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| Link | Quote | Stars | Tags | Author |
| 4cc38aa | The source of his unhappiness was, as usual, other people. | Michael Lewis | ||
| 55a6468 | He walked around the Las Vegas casino incredulous at the spectacle before him: seven thousand people, all of whom seemed delighted with the world as they found it. A society with deep, troubling economic problems had rigged itself to disguise those problems, and the chief beneficiaries of the deceit were its financial middlemen. | Michael Lewis | ||
| c0797b3 | In 2008 it was the entire financial system that was at risk. We were still short. But you don't want the system to crash. It's sort of like the flood's about to happen and you're Noah. You're on the ark. Yeah, you're okay. But you are not happy looking out at the flood. That's not a happy moment for Noah." By" | Michael Lewis | ||
| be099c1 | This was yet another consequence of turning Wall Street partnerships into public corporations: It turned them into objects of speculation. It was no longer the social and economic relevance of a bank that rendered it too big to fail, but the number of side bets that had been made upon it. | Michael Lewis | ||
| 9857276 | To the untrained eye, the Wall Street people who rode from the Connecticut suburbs to Grand Central were an undifferentiated mass, but within that mass Danny noted many small and important distinctions. If they were on their BlackBerrys, they were probably hedge fund guys, checking their profits and losses in the Asian markets. If they slept on the train they were probably sell-side people--brokers, who had no skin in the game. Anyone carry.. | Michael Lewis | ||
| a4e6bc8 | It was in Las Vegas that Eisman and his associates' attitude toward the U.S. bond market hardened into something like its final shape. As Vinny put it, "That was the moment when we said, 'Holy shit, this isn't just credit. This is a fictitious Ponzi scheme.'" In Vegas the question lingering at the back of their minds ceased to be, Do these bond market people know something we do not? It was replaced by, Do they deserve merely to be fired, o.. | Michael Lewis | ||
| 6cb7ce3 | When you're a conservative Republican, you never think people are making money by ripping other people off, | Michael Lewis | ||
| e6b1638 | The market might have learned a simple lesson: Don't make loans to people who can't repay them. Instead it learned a complicated one: You can keep on making these loans, just don't keep them on your books. Make the loans, then sell them off to the fixed income departments of big Wall Street investment banks, which will in turn package them into bonds and sell them to investors. | Michael Lewis | ||
| 5dd0d2e | Once handed the money, Paulson abandoned his promised strategy and instead essentially began giving away billions of dollars to Citigroup, Morgan Stanley, Goldman Sachs, and a few others unnaturally selected for survival. | Michael Lewis | ||
| 6c63ec0 | Why were they prepaying so fast? Vinny asked himself. "It made no sense to me. Then I saw that the reason the prepayments were so high is that they were involuntary." | Michael Lewis | ||
| 73f7918 | The line between gambling and investing is artificial and thin. The soundest investment has the defining trait of a bet (you losing all of your money in hopes of making a bit more), and the wildest speculation has the salient characteristic of an investment (you might get your money back with interest). | Michael Lewis | ||
| dc913d8 | market leader in interest rate swaps. There was a natural role for a blue-chip corporation with the highest credit rating to stand in the middle of swaps and long-term options and the other risk-spawning innovations. The traits required of this corporation were that it not be a bank--and thus subject to bank regulation, and the need to reserve capital against risky assets--and that it be willing and able to bury exotic risks on its | Michael Lewis | ||
| 2e45d7e | How do you explain to an innocent citizen of the free world the importance of a credit default swap on a double-A tranche of a subprime-backed collateralized debt obligation? He tried, but his English in-laws just looked at him strangely. They understood that someone else had just lost a great deal of money and Ben had just made a great deal of money, but never got much past that. "I can't really talk to them about it," he says. "They're En.. | financial-crisis | Michael Lewis | |
| 7904677 | The simple measure of sanity in housing prices, Zelman argued, was the ratio of median home price to income. Historically, in the United States, it ran around 3:1; by late 2004, it had risen nationally, to 4:1. "All these people were saying it was nearly as high in some other countries," says Zelman. "But the problem wasn't just that it was four to one. In Los Angeles it was ten to one and in Miami, eight-point-five to one." | real-estate recession | Michael Lewis | |
| 85adc96 | Household was making loans at a faster pace than ever. A big source of its growth had been the second mortgage. The document offered a fifteen-year, fixed-rate loan, but it was bizarrely disguised as a thirty-year loan. It took the stream of payments the homeowner would make to Household over fifteen years, spread it hypothetically over thirty years, and asked: If you were making the same dollar payments over thirty years that you are in fa.. | Michael Lewis | ||
| daaa56d | The subprime mortgage machine was up and running again, as if it had never broken down in the first place. If the first act of subprime lending had been freaky, this second act was terrifying. Thirty billion dollars was a big year for subprime lending in the mid-1990s. In 2000 there had been $130 billion in subprime mortgage lending, and 55 billion dollars' worth of those loans had been repackaged as mortgage bonds. In 2005 there would be $.. | Michael Lewis | ||
| f083ee6 | Writing a check separates a commitment from a conversation. --Warren Buffett | Michael Lewis | ||
| e98c89b | After that, the men in the room rushed for the exits, apparently to sell their shares in Bear Stearns. By the time Alan Greenspan arrived to speak, there was hardly anyone who cared to hear what he had to say. The audience was gone. By Monday, Bear Stearns was of course gone, too, sold to J.P. Morgan for $2 a share.* | Michael Lewis | ||
| 2897afc | These folks don't know what they're talking about. If losses go to ten percent there will be, like, a million homeless people." (Losses in the pools Hubler's group had bet on would eventually reach 40 percent.)" | Michael Lewis | ||
