Looming Threats

We have identified two looming threats:

The first is the shifting relationship between ambitious young people and money. There’s a reason the Lower 99 currently lack leadership: Anyone with the ability to organize large numbers of unsuccessful people has been diverted into Wall Street jobs, mainly in the analyst programs at Morgan Stanley and Goldman Sachs. Those jobs no longer exist, at least not in the quantities sufficient to distract an entire generation from examining the meaning of their lives.
Our Wall Street friends, wounded and weakened, can no longer pick up the tab for sucking the idealism out of America’s youth. But if not them, who? We on the committee are resigned to all elite universities becoming breeding grounds for insurrection, with the possible exception of Princeton.

The second threat is in the unstable mental pictures used by Lower 99ers to understand their economic lives. (We have found that they think in pictures.)

For many years the less viable among us have soothed themselves with metaphors of growth and abundance: rising tides, expanding pies, trickling down. A dollar in our pocket they viewed hopefully, as, perhaps, a few pennies in theirs. They appear to have switched this out of their minds for a new picture, of a life raft with shrinking provisions. A dollar in our pockets they now view as a dollar from theirs. Fearing for their lives, the Lower 99 will surely become ever more desperate and troublesome. Complaints from our membership about their personal behavior are already running at post-French Revolutionary highs.

We on the strategy committee see these developments as inexorable historical forces. The Lower 99 is a ticking bomb that can’t be defused. They may be occasionally distracted by, say, a winning lottery ticket. (And we have sent out the word to the hedge fund community to cease their purchases of such tickets.) They may turn their anger on others -- immigrants for instance, or the federal government -- and we can encourage them to do so. They may even be frightened into momentary submission. (We’re long pepper spray.) - in Bloomberg

Credit Agencies, An Excerpt From The Big Short

To judge from their behavior, all the rating agencies worried about was maximizing the number of deals they rated for Wall Street investment banks, and the fees they collected from them.

Moody’s once a private company, had gone public in 2000. Since then its revenues had boomed, from 800 million dollars in 2001 to 2.01 billion dollars in 2006. Some huge percentage of the increase –more than half, certainly, but exactly how much more than half they declined to tell Eisman –flowed from the arcane end of the home finance sector, known as structured finance.

The surest way to attract structured finance business was to accept the assumptions of the structured finance industry. “We asked everyone the same two questions,” said Vinny. “What is your assumption about home prices, and what is your assumption about loan losses.” Both rating agencies said they expected home prices to rise and loan losses to be around 5 percent – which, if true, meant that even the lowest-rated triple-B, subprime mortgage bonds crafted from them were money -good.” it was like everyone had agreed in advance that five percent was the number,” said Eisman. “They all said five percent. It was a party and there was a party line.” - an excerpt from the “Big Short”

"The Valley Girl Show" Interview with Bestselling Writer Michael Lewis

Michael Lewis on the Valley Girl Show.

CNBC: Bullish On Books

Boomerang is cited on CNBC`s "Best Books For The Holidays 2011":

“Boomerang: Travels in the New Third World”
By Michael Lewis
224 pages
Publisher: W. W. Norton & Co.
List: $25.95

A must read for anyone who wants to know more about what caused the global financial meltdown and how we are all affected by what happens “over there.” Written by the acclaimed author of "Moneyball," "The Big Short," "The Blind Side," and the iconic "Liar's Poker," this book is based on articles Michael Lewis wrote for Vanity Fair covering "financial disaster tourism, traveling to Iceland, Ireland, Greece, and beyond." Brilliantly written, and at times sadly hilarious knowing what we know now about just how little we knew about our money and those people we trusted.

A Reflection On Greece

Even if it is technically possible for these people to repay their debts, live within their means, and return to good standing inside the European Union, do they have the inner resources to do it? Or have they so lost their ability to feel connected to anything outside their small worlds that they would rather just shed their obligations?

On the face of it, defaulting on their debts and walking away would seem a mad act: all Greek banks would instantly go bankrupt, the country would have no ability to pay for the many necessities it imports (oil, for instance), and the government would be punished for many years in the form of much higher interest rates, if and when it was allowed to borrow again.

But the place does not behave as a collective... It behaves as a collection of atomized particles, each of which has grown accustomed to pursuing its own interest at the expense of the common good. There’s no question that the government is resolved to at least try to re-create Greek civic life. The only question is: Can such a thing, once lost, ever be re-created? - in nybooks.com

Related: National Bank Of Greece (NBG)

The Credit Wasn’t Just Money, It Was Temptation

The credit wasn’t just money, it was temptation. It offered entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Entire countries were told, “The lights are out, you can do whatever you want to do and no one will ever know.” What they wanted to do with money in the dark varied.

Americans wanted to own homes far larger than they could afford, and to allow the strong to exploit the weak. Icelanders wanted to stop fishing and become investment bankers, and to allow their alpha males to reveal a theretofore suppressed megalomania. The Germans wanted to be even more German; the Irish wanted to stop being Irish. All these different societies were touched by the same event, but each responded to it in its own peculiar way. - in www.nybooks.com

Moneyball Trailer

The story of Oakland A's general manager Billy Beane's successful attempt to put together a baseball club on a budget by employing computer-generated analysis to draft his players. - in IMDB

Moneyball: The Art of Winning an Unfair Game (ISBN 0-393-05765-8) is a book by Michael Lewis, published in 2003, about the Oakland Athletics baseball team and its general manager Billy Beane. Its focus is the team's modernized, analytical, sabermetric approach to assembling a competitive baseball team, despite Oakland's disadvantaged revenue situation. A film based on the book starring Brad Pitt was released in 2011. - in Wikipedia

American Journalism Vs. British Journalism

Going from American journalism to British journalism is like going from eating bratwurst to eating Mexican food. - in LA Times

'Boomerang': Money Thrown Out in Hope, Coming Back in Anger

What caused the economic troubles in Iceland, Greece, Ireland, Germany and elsewhere? Author Michael Lewis has some controversial theories involving sweeping character assessments of each nation. - in PBS News Hour

Everybody Tells Stories In New Orleans

"I didn't know anybody who knew anybody who'd written a book, with the one exception of Walker Percy, who was this freak who lived across the lake. But everybody tells stories in New Orleans.

A New Orleanian ran Goldman Sachs in the golden age of Goldman Sachs, [Gustave] "Gus" Levy. And I think it's because he really emerged from New Orleans with an advanced degree in spinning... And the financial world is all about that." - in L.A. Times