Moneyball author Michael Lewis explains how Wall Street bleeped us all

funky_mountain · Jan 6, 2009

another interesting piece from lewis (and david einhorn) on the financial problem:
http://www.nytimes.com/2009/01/04/opinion/04lewiseinhorn.html

Fenian_Bastard · Jan 6, 2009

The Big Ragu said:

poindexter said:

The Big Ragu said:

Moody's & S&P weren't doing anything illegal. They built a wrong model -- the way a lot of people built wrong models. They made what was a prevalent mistake of thinking that paper wealth -- the run-up in value of certain assets on paper -- was real wealth. They didn't understand that it was a house of cards that could tumble and because the underlying fundamentals were so weak, it was likely that paper wealth would evaporate. If there was anyone disseminating false information in order to profit at others' expense, I am all for prosecuting. And I am open to that if it can be proven anywhere. But Moody's didn't do anything illegal.
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You and I must not even live on the same planet. Not doing anything illegal?

Did you not watch the congressional hearings this fall? Read the internal emails?

The CEO of Moody's told their board that company employees sometimes "drink the Kool Aid" and accede to pressure for undeservedly high ratings, even as the weaknesses of the securities were becoming apparent.

In one document, an S&P employee in the structured finance division writes: “It could be structured by cows and we would rate it.”

In another, an employee asserts: “Rating agencies continue to create [an] even bigger monster - the CDO market. Let’s hope we are all wealthy and retired by the time this house of cards falters.”

http://emac.blogs.foxbusiness.com/2008/10/23/the-credit-rating-agencies-moment-of-shame/
http://www.hispanicbusiness.com/finance/2008/10/23/congress_mauls_credit_ratings_agency_brass.htm

Get out of here with this garbage that "They didn't understand that it was a house of cards that could tumble." Its insulting.
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Poin, I specifically said, if you or anyone else can prove that anyone at Moody's or S&P intentionally disseminated false info so they could profit from it, I am all for prosecuting. We should prosecute. But what you just linked to, is not proof of anything illegal. It's proof of incompetence. Henry Waxman's typical grandstanding efforts always make for good scapegoating, and the people called to testify made good punching bags. That is what Waxman does. He loves TV cameras and he beats up on people who have screwed up. He's the best Monday Morning QB in the country. But no one is going to jail, precisely because nothing that came out of that hearing proved any illegalities. If you can prove otherwise, I am all for prosecuting.
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It takes a special kind of willful ideological blindness to have watched those hearings and come away primarily offended by how Henry Waxman conducted them.

Cousin Jeffrey · Jan 6, 2009

Small Town Guy said:

There was an item after Lewis's first story for Portfolio (I remember it was on Gawker but originated elsewhere) that he was being paid $12 a word for his stories, although I think that was refuted.

The other thing is, I thought he signed a deal with Vanity Fair that included him writing exclusively for them? Maybe that starts at the beginning of the year.
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if that were true, he would've made more than $100,000 for that one story, which clocked in 9,099 words. It would be truly ironic if his story about Wall Street's demise led to free-spending Portfolio's demise.

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Moneyball author Michael Lewis explains how Wall Street bleeped us all

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Moneyball author Michael Lewis explains how Wall Street bleeped us all

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