How Big?

You hear a lot these days that banks need to be big to serve their clients. Charles Calomiris said this morning that we can’t run the global economy with “mom-and-pop banks.” Sure, I’m willing to concede that. But how that’s a silly debating tactic. More seriously, how big do they need to be?

Yves Smith, no friend of the mega-banks, says, “The elephant in the room is derivatives. The big players have massive OTC derivatives exposures. You need a really big balance sheet to provide OTC derivatives cost effectively.”

How big?

Here’s a starting point. In 1998, Goldman Sachs had $217 billion of assets. (Lehman had $154 billion.) In today’s dollars (using the GDP price index), that would be about $270 billion. I think that they were probably doing a perfectly good job of serving their clients at the time. Adjusting for inflation, I don’t think their clients are substantially bigger or more global now than they were then. So the question is (multiple choice):

(a) Has the financial world changed so much that Goldman now needs more than $270 billion to serve clients effectively (and if so, is that change we want)?

(b) Is $270 billion enough?

I don’t claim to know the answer to this one, but if it’s (a), I’d like to see some evidence.

By James Kwak

52 responses to “How Big?

  1. The obvious question is “why do we need derivatives?”

    The housing market worked much better for decades after World War II without derivatives. Derivatives are a key part of the current fiasco.

    There is every reason to return to the time tested, proven system where local and regional banks lend directly to local customers that they know and are required to keep the loans on their books, must get downpayments of 20 to 25%, verify adequate income of borrowers, etc. etc.

    It is good for most people to have a bank large enough that they can find a branch when needed. This is an argument for banks at the city to state scale and no larger. Even this argument is probably weakening with the Internet and improvements in telecommunications reducing the need for physical branches.

    Sincerely,

    John

  2. Yes, I second John. Why do we need any OTC derivatives? (Or any derivatives at all for that matter? This is all “exciting” banking, which we don’t need AT ALL.)

    That’s the question I kept asking when I read that Yves piece and her follow-up, as well as all the comments. I had to conclude that there really was no answer; people are just indoctrinated into the notion that we need these things which we somehow got along just fine without for tens of thousands of years.

  3. > Has the financial world changed so much that Goldman now needs more than $270 billion to serve clients effectively

    Optimization is short sighted (Nassim Taleb): who gives a damn that they can serve their client’s effectively, it’s the benefit to society that one should keep his/her focus on.

    So now, for society at large: How can one make the point that big balance sheets are preferable, where blowups took place within financial institutions precisely with big books, presently and in the past (LTCM)?

    It’s pretty much established that risk estimates (Var etc) are seriously estimated. Big balance sheets allow for a big buildup of latent risk that only materializes in catastrophic fashion.

    If that risk were spread among smaller banks, not necessarily evenly, a default of one of them would be much more likely over a shorter period of time, than that of them combined into a large entity. This would send a potent warning signals to other banks and regulators which could be acted upon. A coin tossing experiment suffices to prove this claim.

  4. Without arguing, because a variety of people have spent a lot of energy on this already, but James has asked before “who is saying we should outlaw derivatives?”

    Your friendly neighborhood blog commenters, that’s who!

  5. All this ignores another key issue. The larger a bank becomes the less influence the owners (shareholders) have over important policy decisions, such as the amount of risk the bank will accept. We should be moving to mels where ownership has more say, not less, over the governance of banks and other coporations.

  6. Derivatives help companies control future costs. If all the airlines for example had bought futures as effectively as Southwest did to hedge against the increase in the price of oil a couple of years ago, maybe we wouldn’t be paying $25/bag to check our luggage.

  7. You’d have to translate that example to OTC derivatives. Oil futures aren’t one of them. Until then, off topic.

  8. Anyone who understands OTC derivatives and is not cashing in on them (or bought and paid for by those who are) wants them centrally registered and accurately accounted for. The benefits of OTC derivatives are entirely illusory. Trading is a zero sum game. OTC derivatives make accounting and taxation and regulation a complete fantasy and a swindle. It is now impossible to evaluate any bank or corporation balance sheet or income statement. The financial markets now operate on pure guesswork at every level. If you do not understand this read some of Fank Partnoy’s work, especially Endless Greed. If your apology for derivatives is cheap mortgage loans and car loans and education loans, take a look around at the results. If you like the idea of America looking like Mexico or perhaps Indonesia in five years just leave OTC derivatives alone, sit back and watch. A 1% tax on OTC derivatives bets by United States Participants could retire the entire National Debt. See paskudnyaks.blogspot.com for details.

