Money, Cash, Prose

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A swan-dive into the world of finance journalism, as experienced here. A WE ARE YOUR FEK production.
  • March 29, 2011 12:30 pm

    Sleigh Bells - “Riot Rhythm”

    This is mostly what I listened to while reading The Big Short: Music that has the distinct characteristic of epitomizing chaos, mischief, and blunt trauma psychosis. Which is how The Big Short essentially reads. I said it before, but: it’s like watching a movie where everybody is some kind of villain, but the protagonists - Steve Eisman, Mike Burry, the Cornwall Capital boys, that dickbag from Deutsche Bank nobody likes - are by and large heroes in this story, because they represent tectonic breaks in traditional thinking. The underdog factor is hysterical, even as these guys win millions of dollars against the guys who wouldn’t listen to them as they were informed - repeatedly - that they were about to rob everyone blind. I still have yet to read the original paper that the book was based on, but I did get to Peter Lattman’s great interview with the girl who wrote it at Harvard, which acts as a nice primer.

    But: If this is where The Big Short started, or at the very least, Lewis’ investigation - and not like I’ve got to the time to read them, but it’s probably worth an exercise - where are the next generation of papers like this emerging from, and who’s writing them? Or was this the exception to the rule of otherwise unreadable thesis papers churned out by even the best grad and B-School programs in the country? 

  • March 28, 2011 12:55 pm

    "describing the financial system by describing the holes in it"



    What’s great about The Big Short … is that you realize about halfway through it that it’s a lot like Gone in 60 Seconds: the good guys are, at best, car thieves. That said, they’re still better than the bad guys, who are the worst suckers in the history of suckers. … So while, sans-context, you shouldn’t root for the car thieves/small hedge fund managers who predicted all of this to win, in the scheme of these particular things, how can you not? These guys continued to try and warn everyone off of a financial apocalypse scenario, and when nobody would listen, well, they just pulled the lever and every slot in the house rang up Triple-7s as they told the casinos would happen. It’s a great story.


    I wrote a 6/1/2010 post about The Big Short and quoted from a radio interview Michael Lewis did. (If you follow that last link, you’ll see that there’s way too much throat-clearing in my old post, and you can skip all of it by scrolling down to the paragraph that starts with “The Big Short is superb for the same basic reason Nat Fein’s photo of Babe Ruth’s retirement is superb.”

    Here’s why I’m even mentioning my old post: What Lewis said in that radio interview fits with what Foster Kamer wrote above. Lewis told the interviewer …

    Why did they see what other people couldn’t see? Why did they see that this market was doomed? And the more I kicked around with them, the more I came to see that their decision to make this bet against the financial system was very deeply rooted in either their experiences or their character or theories about financial markets. And I also came to see that if I could describe these people, I would be describing traits that really should have been present in the financial system that weren’t. It was a way of describing the financial system by describing the holes in it. 

    While Foster is at it, he should also listen to this, this, and this and read the original Michael Lewis Wall Street book, Liar’s Poker. Here’s the passage from Liar’s Poker that stuck with me most:

    When the firm was a partnership (1910-1981) and managers had their own money in the till, loose controls sufficed. Now, however, the money didn’t belong to them but to the shareholders. And what worked for a partnership proved disastrous in a publicly owned corporation. Instead of focusing on profits, trading managers focused on revenues. They were rewarded for indiscriminate growth.

    Just so we’re clear, those words were in a book that Lewis published in the late 1980s.