The Big Bluff: Wall Street Traders Burn Down The House

Lately I have been hearing a lot about how Wall Street mortgage market makers who brought the global economies to their knees were “stupid.” MIT Quants, Berkeley physicists, Harvard, Stanford and Wharton MBA’s, we are told, were completely clueless about the upcoming housing collapse. We are supposed to believe that these physics and stochastic calculus majors did not understand that what goes up must come down. 

At the 92 Street Y in New York last week, Michael Lewis, the prolific author of “The Big Short” (out in paperback this month), claimed to NPR’s engaging host Ira Glass that most guys on Wall Street did not see the downturn in housing coming. He further declared that only 10-20 people in the whole industry saw the upcoming crisis – the rest are either “fools or crooks.” The handful of credit default swap (CDS) traders aka “short-sellers” in his book are his “heroes.” “I like these guys,” he announced. “I want the reader to like them too.”   Well, we do like them – as much as we can like people who escalated the collapse of the U.S. financial system and were on the receiving end of hundreds of millions of dollars of government bailout monies. Remember AIG? They were one of the losers on the other side of the trades from Lewis’ “heroes.” I guess that means you and I lost that bet.   Read more  

ABOUT Good Business International

THE PRIMARY GOAL of Good Business International, Inc.™ (GoodB) is to inspire better business practices for a better world and in the process restore public trust in our financial institutions and economic systems.  GoodB acts as  a consumer-to-business advocate for business integrity and citizen oversight. GoodB is a free public service information and research center dedicated to innovating new business models and documenting values-based social, economic, and environmental trends in the Good Business movement nationally and internationally.

 

Follow us on Twitter
@GoodB

"Like" us on Facebook
Good Business International  

 

 GBI11792