    Any more questions?

  9. I didn’t get past your first paragraph the first read through. Sorry. We also got along fine for 10k+ years without antibiotics, money, agriculture, etc.

    Step 1: mention word from the current “toxic lexicon”
    Step 2: ???
    Step 3: profit!

  10. I’m all for central registration generally, but to get people to agree on standard derivatives contracts is difficult. It bugs me that so many people cry out for all these lofty ideas like putting all derivatives on exchanges, but don’t actually provide any reasonable way to do so.

    Also, as has been pointed out a number of times before, a 1% tax on the notional of derivatives is often way more than the amount of money that changes hands. It’s hard to reasonably tax derivatives precisely because it’s not obvious what should be taxed and strongly depends on each specific derivative.

  11. If you’re worrying about OTC derivatives, don’t follow the Canadian example. Just noting, off the record.

  12. I’m trying to think of what crucial services big, multi-service banks can provide that small banks can’t. The two that come to mind are securitization and IPO underwriting. The welfare argument for both activities seems straight-forward: without securitization on a national scale, borrowers in regional economies would have lower access to capital. Without IPO underwriting, smaller firms wouldn’t be able to access the capital markets. Both activities require large balance sheets to back up the risks undertaken. To take the argument to its conclusion, if the choice is between breaking up big banks versus regulating them, choose regulation, since big banks result in greater capital provision; the regulations would be along the line of higher and pro-cyclical capital adequacy requirements to mitigate excessive risk-taking.
    The question seems to be whether big-bank activities such as securitization are actually welfare-enhancing, however. If they are, then the government should allow them to take place, i.e. they should allow firms performing them to operate free of onerous regulations, and with the freedom to fail: take away the big banks and you lose the welfare benefits, but keeping them without allowing them to fail lessens their incentive to properly monitor their risks.

  13. Where oh where has T Roosevelt gone?
    Oh where oh where can he be?
    We need a leader with big brass ones
    to break these trusts into peas!

  14. Definitely Russ, and it appeared both John and Sam K. didn’t understand the need for any kind of derivatives at the time I posted.

  15. I found this on Andrew Sullivan’s website connected to a link. I thought it was cute. It’s originally from Jessica Hagy’s website. Maybe people like Charles Calomiris think if they throw enough numbers and bank history from Mexico, Argentina, Norway, et cetera he can get this result?? The first link is what I wanted to share, and the second link is for proper credit to Miss Jessica Hagy.
    http://thisisindexed.com/wp-content/uploads/2009/10/card2282.jpg

    http://thisisindexed.com/

  16. Everything has to immediately be about “profit”?

    That’s your nightmare, not mine.

    And I’d expect a finance cadre to compare financial “instruments” to growing food.

    But I think we can get along just fine without such cadres as well.

  17. Here’s my reasonable way.

    Get rid of all securitization. Completely. No real workers need it.

  18. The first two responses narrow in on the problem. The first asks why we need derivatives. The second asks why OTC derivatives. Smith’s point is that OTC derivatives require large bank size. Assuming that derivatives confer advantages on society, what advantages are conferred by OTC derivatives that are not conferred by those traded on an exchange? If the answer is either “none” or “none that matter much”, then we have arrived at the “QED” and go have a beer point of the discussion. If the answer is a Greenspanian “not inconsiderable”, then we need to keep thinking and measuring.

  19. Other advantages conferred by size are political influence and a whole bunch of ego points to people who clearly need ego points. These two points combine to form a powerful, icky brew. We need to stop talking around issues of political influence and testicular jollies when we talk about powerful, powerful people.

  20. You don’t need standardization. You need to force parties to disclose the terms and account for them honestly. You need to tax them in order to discourage them. You are worried about what? Unfairness to the financial sector? Do you really think a small handful of people could have made hundreds of millions of dollars if OTC derivatives involved an honest dispersion of risk? The apologists always talk about plain vanilla swaps which have not been done since 1982. Balzac understood that behind every great fortune lies a crime. OTC derivatives represent the greatest financial swindle in human history. Nothing else is even remotely close.

  21. I have no problem with derivatives as long as they are standardized, traded on an exchange, and market participants are forced to keep appropriate margin or capital reserves.

    The one exception I can think of are naked CDS. Those should be illegal, for obvious reasons.

  22. From a purely practical stand point. 20 years ago all the world’s biggest banks were Japanese. WHAT GOOD DID THAT DO THEM?

  23. James Said: “Charles Calomiris said this morning that we can’t run the global economy with “mom-and-pop banks.” Sure, I’m willing to concede that.”

