If you read Michael Lewis' latest Bloomberg column, Bashing Goldman Sachs Is Simply a Game for Fools, quickly, you might think it's a brutal take down of the newest Wall St muckraker (Taibbi) by the grand marshal of Wall St muckraking (Lewis). Fortunately or unfortunately, depending on how you look at it, this column seems to be satire. I can't decide which I'd prefer to see, a Lewis/Taibbi Tag Team, or a knockdown drag out between the them. In any case, a good read.
America stands at a crossroads, and Goldman Sachs now owns both of them. In choosing which road to take, ordinary Americans must not be distracted by unproductive resentment toward the toll-takers. To that end we at Goldman Sachs would like to dispel several false and insidious rumors.
Art Howe didn't come out of 'Moneyball' looking that awesome, so he was hoping for redemption from the recently axed 'Moneyball' movie. In this article, he claimed Michael Lewis never talked to him. Only thing is, Lewis did. "Accusations of journalistic bias are the last refuge of the scoundrel", says Lewis, replacing patriotism with accusations of journalistic bias in Samuel Johnson's famous quotation.
Vanity Fair has a habit of posting stub abstracts of their bigger articles. This isn't exclusive to VF, Rolling Stone does it, too, but it is an annoying way of using the web. Barry Ritholtz takes them to task for this, and then publishes the PDF that they sent him to drum up publicity. If you can't wait until next week to read Michael Lewis' take down of Joe C and AIG that explores among other things:
How A.I.G. F.P. became the first stop for Wall Street banks looking to insure the massive amounts of debt they were buying, packaging, and selling: “We were doing every single [credit-default swap] deal with every single Wall Street firm, except Citigroup,” says one A.I.G. F.P. trader. “Citigroup decided it liked the risk and kept it on their books. We took all the rest,”
click above for the full article.
In other Michael Lewis news, you probably knew that the Siderbergh/Pitt vehicle, 'Moneyball', got axed last week. Here's an insider's version of events that doesn't make anyone at Sony look very good. Sandra Bullock's 'The Blindside' continues to truck, and still, for some reason, no one has made any moves to make 'Liar's Poker'.
What's coming for the big banks?
"I think they steadily become much more boring. I think they steadily attract a lesser caliber people to work for them and they pay less."
"The people who created the problem are so powerful in deciding in what the solution to the problem will be."
I'll say it again. No one wants to make Liar's Poker into a movie? How can this be?
Most fascinating to me was a paragraph describing behavior of the financial markets from 1982-1992. Close your eyes and think he's talking about 1999-2008 and it's spooky how well it fits. Eventually we'll figure out that you can't just make money out of nothing. Until then, I guess we'll just cycle through.
Still, in the short run he is probably right. You can frighten people into behaving themselves for a while. But in the long run he's wrong. The financial revolution of the last decade introduced to Wall Street all sorts of temptations to abuse one's position. When socially unproductive behavior pays as well as it has, it isn't merely a matter of needing a few more good men. The dirty little secret on Wall Street is that the men responsible for its current reputation were not exceptionally bad. They were just ordinary people placed in unusual circumstances.
Also of note, and the thrust of the entire piece, is Lewis dismantling Buffett's (at that time) pristine moral and ethical reputation with examples of deals Buffett cut seemingly at odds with his public statements. I had no idea Lewis wasn't a fan of Buffett:
This modesty is inconsistent with Buffett's vanity about his reputation as an investment genius. The main threat to this reputation--other than his performance, which has lagged the market during the past two years--is the strong academic evidence that success in the stock market is no different from success in a coin-flipping contest. The suggestion that he is merely lucky drives Buffett to distraction. He regularly ridicules skeptical professors with a vaguely thuggish if-you're-so-smart-why-am-I-rich routine. (The reason he is rich is simply that random games produce big winners, but pity the business school professor on fifty grand a year who tries to argue with a billionaire.) While his little rhetorical victories may offer him short-term consolation, they also reveal the enormous pressure on Buffett to vindicate his precarious perception of himself.
Steven Soderbergh needed a gimmick for the Bill James character in Moneyball, so he has decided to animate him. Uh, that's a gimmick. Though, if anyone could be a cartoonish superhero to the Moneyball crowd, it's Bill James.
We have this sort of oracle character that appears throughout and declaims various issues and he’s essentially supposed to be Bill James. He’s your host in a way…. The background will be real but the person who is supposed to be him will be animated.
Note: At some point I may or may not get away from breathlessly reporting on all of the updates related to Michael Lewis Movies (See The Blindside and Moneyball, as well as the no brainer Liar's Poker, which would be so timely it makes my mouth taste acidy with adrenaline). This breathless reporting is also present for the Arrested Development movie. Again, it is unclear whether this will continue or not.
Michael Lewis comments here and here in the Baltimore Sun on the draft of Michael Oher by the Balitmore Ravens in the first round. Lewis' book, The Blind Side, tells the tale of Oher who was earmarked at 16 to be a first round pick at offensive tackle. "It's so seldom that things work out the way they're supposed to work."
"Demetri Martin will play will play Paul DePodesta, a computer-wielding Harvard-educated hotshot who became Beane's right-hand. DePodesta went on to a much-maligned tenure as general manager of the Los Angeles Dodgers and has most recently been working in the Padres organization."
I don't know what I expected, but between The Moneyball movie and The Blind Side movie, and what's sure to be a Liar's Poker movie, there's going to be a lot of weird casting going one.
Michael Lewis makes a lot of sense in his latest column for Bloomberg.com, but he's also on the wrong side of the blame game. Blaming the,
Millions of people [who] borrowed money they shouldn’t have borrowed and, not, typically, because they were duped or defrauded but because they were covetous and greedy: they wanted to own stuff they hadn’t earned the right to buy
is simplifying the issue and lets the lending banks off the hook. It's been said before, but it's important to remember (and will become painfully clear over the next couple years) that in the bank/borrower relationship, the lending party has the upper-hand. Finally, as the one guaranteed financial professional in the relationship, the lending bank, frankly, should have known better.
But then this fascinating nugget:
Goldman Sachs, which received about 8 percent of the pile, or $13 billion, has claimed publicly that the money was, to them, a matter of indifference, as Goldman had hedged itself against a possible collapse of AIG -- by making bets against AIG.
If I understand this correctly, Goldman was making bets against the insurance company it was paying to insure its bets. If that's correct, is it any wonder we're in the mess we're in?
In the Esquire article about Roger Ebert a few weeks back, Ebert mentioned his interview interview with Lee Marvin as one of his favorites, and now they've republished it online.
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