Michael Lewis’s tour of Europe lands him in Germany this week, where he writes an unbelievably raunchy epic and relies on an elaborate metaphor to justify some sightseeing that Tabitha Soren might not otherwise approve of:
The Hamburg red-light district had caught [anthropologist Alan] Dundes’s eye because the locals made such a big deal of mud-wrestling. Naked women fought in a metaphorical ring of filth while the spectators wore plastic caps, a sort of head condom, to avoid being splattered. “Thus,” wrote Dundes, “the audience can remain clean while enjoying dirt!” Germans longed to be near the shit, but not in it. This, as it turns out, was an excellent description of their role in the current financial crisis.”
We are not the only ones to find this metaphor a little strained. In any case, when he’s not looking for shitshows of the literal variety, he’s in town to try to figure out why German state-owned Landesbanks lost so much money on subprime CDOs peddled by American banks:
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Wing Chau, a manager of collateralized debt obligations, according to a complaint filed Feb. 25 in Manhattan federal court, claims the book unfairly casts him as one of the “villains” responsible for the 2008 financial collapse. The book “depicts Mr. Chau as someone who ignored his professional responsibilities, made misrepresentations to investors, charged money for work that was not performed, had no stake in the CDOs he managed, was incompetent or reckless in carrying out his responsibilities, and violated his fiduciary duties by putting the interests of ‘Wall Street bond trading desks’ above those of his investors,” according to the complaint…Steve Eisman is described in the complaint as “one of the principal sources Lewis relied on in writing ‘The Big Short.’” [Bloomberg]
If you’ve also got some downtime circa 3PM today, you can get them answered during Mike’s “live-chat,” where he’ll be talking about, among other things, “why Wall Street hasn’t learned.” You can get in on the conversation here or here: Continue reading »
Some serious crystal balls on this one.
If he had, I don’t think he would’ve made the following prediction, or the even insanely ballsier one that some GS employees will leave the firm to start hedge funds.
“This is a prediction that is going to come back and haunt me, but I think that Goldman Sachs is doomed. I don’t think that in its current form it can survive. We could be looking at four to five years, but the proprietary activities will split off, those people will end up in their own hedge fund – that is if new regulation doesn’t forbid it anyway.” The PR problems, Lewis thinks, will just be insurmountable. “Their relationships with customers on every front are poisoned, and they can’t function as an investment consultant if they have this problem of honesty.”
The Scrooge of Wall Street who says we should blame Americans [CityAM via BI]
“While debating changes to Fannie Mae and Freddie Mac, Senate Banking Committee Chairman Chris Dodd (D-Conn.) told his colleagues: “Read this new book, ‘The Big Short.’” Senate Majority Leader Harry Reid (D-Nev.) was decrying Republican obstructionism on the floor when he said, “I recommend everyone within the sound of my voice to read the book.” It’s terrific for people who haven’t spent a lot of time on” the subject, Levin said. “My wife is really into it. I read it, marked it up for my staff, underlined it, made copies and asked them to read it.”
The Big Short A Hot Read On Hill [Politico]
The problem this time around, according to ML? Was that “most of the dicks were stupid.” Stewart’s two cents: “The entire financial market was a bunch of George Costanazas, telling lies they believed.” (And banging their cleaning ladies on the desk, do not forget that.) Also, note the cat-calling for Einhorny from the audience. Nice to see others finally getting on board.
One sick fuck.
“To put it in the crudest possible way, these firms have to be smaller and less profitable,” Lewis told Reuters. “If they were regulated properly and the rules of their game were sane, it would be less profitable to be a trader at a big Wall Street firm … It is really a war over money.”
Earlier: Michael Lewis: “No Intelligent Person Who’s Sitting On Wall Street Can Think Of Themselves As Anything But Overpaid”
A.K. Barnett-Hart says check yourselves.
A word of advice to any asshats currently hard at work figuring out how to cause the next financial crisis: AK Barnett-Hart is watching you. In fact, you’re the reason the second year investment bank analyst, who wrote her senior thesis about the market for subprime mortgage-backed CDOs (which Michael Lewis called “more interesting than any piece of Wall Street research on the subject”), got into this line of work. To police you fuckers, and clean this place up. From Deal Journal: Continue reading »
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Speaking of Lewis, Janet Tavakoli had a few things to say about him and The Big Short this morning– the book gets the crisis all wrong, and Mike is a “girlie man” and a “eunuch.”
Of course, we loved bringing you the marijuana defending, tired-of-you-stupid-limited-partners-already, I’m picking up my toys and going home farewell letter of former hedge fund manager Andrew Ladhe. Our referring you to the coverage of said letter by Michael Lewis (really, don’t you think he’s gotten very bittery-sour-grapes-like about markets since Liar’s Poker?) is more a duty-bound kind of obligation. Still, it has its moments.
We fully expect that the likes of Lewis (and market schadenfreuden everywhere) will get quite vocal in the weeks to come. Might as well get used to it now.
This Hedge Fund Manager Tries to Short Himself [Bloomberg]