    James, what is wrong with “mom-and-pop” banks? The banks that I dealt with in my lifetime were little more than “mom-and-pop” banks. They worked fine. There were larger banks in the capital cities if one needed international service.

  24. Jim Larson,
    You’re not SUPPOSED to ask those questions when people like Charles Calomiris are speaking or writing. You’re just supposed to nod your head and think “Oh wow!! So it’s like…uuuhh…..totally cool when the banks take us on a rocket ride into the toilet as long as they do it with “economies of scale”. Awesome duuuude!!”

  25. James asks: “Has the financial world changed so much that Goldman now needs more than $270 billion to serve clients effectively (and if so, is that change we want)?”

    James, the financial world has changed so much that your question is formulated upside down.
    In today’s world the financial services companies do NOT serve their clients, but their clients and everybody else serve those companies!!

    Before the deregulation Wall Street served Main Street, i.e. the financial services companies supported the real economy (payment system, lending, honest advice).
    However, gradually the country has been financialized: in 2007 40% of the S&P-profit was for financial companies, and people had reduced their self-esteem to merely a three digit ‘score’.

    Within a year after the melt-down Wall Street and K Street are back on track to get record ‘profits’ and buy Congress again. Did I read it correctly that Government Sachs expects $ 23 billion in the bonus pool this year? Did they, like people in the real economy, earn it? Or did they extract that from unwilling tax-payers and their ‘clients’?

    As an aside, CNBC quoted Alan Blinder (note: a friend ! of Wall Street): he has not done the proper calculation yet, but expects the total costs of the crisis to be higher than the profits due to efficiencies during all the years of deregulation.
    2:06 – 2:37 in the video clip embedded at
    http://www.ritholtz.com/blog/2009/10/the-feds-new-1-priority/

    So much for the overall benefits of these efficiencies (like innovations, just one of their crappy talking points).

  26. I am so old i remember when IPO’s and securitization were the purview of investment banks, including the investment banking divisions of major brokerage firms. Isn’t that the argument for restoring the Glass-Steagall? We had no IPO problems before 1999. And didn’t the Fed wave its magic wand and recreate Goldman as a bank holding company so it could access the Fed window in the same way that commercial banks have always done? Goldman was doing fine for generations until it made bad bets and attempted to cover them with CDS’s from AIG who failed to act responsibly by putting aside capital in reserve as it does with its life and annuity business.

  27. Loved the graph, Ted. It represents the “true” learning curve. In science, i always found that the more I learned, the more there was to learn. It is amazing to me that winning an election makes one an expert on everything.

  28. I cannot remember exactly, but I believe it was in 1970, that I first learned about put and call options along with straddles, strips, straps etc. Options were initially traded over-the-counter (negotiatied between buyer and seller). It wasn’t long before it was determined (probably by the SEC) that the market was big and uncontrollable that we needed an exchange and clearing house to standardize trades etc. As far as I know, the only negative result of trading options on the CBOE is that because of transparency, commissions are slimmer.

  29. I just got the biggest laugh I’ll probably have for the next week. Check out Sheila Bair at the beginning of this MSNBC video on the Ritholtz site. Is it just me or is she starting to show her age a little (wink wink)??? The rest of the video is accurate and very educational. Worth the 9 minutes. http://www.ritholtz.com/blog/2009/10/american-bankers-association-protest-in-chicago/

  30. Hillbilly Daryl

    The problem and challenge with this question or debate about “how big” lies in the definition of what we are qualifying by bigness-i.e. Banks. And, at present, the term “BANK” is a cath all term that completely defies definition. Save for something like “engages in any or all activities of a broadly financial or insurance nature.” This is not a definition. And, this non-definition does not afford the ability to adequately or accurately qualify.

    Now, not long ago banks couldn’t own insurance companies. Not long ago, banks could own brokerages. Not long ago, banks couldn’t own investment companies. Not long ago, banks were broken into neat, easily understood subcategories that could actually be quantified and regulated. Like the following six aknowledgedly overbraod and simplistic categories:
    1) Consumer banks-handled deposit accounts and provided consumer mortgages, car loans, and others.
    2) Commerical banks-handled commercial paper transactions, and business deposit, disbursement, and loan services
    3) Investment banks-underwrote securities and placed them, M & A and restructuring services, private equity
    4) Consumer brokerage banks-handled typically unsophisticated consumer retirement, savings, investment, 401K, 529, stock and bond brokerage and custodial services
    5) Hedge funds, arbitragers, private banks and well heeled brokerages-handled wealthy and sophisticated individual and corporate accounts and provided high return on high risk investments, advisory services
    6) Insurance companies-provide risk mitigation services

    Now, in the present day, with the repeal of virtually all Chinese Wall limitations that used to exist that required banks to pick a specific specialty, and affirmatively prohibited them from engaging in any other of the six above, we have “banks” that can and do literally provide all six of the above.

