Michael Lewis: The End of Wall Street
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June 16th, 2009 by AdvisorAnalyst
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Michael Lewis, the trenchant author of Liar’s Poker, Money Ball, and Home Game, discusses what he calls “The End of Wall Street,” in this 5:33 minute segment. It’s an enlightening discussion, I promise. Don’t miss it. Click play to see it.
Lewis explains how he went out of his way to talk to the people who seemed to have known the crisis was coming, and discovered that they were the less sophisticated, net-long breed of hedge fund investors, and not the genius financial engineer cum alchemist types.
In essence, these were, as in one case, portfolio managers who poked holes in the ratings system. In his example, Lewis tells of the story of the investor who asked Standard and Poor’s to explain how a whole whack of BBB mortgage paper could fetch a AAA rating? This was followed by the question, “What would happen if housing prices start falling?” to which the S&P official responded, “there is no place in the model to insert negative numbers.”
Lewis does a great job of explaining what the critical factors were that contributed to “the end of Wall Street.”
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Tags: Amp, Bond Markets, Collapse, Common Stocks, High Yield Bond, High Yield Bonds, Hyg, Lehman Brothers, Pff, Preferred Stock, Question Of Time, Stock Markets, Time SourcePosted in Markets |
February 5th, 2010 at 2:12 pm
Considering the low to negative correlation gold has over the long term compared to the other asset classes of stocks, bonds and cash - I believe gold is an important investment consideration.
February 5th, 2010 at 7:04 pm
Thanks Derek,
We have dealt with the subject of gold extensively over the last year, and it appears that it will become a very important consideration in portfolio construction this and next year.