| 2535281 | Whenever Wall Street people tried to argue--as they often did--that the subprime lending problem was caused by the mendacity and financial irresponsibility of ordinary Americans, he'd | Michael Lewis | ||
| a85f75b | Why, for example, wasn't AIG required to reserve capital against them? Why, for that matter, were Moody's and Standard & Poor's willing to bless 80 percent of a pool of dicey mortgage loans with the same triple-A rating they bestowed on the debts of the U.S. Treasury? Why didn't someone, anyone, inside Goldman Sachs stand up and say, "This is obscene. The rating agencies, the ultimate pricers of all these subprime mortgage loans, clearly do.. | Michael Lewis | ||
| 0979d25 | The less transparent the market and the more complicated the securities, the more money the trading desks at big Wall Street firms can make from the argument. The constant argument over the value of the shares of some major publicly traded company has very little value, as both buyer and seller can see the fair price of the stock on the ticker, and the broker's commission has been driven down by competition. The argument over the value of c.. | Michael Lewis | ||
| 1a8931e | He was like some tragic figure in Greek mythology whose offenses against the gods had caused them to design for him this exquisite torture: you must desperately need to see what you cannot bear to see. | Michael Lewis | ||
| c0aa4ef | If you are going to start a regulatory regime from scratch, you'd design it to protect middle-and lower-middle-income people, because the opportunity for them to get ripped off was so high. Instead what we had was a regime where those were the people who were protected the least." Eisman" | Michael Lewis | ||
| 08cbf02 | Subprime mortgage lending was still a trivial fraction of the U.S. credit markets--a few tens of billions in loans each year--but its existence made sense, even to Steve Eisman. "I thought it was partly a response to growing income inequality," he said. "The distribution of income in this country was skewed and becoming more skewed, and the result was that you have more subprime customers." | Michael Lewis | ||
| c952ac8 | He wore the same shorts and t-shirts to work for days on end. He refused to wear shoes with laces. He refused to wear watches or even his wedding ring. To calm himself at work he often blared heavy metal music. | Michael Lewis | ||
| c094e15 | Every form of strength covers one weakness and creates another, and therefore every form of strength is also a form of weakness and every weakness a strength. | Michael Lewis | ||
| 1d126ec | worth. A baseball team, of all things, was at the center of a story about the possibilities--and the limits--of reason in human affairs. Baseball--of all things--was an example of how an unscientific culture responds, or fails to respond, to the scientific method. As I say, I fell in love with a story. The story is about professional baseball and the people who play it. At its center is a man whose life was turned upside down by professiona.. | Michael Lewis | ||
| f1216ec | Eisman was quick to see narratives, he explained the world in stories, and this was one of the stories he used to explain himself. The | Michael Lewis | ||
| d0d058f | From the end of 2005 until the middle of 2007, Wall Street firms created somewhere between $200 and $400 billion in subprime-backed CDOs: No | Michael Lewis | ||
| f252f99 | The power of an imagination can arise from what it refuses to foresee. | Michael Lewis | ||
| 69eb105 | If it doesn't happen, it never was going to happen. If you never did it, it wasn't there to begin with. | Michael Lewis | ||
| d8a0b5c | There was one sure way, and only one sure way, to get ahead, and everyone with eyes in 1982 saw it: Major in economics; use your economics degree to get an analyst job on Wall Street; use your analyst job to get into the Harvard or Stanford Business School; and worry about the rest of your life later. So, | Michael Lewis | ||
| 9330974 | Men in general judge more by the sense of sight than by the sense of touch, because everyone can see but only a few can test by feeling. Everyone sees what you seem to be, few know what you really are; and those few do not dare take a stand against the general opinion. --Niccolo Machiavelli, The Prince | Michael Lewis | ||
| 94c792b | What do you mean there is no bathrobe in my suite??!! | Michael Lewis | ||
| c9f8eb0 | The trouble, Danny suspected, was that "the understanding of numbers is so weak that they don't communicate anything. Everyone feels that those probabilities are not real--that they are just something on somebody's mind." | Michael Lewis | ||
| 591b117 | Knowledge is literally prediction," said Morey. "Knowledge is anything that increases your ability to predict the outcome. Literally" | Michael Lewis | ||
| afc0d32 | You need to be so careful when there is one simple diagnosis that instantly pops into your mind that beautifully explains everything all at once. That's when you need to stop and check your thinking...Beware of the delirious guy in the emergency unit with the long history of alcoholism, because you will say, 'He's just drunk,' and you'll miss the subdural hematoma. | decision-making pattern-recognition redelmeier thinking | Michael Lewis | |
| 09f7a72 | There was but one question he left unasked, and it vibrated between his lines: if gross miscalculations of a person's value could occur on a baseball field, before a live audience of thirty thousand, and a television audience of millions more, what did that say about the measurement of performance in other lines of work? If professional baseball players could be over-or undervalued, who couldn't? Bad as they may have been, the statistics us.. | Michael Lewis | ||
| e7db9ad | National Sarcasm Society: Like We Need Your Support. | Michael Lewis | ||
| 7a72180 | Because metaphors are vivid and memorable, and because they are not readily subjected to critical analysis, they can have considerable impact on human judgment even when they are inappropriate, useless, or misleading," said Amos. "They replace genuine uncertainty about the world with semantic ambiguity. A metaphor is a cover-up." | Michael Lewis | ||
| 4a59ca5 | The difference in Billy wasn't what had happened to him, but what hadn't. He had a life he hadn't led, and he knew it. He just hoped nobody else noticed. | Michael Lewis | ||
| 840145e | After Gell-Man was done, Amos said, "You know, Murray, there is no one in the world who is as smart as you think you are." | Michael Lewis | ||
| b0c8a3a | When someone says something, don't ask yourself if it is true. Ask what it might be true of. | Michael Lewis |