The Big Short: Inside the Doomsday Machine by Michael Lewis

The Big Short turned out to be quite a wholesome book – it seems, the more I read Lewis, the more I like him – so I guess I have to read more.

To tell you frankly, for a person not too involved with and not too interested in FI markets, I never really took time to analyze what hit the big WS firms back in 2008 – I guess I am still a bit puzzled how the smart guys outsmarted themselves and kept this rotten pile of crap on their balance sheets – I don’t buy into this loan warehousing idea – and blunt bets for the trading units would be, umm, stupid – I know, boys will be boys etc, but still, why not push the crap away to, as Lewis calls him, the sucker, a mystery to me. S&P, AIG and the rest – easy to understand – but MS, ML and the rest of the folks – uh, why?

As in his golden 80s when Lewis spat venom about Salomon Bros, his recent stuff is all about “ibankers, the wrongdoers of the world” – oh, well. #occupymyasshuh

* * *

When a Wall Street firm helped him to get into a trade that seemed perfect in every way, he asked the salesman, “I appreciate this, but I just want to know one thing: How are you going to fuck me?”

* * *

Senior management’s job is to pay people,” he’d say. “If they fuck a hundred guys out of a hundred grand each, that’s ten million more for them. They have four categories: happy, satisfied, dissatisfied, disgusted. If they hit happy, they’ve screwed up: They never want you happy. On the other hand, they don’t want you so disgusted you quit. The sweet spot is somewhere between dissatisfied and disgusted.”

Boomerang: Travels in the new third world by Michael Lewis

Mike Lewis’s last book isn’t one at all. In fact, it is a collection of five standalone articles published between 2009 and 2011 in the Vanity Fair magazine, disguised as a book and given a new introductory chapter. 

Five stories of people that Lewis wants to show as stupid and/or crooked – Icelandic fisherman i-bankers, corrupt Greek public servicemen, Irish real estate developers and politicians who got far too excited to think clearly, anal rule-abiding German-based bond investors, and greedy Californian firefighters – all in one bowl. 

A funny read at times – though I guess I should know better than take all Lewis claims for granted – fact of life, the guy loves to exaggerate. The best bits are Iceland and the Greeks, but I will probably steal today’s quote from the German section, huh. 

“The Hamburg red-light district had caught Dundes’s eye because the locals made such a big deal of mud wrestling. Naked women fought in a ring of filth while the spectators wore plastic caps, a sort of head condom, to avoid being splattered. “Thus,” wrote Dundes, “the audience can remain clean while enjoying dirt!” Germans longed to be near the shit, but not in it. This, as it turns out, is an excellent description of their role in the current financial crisis.”

PS: BTW that thing, that particular Frankfurt WC, has already been mentioned to me more than once in one quite interesting Russian corporate banking urban legend – did you guess which one? 😉

“The interesting thing, said the German financier, who visited often, is the glass room at the top, from which one looks down over Frankfurt. It is a men’s toilet. Commerzbank executives had taken him there to show him how, in full view of the world below, he could shit on Deutsche Bank.”