Public Enemies

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The gist of author Michael Lewis's "The Big Short: Inside the Doomsday Machine" is that the '08 meltdown -- the destruction of $1.76 trillion in subprime mortgage market holdings -- was basically driven by "mass delusion," says a HuffPost summary.

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"The incentives for people on Wall Street got so screwed up...because their short term interests were so overpowering," Lewis told 60 Minutes (or somebody else). "And so they behaved in ways that were antithetical to their own long term interests."

In other words, they got drunk and crashed the family car and totalled it -- blood and screams and shards of glass all over the pavement. These guys committed acts that were far more menacing and destructive than the Chicago gangsters and desperado hold-up men of the 1920s and '30s. Much worse than anything Pablo Escobar ever did. And most of America is just...oh, well, whatever. I'll wager that the followers of Sarah Palin and Michele Bachman are mainly thinking, "If we play our cards right, maybe we can be the ones to fleece the country and make out like bandits...next time!"

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Posted by Jeffrey Wells on March 15, 2010 at 9:00 AM

comment #1

drbob says ...

I'm sure you know, Michael Lewis is also the man responsible for "The Blind Side." I like his financial reporting better than his sports books (also wrote Moneyball), but he's a fun read either way.

Posted by drbob at March 15, 2010 9:25 AM

comment #2

crazynine says ...

I'll wager that the followers of Sarah Palin and Michele Bachman are mainly thinking, "If we play our cards right, maybe we can be the ones to fleece the country and make out like bandits...next time!"

If there was a way I could take that wager, I'd do it in a heartbeat, and win more money than God.

Because that's what the Tea Party folks are complaining about: not the government spending too much money, not the government distorting market incentives, not the government limiting economic freedoms... no, they're complaining that they don't get to get rich on graft like Chris Dodd did.

Los Angeles is on Earth, right? I mean, I remember living there, it looked like Earth back in the day...

Posted by crazynine at March 15, 2010 9:29 AM

comment #3

Michael says ...

The book is a more researched version of his excellent Portfolio article from Nov '08 here.

It's hilarious on top of everything else. Excellent read.

Posted by Michael at March 15, 2010 9:40 AM

comment #4

Lehigh says ...

The bigger issue is that there is almost no concept of long-term value anymore. The markets have matured to the point that derivatives can be based on any asset at any point in time. Whenever 'value' is seen, there are mechanisms put in place to extract that value. Think of an oil well -- instead of letting it pump for years, it's as if all the oil is sucked out immediately and put on the market.

Posted by Lehigh at March 15, 2010 9:54 AM

comment #5

Wrecktem says ...

The only person who knows what it's like inside the Doomsday Machine is Commodore Decker, and he's dead.

Posted by Wrecktem at March 15, 2010 10:17 AM

comment #6

DeeZee says ...

"And so they behaved in ways that were antithetical to their own long term interests."

Sort of like the Dems for the last year on health care.

Posted by DeeZee at March 15, 2010 1:16 PM

comment #7

dave says ...

Wrecktem, FTW!!! Funny, man!

Posted by dave at March 15, 2010 5:58 PM

comment #8

Karndean says ...

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Posted by Karndean at March 15, 2010 9:55 PM

comment #9

Krillian says ...

He had a good Daily Show interview too.

Posted by Krillian at March 16, 2010 4:33 PM

comment #10

sammiha says ...

Whenever 'value' is seen, there are mechanisms put in place to extract that value.
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Posted by sammiha at April 7, 2010 9:39 AM

comment #11

sammiha says ...

I like his financial reporting better than his sports books (also wrote Moneyball), but he's a fun read either way.
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Posted by sammiha at April 8, 2010 8:33 AM

comment #12

sammiha says ...

The markets have matured to the point that derivatives can be based on any asset at any point in time.
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