    It is impossible under the current arrangement to quantify how big is to big when one is attempting to access the virtues of a consumer bank that also provides commercial banking services and investment banking services and consumer brokerage services that sells insurance and even dabbles in private banking, hedge funds, arbitraging services, and plays with derivatives……

    It used to be simple. I would submit that rules of economies of scale and the economics of efficiency still apply eaqsily to a straight consumer bank, or any of the above six broad categories. And, that adequate regulatory mechanisms can be set up to manage them.

    For example, depository consumer banking institutions that provide mortgages and consumer loans, should as a good rule of thumb (regulatory requirement) keep a reserve of X. You can almost etch X in stone, as it never changes with upturns or downturns.

    Now, if the same consumer bank takes deposits and provides loans, and has reserves of X, and engages in commercial banking, investment banking, insurance, brokerage, hedge funds, arbitraging, and plays with derivatives in its spare time, etc. it is impossible to come up with X. Nor is it possible to come up with or apply any other regulatory standards to these Frankenstein entities.

    In the final analysis, a “BANK”that can freely do any of the above six activities is too big, at any size, as it is un-regulatable.

  31. James asks: “Has the financial world changed so much that Goldman now needs more than $270 billion to serve clients effectively?”

    As an add-on, just a few examples to show that indeed your question is formulated upside down, as I stated above.

    e.g. “Harvard paid $500 million during the fiscal year ended June 30 to get out of $1.1 billion of interest-rate swaps intended to hedge variable-rate debt for capital projects, the report said. The university in Cambridge, Massachusetts, said it also agreed to pay $425 million over 30 to 40 years to offset an additional $764 million in swaps.”
    http://quote.bloomberg.com/apps/news?pid=20601109&sid=aZnoUgi6NwXQ

    and this:

    “– New Jersey taxpayers are sending almost $1 million a month to a partnership run by Goldman Sachs Group Inc. for protection against rising interest costs on bonds that the state redeemed more than a year ago. … While New Jersey replaced the debt with fixed-rate securities in 2008 after the $330 billion auction-rate bond market froze, the swap — in which two parties typically exchange fixed payments for ones based on floating interest rates — isn’t scheduled to expire until 2019.”
    http://wealth.bloomberg.com/apps/news?pid=20601109&sid=al5.EHL9NEBQ

    Can Government Sachs et al. honestly claim that they were delivering their clients a good service?
    Did they properly explain the risks, or did their ‘best and brightest’ just act as marketeers and salesmen? Harvard Endowment fund paying $500 million (!!) to offset swaps gone wrong, municipalities now discovering that they have CDO’s instead of bonds, etc.
    Also, Wall Street, having first caused the Great Recession, bringing a lot of real companies into huge problems, now ‘earns’ huge fees underwriting billions of new corporate debt.

    And today I read GS claims that lack of transparency is an advantage for their ‘clients’ (the dark pool). Yeah…..

  32. In earlier years commodity futures were traded on the Chicago exchange and future income risk was thereby managed. Fuel futures likewise.

    Derivatives did not provide a new service, only a covert dealing opportunity! How is this a benefit to our country?

  33. If large transactions were required banks syndicated the business. GS could just as easily lead a syndicate re a deal and in fact the Lehman rescue was a possible syndicate deal that never happened. Many deals are still done via syndication.

    Could it be that the real reason for TBTF bank deals is the desire ‘to have it all’?

  34. Good post Daryl.

    Should we consider that these ‘banking’ outfits really do control the country? Politicians face the music every term. Politicians scrounge for re-election money money money continually? Bank honchos throw them a few bucks, ‘here boy have a dollar, now wag tail for your master’.

    After all who will still be in charge when Pres. Obama is gone after a max 8 years?

    I’m beginning to think that deregulation maybe has sold out the Republic for nothing?

  35. ‘Endless Greed’ should read ‘Infectious Greed’. Sorry.

  36. Isn’t funny that nothing like this happened while regulations existed and were enforced…

  37. I find it hard to believe that there is something fundamentally untaxable about derivatives. This argument that derivatives are too various to explain clearly never actually explains why. Derivatives at their core are fairly simple, they are payouts based upon the rate of change in a price.

