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3bc7ce5
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The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street it was a machine that turned lead into gold.
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recession
wall-street
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Michael Lewis |
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dde2eeb
|
"When you're a conservative Republican, you never think people are making money by ripping other people off," he said. His mind was now fully open to the possibility. "I now realized there was an entire industry, called consumer finance, that basically existed to rip people off."
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republican
fraud
mortgage-loans
steve-eisman
recession
wall-street
|
Michael Lewis |
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effde52
|
Sir Gerald Moore: I was at dinner last evening, and halfway through the pudding, this four-year-old child came alone, dragging a little toy cart. And on the cart was a fresh turd. Her own, I suppose. The parents just shook their heads and smiled. I've made a big investment in you, Peter. Time and money, and it's not working. Now, I could just shake my head and smile. But in my house, when a turd appears, we throw it out. We dispose of it. We flush it away. We don't put it on the table and call it caviar.
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mentors
mentor
wall-street
disappointment
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Tom Wolfe |
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2ee15a7
|
Wisdom, itself, is often an abstraction associated not with fact or reality but with the man who asserts it and the manner of its assertion.
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wisdom
wall-street
foolishness
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John Kenneth Galbraith |
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8a1e306
|
I thought instead of a good rule for survival on Wall Street: Never agree to anything proposed on someone else's boat or you'll regret in in the morning.
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humor
wall-street
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Michael Lewis |
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f5a7cc7
|
"The Piranha didn't talk like a person. He said things like "If you fuckin' buy this bond in a fuckin' trade, you're fuckin' fucked." And "If you don't pay fuckin' attention to the fuckin' two-year, you get your fuckin' face ripped off." Noun, verb, adjective: fucker, fuck, fucking. No part of speech was spared. His world was filled with copulating inanimate objects and people getting their faces ripped off."
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bond-trading
human-piranha
salomon-brothers
wall-street
|
Michael Lewis |
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f9fe15f
|
A credit default swap was confusing mainly because it wasn't really a swap at all. It was an insurance policy, typically on a corporate bond, with semiannual premium payments and a fixed term. For instance, you might pay $200,000 a year to buy a ten-year credit default swap on $100 million in General Electric bonds. The most you could lose was $2 million: $200,000 a year for ten years. The most you could make was $100 million, if General Electric defaulted on its debt any time in the next ten years and bondholders recovered nothing. It was a zero-sum bet: If you made $100 million, the guy who had sold you the credit default swap lost $100 million. It was also an asymmetric bet, like laying down money on a number in roulette. The most you could lose were the chips you put on the table; but if your number came up you made thirty, forty, even fifty times your money.
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credit-default-swap
wall-street
|
Michael Lewis |
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2b4c553
|
In order to remain undead, I must steal the life force of someone whose fate matters less to me than my own.' I've always supposed that Wall Street traders utter essentially the same sentence.
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vampirism
wall-street
vampires
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Thomas C. Foster |
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d95835d
|
"What Gutfreund said has become a legend at Salomon Brothers and a visceral part of its corporate identity. He said: "One hand, one million dollars, no tears."
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john-gutfreund
john-meriwether
liars-poker
salomon-brothers
wall-street
game
|
Michael Lewis |
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6d96685
|
But everyone wanted to be a Big Swinging Dick, even the women. Big Swinging Dickettes.
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success
wall-street
|
Michael Lewis |
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901c159
|
"They had stumbled either upon a serious flaw in modern financial markets or into a great gambling run. Characteristically, they were not sure which it was. As Charlie pointed out, "It's really hard to know when you're lucky and when you're smart."
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|
cornwall-capital
credit-default-swaps
james-mai
subprime-mortgage-bonds
recession
wall-street
|
Michael Lewis |
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0a0f7e7
|
"Because the lenders sold many--though not all--of the loans they made to other investors, in the form of mortgage bonds, the industry was also fraught with moral hazard. "It was a fast-buck business," says Jacobs. "Any business where you can sell a product and make money without having to worry how the product performs is going to attract sleazy people."
