[FoRK] wall street over

bill stoddard bill at wstoddard.com
Fri Nov 14 08:00:09 PST 2008


Eugen Leitl wrote:
> http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?print=true
>
> The End
>
> by Michael Lewis Nov 11 2008
>   
It's not over.

Read "When Genius Failed: the Rise and Fall of Long Term Capital Management:
http://www.amazon.com/When-Genius-Failed-Long-Term-Management/dp/0375758259/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1226676611&sr=8-1


Mark Twain said "History doesn't repeat itself, but it does rhyme".  The 
comparison between what happened to LTCM (and the investment banks) and 
what is happening these days on wall street is astonishing.   That blind 
libertarian ideologue Alan Greenspan should be keel hauled for allowing 
it to happen again.

The lure of the big bucks the way these guys do it is addictive like 
crack.  They -know with 100% certainty- they are betting the house (and 
the world economy) every day, that their next hit might bring the world 
tumbling down... but the high of making a few hundred million a day on a 
trade is just irresistible.  All of the investment banks were hit  by 
LTCM... they knew about the dangers of leverage, the outliers that would 
make the counter parties on CDS's unable to meet their obligations,  all 
that gorp, yet they deliberately choose to get back into that exact same 
game again because they just could not resist the high of taking the 
next hit. 

If it were simply a matter of these jokers learning a lesson, it -would- 
be over. Clearly CLEARLY that is not the case.  These guys know the game 
and the high is worth any risk. No, it's not over. Not by a long shot.

“When the music stops, in terms of liquidity, things will get 
complicated. But as long as the music is playing, you've got to get up 
and dance. We're still dancing.”  Charles Prince

Bill



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