Dummheit my system
The history of the financial crisis Friday, May 21, 2010
Converse Shoe Laces Too Long
By Harald Staun
Who wants illusion and glare is not wrong in the "Venetian" hotel in Las Vegas - arrived here in January 2007, the subprime industry 09th May 2010
man of power everything getting worse. Once before, twenty years ago, Michael Lewis had tried to settle with Wall Street. He had to get very lucky and not know much about the mid-1980s, a job at the investment bank Salomon Brothers, where he earned a lot of money by speculating with other people even more money. After three years he got out. He feared, could fly up the fraud at some point, but above all he was afraid that could fly up the vertigo never: be smaller - and the big, the could not believe it.
In his book "Liar's Poker" Lewis has described 1989, the stunning conditions on Wall Street, the arrogance of the managers and their ignorance, incompetence and irresponsibility, with a few straight men outgrown puberty with the economic fate of the country were playing roulette. He wanted to show "how a great nation had lost its financial sense." The book became a bestseller, not only shocked because Lewis' insider report to the public. The inquisitive reader letters came from young students, who asked if Lewis could even tell them a few more secrets. They had read the book as a manual. If Lewis intends some kind of enlightenment, had its dialectic was devastating.
that Lewis now again a book about the Wall Street presents, about the mysterious transactions in the U.S. mortgage market, the consequences have become so well known, so to speak, is also a threat: Would be possible to find the latest tricks of the derivatives dealer not only concerned readers, but also fascinated by imitators.
In "The Big Short" told Lewis the story of the subprime crisis by dealing with the most interesting characters, with those speculators who have expressed their criticism of the real estate bubble especially lucrative: by taking the bet on the collapse.
The idea that schools make their methods is not entirely absurd. Since it does not help that the property market not too much is kaputtzuspekulieren: in particular the use of credit default swaps, those derivatives, has described the goods Buffet as "financial weapons of mass destruction," currently enjoys great popularity. Except that there are no private houses more precisely, its fate will be placed on it, but state budgets.
is Seen it about time that stopped Michael Lewis, to write books.
It is unfortunately not easy to distinguish the winners from the losers, the good from the evil banker, or the rational of the insane. In Lewis' book in any event any moral certainty falls apart after a few Pages that reason alone, it is so good. This is due to the unusual in his protagonists, who meet the stereotype of the greedy speculators not so, second, it is but if you will, at their opponents, with all those players in the financial market so that not necessarily her big heart driven to have to invent the junk bonds, whose demise at the end of the short-selling profited. That's just the problem at the populism that relies onto resentment against the speculation: The motives of the losers are usually but not necessarily altruistic. The greed of the bankers in this game more of a constant and has therefore not particularly meaningful.
winner or loser? would
It is not only the sympathy of the author to thank for his main characters, that they certify as a reader, no special depravity, it is mainly due to the crazy internal logic of the financial system, which one with moral categories do not move to get rid of can. Paradoxically, namely, were precisely those complex investment structures, the derivatives, then, translated by what Lewis' incorrigible pessimists against the boom, pretty much what in the world of synthetic imagination capitalism can most likely pass as common sense. Was just crazy, it should be noted also brave. At that time, namely when Steve Eisman and Mike Burry, Charlie Ledley and Jamie May began, to distrust the hype surrounding the trade in subprime loans, was looking at no one in the investment industry for their gloomy forecasts. Not even the market itself: although it had long been possible to bet with so-called short sales for shares, but not against those questionable securities to which U.S. mortgage lender such as Fannie Mae and Freddie Mac had cobbled together their subprime loans.
As Burry, a relatively insignificant hedge-fund manager from California, 2005, the big banks used up, looking for sellers of credit default swaps (CDS) on subprime securities, credit default swaps on those "securities", then, of which he was sure they would prove in their latest two years of uncertainty, wanted only two banks to talk to him, "Goldman Sachs and the German Bank. The others were not afraid about the risk, they simply had no idea what Burry wanted at all. Against everything you could bet on Wall Street, not just against the fact that indigent clients, which had been foisted a million-dollar loan, can ever pay back the money: as much realism was not simply provided.
