... “So what happened?”
“I told you what happened. Smart guys started going to Wall Street.”
“Why?”
“I thought you’d never ask,” he said, making a practiced gesture with his eyebrows that caused the bartender to get started mixing another martini.
“Two things happened. One is that the amount of money that could be made on Wall Street with hedge fund and private equity operations became just mind-blowing. At the same time, college was getting so expensive that people from reasonably prosperous families were graduating with huge debts. So even the smart guys went to Wall Street, maybe telling themselves that in a few years they’d have so much money they could then become professors or legal-services lawyers or whatever they’d wanted to be in the first place. That’s when you started reading stories about the percentage of the graduating class of Harvard College who planned to go into the financial industry or go to business school so they could then go into the financial industry. That’s when you started reading about these geniuses from M.I.T. and Caltech who instead of going to graduate school in physics went to Wall Street to calculate arbitrage odds.”
“But you still haven’t told me how that brought on the financial crisis.”
“Did you ever hear the word ‘derivatives’?” he said. “Do you think our guys could have invented, say, credit default swaps? Give me a break! They couldn’t have done the math.”
“Why do I get the feeling that there’s one more step in this scenario?” I said.
“Because there is,” he said. “When the smart guys started this business of securitizing things that didn’t even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that. All of that easy money had eaten away at their sense of enoughness.”
“So having smart guys there almost caused Wall Street to collapse.”
“You got it,” he said. “It took you awhile, but you got it.”
The theory sounded too simple to be true, but right offhand I couldn’t find any flaws in it. I found myself contemplating the sort of havoc a horde of smart guys could wreak in other industries. I saw those industries falling one by one, done in by superior intelligence.
THIS IS CLEVER LEFTIST BULLSHIT.
- FANNIE MAE CREATED THE DERIVATIVES WHICH INVESTMENT BANKS BOUGHT IN GOOD FAITH, AND THESE WORTHLESS FANNIE MAE DERIVATIVES POISONED THE MARKETPLACE.
- FANNIE MAE - AS A QUASI GOVERNMENT AGENCY - HAD THE IMPLICIT BACKING OF THE FEDERAL GOVERNMENT AND LENDING INSTITUTIONS WERE UNDER HUGE FEDERAL PRESSURE - AND PRESSURE FROM GROUPS LIKE ACORN - TO MAKE LOANS TO UNDESERVING/HIGH RISK BORROWERS OR LOSE THEIR CHARTERS.
THIS FEDERAL INTERFERENCE CAUSED THE BUBBLE.
GEORGE BUSH, ALAN GREENSPAN, JOHN SNOW, AND JOHN MCCAIN ALL WARNED ABUT THE FANNIE MAE BUBBLE BUT DEMOCRATS IN CONGRESS BLOCKED THEIR EFFORTS TO REGULATE FANNIE MAE.
THESE DEMOCRATS CAUSED THE BUBBLE, AND NOT WALL-STREETERS WHO WERE TO SMART FOR THEIR OWN GOOD.
CALVIN TRILLIN AND HIS LIBERAL NYC BUDDIES CAN DECRY AND BLAME WALL STREET GREED ALL DAY LONG, BUT THAT WILL NEVER MAKE IT TRUE.
TODAY, THE DJIA WENT ABOVE 10,000 FOR THE FIRST TIME IN A YEAR.
EVERYONE IS HAPPY.
NOT JUST THE GREEDY WALL STREET BASTIDS.
EVERYONE WITH A PENSION FUND OR A 401K OR AN IRA IN THE MARKET WAS HAPPY.
AS WALL STREET GOES, SO GOES AMERICA.
WE'RE ALL IN ONE BOAT.
AND THE LEFT-WING ANTI-WALL STREET BILGE HAS NO PLACE IN IT.
ADDITIONALLY: '
FANNIE MAE WAS RUN BY DEMOCRATS: FRANK RAINES, JIM JOHNSON, JAMIE GORELICK - ALL OF WHOM PROFITED HUGELY, TO THE TUNE OF MULTI-MULTI MILLIONS - FOR HELPING TO CREATE THE BUBBLE.
A BETTER EFFORT FROM TRILLIN HERE - HAT TIP HOT AIR.
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