This decision unhinged the concept of risk from the concept of return. Compensation was no longer tied to long term profits and success. Clients were no longer the customer. They were just fee generating suckers.Wall Street kept all the profits, took ungodly risks, lost trillions and got bailed out by Main Street. The poker game continues, as these criminals are again paying themselves billions in bonuses at the expense of Main Street. Michael Lewis completes the 20 year circle of greed with his brilliant book:
"The people in a position to resolve the financial crisis were, of course, the very same people who had failed to foresee it. All shared a distinction: they had proven far less capable of grasping basic truths in the heart of the U.S. financial system than a one-eyed money manager with Asperger's syndrome. " The world's most powerful and most highly paid financiers had been entirely discredited; without government intervention every single one of them would have lost his job; and yet these same financiers were using the government to enrich themselves."
CAST OF CHARACTERS
STEVE EISMAN Manager of FrontPoint Financial Services hedge fund, which was owned by Morgan Stanley. During the financial crisis he wished he could have shorted Morgan Stanley. "Even on Wall Street people think he's rude and obnoxious and aggressive," says Eisman's wife. "He has no interest in manners. He's not tactically rude. He's sincerely rude. He knows everyone thinks of him as a character but he doesn't think of himself that way. Steven lives inside his head." The upper classes in this country raped this country. You f*cked people. You built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience. Nobody ever said "This is wrong'." Eisman understood Wall Street thoroughly: "What I learned from that experience was that Wall Street didn't give a sh*t what it sold."
MICHAEL BURRY One eyed doctor turned investment manager who discovered he had Asperger's Syndrome during his quest to be proven right about subprime mortgages being worthless. He figured it out in 2003 by himself. Burry had been "the first investor to diagnose the disorder in the American financial system. Complicated financial stuff was being dreamed up for the sole purpose of lending money to people who could never repay it.
STEVE LIPPMAN Took Michael Burry's idea about shorting subprime mortgages and sold it across Wall Street in order to hedge Deutsche Bank's own subprime portfolio. "I love Greg," said one of his bosses at Deutsche Bank. "I have nothing bad to say about him except that he's a f*cking whack job." A trader who worked near him for years referred to him as "the a**hole known as Greg Lippman."
HOWIE HUBLER Single handedly lost $9 billion for Morgan Stanley with one trade.He was the ultimate Big Swinging Dick as the head of mortgage bond trading who made $25 million the year he lost the $9 billion. CEO John Mack had no clue what his bond traders were doing. Hubler went on vacation and never came back.
John Gutfreund Michael Lewis