But this is only the beginning: It comes in "The Big Short" from the head shaking did not get out, and at the end is sheer stupidity and mindless structural automatisms no space more to subject anyone to personally human weaknesses such as greed and avarice. And of course it hurts this effect is not that it is Lewis' strange betting kings to be very special personalities.
The ghastly banality of their genius is most striking
sure Michael Burry, a former neurologist with a glass eye and Asperger's syndrome and a disease resulting from his talent to see patterns that others do not see. But the analyst Steve Eisman, whose radical habit other undiplomatic to say his opinion in the face, not necessarily one of the features for setting an investment banker, is well as a dissident. When Charlie Ledley and Jamie May, however, the two little slackerhaften partners of the "Garage Band hedge fund" Cornwall Capital, seemed a fundamental defeatism has to be the only prerequisite for a successful career as a speculator, they had problems to get past even the receptionists to the bank manager, with they wanted to do business.
The interesting thing about all the stubborn outsiders who introduces us to Lewis, is the perspective shift, which occurs when one sees the world through their eyes, they are the child who has always seen the Emperor without clothes. When Lewis tells it now, as they insisted in vain for the nudity that is not simply a parable about the power of the dominant opinion. It is crazy that immunity to self-boosting system against any kind of reason, which illustrates this book so impressive.
shows the views of the dissidents in fact, especially the haunting banality of their genius: there was, for example, is the creditworthiness of the borrower a little closer look, it was the realization that a Mexican strawberry picker with an annual income of $ 15,000 such difficulty could perhaps a little pay back 750,000 dollars he had borrowed for the purchase of a villa, and it was, in a world of illusions based on the most basic to trust law of physics: Things fall from the top down.
blind or criminal?
In principle, Lewis has written a detective novel: That makes his book so exciting. Amazing just how long the deception works is that the veiled look at the relationships that are so obvious in the end. The criminal energy, that are needed in order to concentrate toxic loans into securities to cut into tranches and then sell the AAA seal of approval would be still somewhat comprehensible. But apparently not even interested in the banks that they were acting, let alone investors, they bought, for which they actually had to do.
some point, as it had long been customary to bet with credit default swaps against the mortgage market, and fell slowly and the rates of the poison papers began even Eisman and his partners in their mind to doubt. For still they found investors were getting to be on their game. But if they wanted to know what those were for people holding the other side of the bet, they got from the dealer at the Deutsche Bank the answer: "Dusseldorf. Stupid German. The rating agencies take seriously. Those who believe in the rules. "
Those who knew the risks, the hidden portions of their toxic securities from themselves as alcoholics on withdrawal. The creativity they demonstrated here is almost admirable: with unintelligible acronyms were ailing credit rewritten to insider, from "subprime" became "midprime": "a triumph of language over the truth," Lewis calls it. The market did not believe his own lies - or at least the fact that they are no longer, if only enough people believe in them. But most had simply no idea. Burry, who took the trouble, the brochures for the scrap papers to read, is sure that he thus was alone rather: "Only someone with Asperger's syndrome has the idea to read brochures from subprime mortgage bonds."
met in January 2007, the subprime industry in Las Vegas. No place could have been better fitted to this conference as the synthetic hotel, The Venetian, "a gigantic simulation whose primary purpose is to deny reality. Also Eisman and his partner were there, especially convince to get personally from the collective delusion of the industry. Still her suspicions were not entirely eliminated, there would be a catch to their business, they had overlooked. But when she witnessed how the careless managers continue to mutually assured her optimism, she had only one question: Are these people just blind? Or are they criminal?
As the financial market fell to pieces because the observers lack the words, a madness that was the only thing that occurred to them to do so. The crash, however, he was just a brief moment of reason insanity was all that happened before.
Michael Lewis: "The Big Short. Inside the Doomsday Machine. " WW Norton & Company, 266 pages, kr approx. 150, - inkl moms
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