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|
recession
wall-street
|
Michael Lewis |
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9b4d61f
|
The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans.
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|
mortgage-bonds
recession
wall-street
|
Michael Lewis |
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1c2c34f
|
"Corporate finance, which services the corporations and governments that borrow money, and that are known as "clients," is, by comparison, a refined and unworldly place. Because they don't risk money, corporate financiers are considered wimps by traders."
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traders
wall-street
|
Michael Lewis |
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615584f
|
On Wall Street, Clarence was a diamond in a sea of glass, never greedy, never an ambulance-chaser, never the kind of person who deserved to die in the way that he did.
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morality
greed
wall-street
september-11-attacks
glass
|
Rebecca McNutt |
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f46a433
|
On its surface, the booming market in side bets on subprime mortgage bonds seemed to be the financial equivalent of fantasy football: a benign, if silly, facsimile of investing. Alas, there was a difference between fantasy football and fantasy finance: When a fantasy football player drafts Peyton Manning to be on his team, he doesn't create a second Peyton Manning. When Mike Burry bought a credit default swap based on a Long Beach Savings subprime-backed bond, he enabled Goldman Sachs to create another bond identical to the original in every respect but one: There were no actual home loans or home buyers. Only the gains and losses from the side bet on the bonds were real.
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goldman-sachs
mike-burry
subprime-mortgage-bonds
wall-street
|
Michael Lewis |
|
7f4f452
|
"That City of yours is a morbid excrescence. Wall Street is a morbid excrescence. Plainly it's a thing that has grown out upon the social body rather like -- what do you call it? -- an embolism, thrombosis, something of that sort. A sort of heart in the wrong place, isn't it? Anyhow -- there it is. Everything seems obliged to go through it now; it can hold up things, stimulate things, give the world fever or pain, and yet all the same -- is it necessary, Irwell? Is it inevitable? Couldn't we function economically quite as well without it? Has the world got to carry that kind of thing for ever? "What real strength is there in a secondary system of that sort? It's secondary, it's parasitic. It's only a sort of hypertrophied, uncontrolled counting-house which has become dominant by falsifying the entries and intercepting payment. It's a growth that eats us up and rots everything like cancer. Financiers make nothing, they are not a productive department. They control nothing. They might do so, but they don't. They don't even control Westminster and Washington. They just watch things in order to make speculative anticipations. They've got minds that lie in wait like spiders, until the fly flies wrong. Then comes the debt entanglement. Which you can break, like the cobweb it is, if only you insist on playing the wasp. I ask you again what real strength has Finance if you tackle Finance? You can tax it, regulate its operations, print money over it without limit, cancel its claims. You can make moratoriums and jubilees. The little chaps will dodge and cheat and run about, but they won't fight. It is an artificial system upheld by the law and those who make the laws. It's an aristocracy of pickpocket area-sneaks. The Money Power isn't a Power. It's respectable as long as you respect it, and not a moment longer. If it struggles you can strangle it if you have the grip...You and I worked that out long ago, Chiffan... "When we're through with our revolution, there will be no money in the world but pay. Obviously. We'll pay the young to learn, the grown-ups to function, everybody for holidays, and the old to make remarks, and we'll have a deuce of a lot to pay them with. We'll own every real thing; we, the common men. We'll have the whole of the human output in the market. Earn what you will and buy what you like, we'll say, but don't try to use money to get power over your fellow-creatures. No squeeze. The better the economic machine, the less finance it will need. Profit and interest are nasty ideas, artificial ideas, perversions, all mixed up with betting and playing games for money. We'll clean all that up..." "It's been going on a long time," said Irwell. "All the more reason for a change," said Rud."
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money
the-city
wall-street
regulation
finance
power
|
H.G. Wells |
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7978c20
|
Before Volcker's speech, bonds had been conservative investments, into which investors put their savings when they didn't fancy a gamble in the stock market. After Volcker's speech, bonds became objects of speculation, a means of creating wealth rather than merely storing it.
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business-cycle
federal-reserve
interest-rates
money-supply
paul-volcker
bonds
wall-street
|
Michael Lewis |