Have you read Flash Boys?
Flash Boys: A Wall Street Revolt by Michael Lewis
My rating: 5 of 5 stars
Extraordinary and alarming front row seat view into deeply buried exploitation practices of some Wall Street traders. The good news is that the book also tells the story of a handful of heroic finance whizzes to restore some fairness to the stock market.
Even so, Lewis doesn’t sugarcoat the news that the battle is ongoing, even though some progress is being made. As usual with Lewis, he writes in such an energetically paced and colorful style, that the book is an enjoyable read. Highly recommend for anyone wanting to understand a little bit more about the finance markets and how they work — or don’t work is perhaps more accurate.
And for anyone who needs a glossary to help follow the narrative, here’s a good one that I found online (free): http://www.wallstreetoasis.com/financ…
A cathartic rant on the egregiousness of Wall Street (take it if you need it)
A classic old song popped up on my iPod shuffle this morning, reminding me of something rant-like a United States Senator said a couple of weeks ago during a Congressional hearing on the financial markets. First, the song:
When you wish upon a star,
makes no difference who you are
anything your heart desires
will come to you…
It’s tantamount to blasphemy, I know, to compare the financial free market system in its present incarnation to the pure magnificence of a star. But, in fact, for a long time the extremist proponents of this finance philosophy tried to spin it as if it actually were the lovely fairy tale of the lyrics above. Anybody can play, anybody can win, they said, the system is so very perfect it will reward all who invest wisely.
Not true, of course. The system’s loudest cheerleaders were those who saw it as a way to protect and perpetuate their existing economically privileged positions (aka: the haves are always entitled to have most — or all, really — of the world pie). That was their ideology and it beat the stuffing out of competing ideas.
In Las Vegas terms, these dudes were (are) the “house” (see below). And, as in that betting town, their system ensured that the house always wins the lion’s share (Exhibit A: see third world).
Still, for some time the citizenry by and large tolerated it all. It allowed some earnings advantages to them also. Teachers, accountants, IT workers, plumbers, construction workers, waiters, janitors, police officers, nurses, doctors, lawyers and fire chiefs — i.e., people who actually do something to serve society — were able to create group pension funds to invest in the financial markets and earn a respectable return. Private individuals also were able to build portfolios of more-or-less reliable, longterm investments.
But then, as all know now, the greed-is-good bunch blew it all to pieces. Citizen investors and taxpayers worldwide lost bigtime. The house had gone insane with its own game. So much so that it’s commonplace now to hear mainstream news commentary refer to the Wall Street of today as casino capitalism (or worse).
And if you’ve been following the news about financial reform efforts now finally underway in Washington D.C., then you know that the house is still mad as a hatter and dementedly demanding that it be allowed to remain so.
Rhetorically speaking at least, some Congressional members now seem inclined to reign in the lunacy. As a fairly entertaining example, here’s the video of that U.S. Senator that I mentioned earlier, Claire McCaskill, giving a roasting to some bankers. Quote: “…you all are the house. You’re the bookie.”
Michael Lewis on how insanity came to Wall Street
The new book on the financial crisis by Michael Lewis is being widely praised as one of the most readable, and also as actually breaking news — see here and here. “The Big Short” came out last month and you can read the first pages here. Another excerpt is here.
In late March, Vanity Fair editor Graydon Carter sat down with Lewis for an hour-long interview on the topic of his book.
You can find the entire interview in a series of eight short videos here. It’s all fascinating but the final two videos (below) are especially so. In one Carter asks Lewis what he himself would recommend in order to reform the financial sector. In the second, Carter asks Lewis his opinion of President Obama and Treasury Secretary Tim Geithner and what they are doing about financial reform.
Today’s opinion pick: “Mistresses of the Universe”
Scientific research increasingly is revealing something that explains why the testosterone-heavy ambition “masters of the universe” is a most flawed concept, according to Nicholas Kristof, writing in his New York Time‘s column today.
Excerpt: (Feb 7, 2009)
Wall Street is one of the most male-dominated bastions in the business world; senior staff meetings resemble a urologist’s waiting room. Aside from issues of fairness, there’s evidence that the result is second-rate decision-making.
“There seems to be a strong consensus that diverse groups perform better at problem solving” than homogeneous groups, Lu Hong and Scott E. Page wrote in The Journal of Economic Theory, summarizing the research in the field.
Read all here.
Watch the U.S. House of Rep. vote on bailout today
If you want to see the debate and the vote today in the U.S. House of Representatives as it returns a second time to Treasury Secretary Paulson‘s $700 billion plus bailout plan for Wall Street, click on to C-SPAN, the only news media organization that regularly televises the legislative proceedings of the U.S. House and U.S. Senate.
The deliberations begin at 9 am Eastern Standard Time (USA).
Ode to (Deregulated) Wall Street
Blame It On Your Lyin’ Cheatin’ Heart (Patty Loveless)
Naomi Klein isn’t wearing rose-colored glasses
And she’s advising the American people also to avoid seeing things through a naively pink glow, especially now. The widely-praised writer of The Shock Doctrine — a book that reveals how the rich and powerful exploit natural and manmade disasters for profit — is warning that the ongoing Wall Street meltdown is a demonstration of more of this ruthless greed in action.
From her blog yesterday: (“Now is the Time to Resist Wall Street’s Shock Doctrine” Sept 22, 2008):
I wrote “The Shock Doctrine” in the hopes that it would make us all better prepared for the next big shock. Well, that shock has certainly arrived, along with gloves-off attempts to use it to push through radical pro-corporate policies (which of course will further enrich the very players who created the market crisis in the first place…
Summing up the current highway robbery scenario now being staged in the U.S. Congress, Klein warns that there are no saviors who are going to look out for us in this crisis. Certainly not Henry Paulson, former CEO of Goldman Sachs, one of the companies that will benefit most from his proposed bailout (which is actually a stick up). Loud, organized grassroots pressure on both political parties is our only hope, she says.
Here is a video of Klein last week on the popular political affairs talk show Real Time with Bill Maher, debating the current crisis.
