've got to read that article now.

Splotchy said...

Arrrrrrrrrgh.

jolie said...

for a long time I've been thinking about the cost of georgie bush's moronic global adventures in pissing away our budget surplus, waiting for the other shoe to drop: how long would our economy sustain in the midst of bush's misadventures?

on the one hand, the US is "too big to fail," like AIG I guess; but when the interdependencies of our economy cause financial markets to flounder around the globe, then nothing is too big to fail because it's all failing.

remember when clinton was first elected on a domestic issues platform? his focus coincided with some pretty amazing growth and productivity. it was quite a turn-around from the reagan-bush years.

I'm heartened by obama's focus on domestic policy and the rebuilding of our national infrastructure. we really need a new new deal.

dguzman said...

Thanks for this, Matty Boy. I definitely want to read, but I fear it confirms my idea that human greed truly knows no bounds. I don't understand how those people, those greedy bloodsucking motherfuckers at the top, can even look themselves in the mirror each day.

Matty Boy said...

It wasn't coincidence when George W. Bush told us that the best thing Americans could do to defeat terrorism was to go out and shop. The great engine of world capitalism has been the American consumer for some time now, and the steady growth in the world economy can be attributed to continued growth in how much Americans were willing to spend, with next to no regard for what they were taking in. The negative household savings rate in this country isn't just due stupid poor people, as Republicans might want to tell you, it's a problem across the board.

It's impossible to say how bad things will get, but I see a lot of dominoes and it's easy to see how they could fall if things continue on the current path.