    Let x = the price, t be time, n be the number of units purchased of the derivative. Let the tax = .01*n*dx/dt

    We can either split the tax evenly between the two parties, or allow them to allocate it themselves.(They might decide the tax is paid by the winner or loser)

    The amount of money exchanged will be proportional to n*dx/dt, so our tax will never be greater than the amount exchanged.

    If people can’t put a derivative into the terms of calculus, which is about as universal a language as is possible, then it probably isn’t possible to articulate it at all. This constraint would also ensure a clarity in financial transactions that, at minimum, the college educated could understand.

  38. First, it seems that Goldman Sachs and the other mega buck banks need lots and lots of assets to support their out-of-kilter bonuses, and so they also need the OTC deriviatives and other risk inducing holdings to assure their churning fees to support the accumulation of greater and greater fees and charges.

    They are like heroine addicts (and others) who develop high tolerances for risk to support their (unsustainable) habits. Big is good for them, and can be (and maybe will be) disasterous for those who just want to earn a reasonable living without worry.

    I prefer to think that the reformed Alan Greenspan and Paul Volker know that the bigness is very dangerous to our fiscal health.

  39. The Game;
    Company Store economy,(GS).
    Property; (U.S.)
    Feild Manager; Politician
    Feildhand; Non Government Personel
    Operation; Musical Chairs.
    The slow to appreciate this game will soon loose their seat.
    The rest get a boost.

  40. Futures are a form of derivative that trade on an exchange. OTC derivatives are custom contracts that do not trade on an exchange. My point was to give a real world example of a useful derivative to the people who did not see the need for them.

  41. Good Point Jessica, there really is no good argument for big banks. They provide no public benefit and serve no need. As you noted, securities firms can provide the necessary IPO and securitization services.

    Securitization of loans did help provide necessary funds to the market. However, multiple hedge derivative bets against those securities did not and do not provide the public any benefit. I can see value for one and only one hedge being placed against a mortgage backed security, as insurance. Multiple bets and claims against the same mortgage, particularly one sliced and diced and wrapped in a pool with hundreds of other mortgages is just a fraudulent game.

  42. Very good. And the 1% tax, which actually is a Tobin Tax, would do no harm. Europeans should apply the same. On the other hand Brazil has just put a 2% tax on inflow investments in securities.

  43. @Patrick- Wait, so if the price declines the tax turns negative and becomes a subsidy? Not to mention the fact that using continuous time calculus here to calculate a tax on discrete time contracts is nonsense. But I’m a mathematician so I am nit-picking here. I do agree that regardless of the complexity of the derivative it should be taxable. Assuming none of the parties go bankrupt (big assumption) money will need to change hands in a zero-sum (well, constant negative sum, given the loss to fees in some cases) manner, and thus a party should come out ahead, and should be taxed.

  44. The real one who is too big, is the Fed, that pumped out all the funny money that got us into this problem.

  45. Derivatives are a necessary evil. If you look back, you would probably understand that derivatives did a brilliant job in keeping the cost of money low enough for many to afford homes. Derivatives also ensured that everyone benefits.

    The current fiasco is not because big firms did not know to manage risks properly, its solely because they didn’t understand the concept and the depth of risk such instruments carried. I would like to quote the example of Goldman when it comes to having an intricate knowledge about the concept of risk in whatever they deal with.

    And finally, James, lets just put the argument of too big to fail aside for a while. Yes, we do concede that too big to fail has been the limelight of all the Fed’s action plans. But looks like every second post of yours, focuses on too big to fail. It just gets too boring and monotonous after a while! Yes, we DO get the idea but I’m not too sure if THAT’s the ONLY thing we need to crib about.

  46. Thanks for your post Ashwin. I am keen to learn what folk believe are the real problems. Am I to understand that ‘The current fiasco is not because big firms did not know to manage risks properly, its solely because they didn’t understand the concept and the depth of risk such instruments carried’? I presume you have some substantiating evidence in mind on which this is thought is based?

    Would you mind expanding on:
    1. how this evolved and the reasons a lot of allegedly intelligent folk became and remained oblivious of the concept and depth of risk or prudent management of the risk?
    2. what were the missing elements on both sides of he trading equation?
    3. what precisely were the missing controls (if any)?
    4. what are the fixes required to better manage the derivative risk trading products from this point?
    5. what is the required process to rerail the concept and depth risk train?
    6.What process do you envisage is the best cleanup process?
    7.what should be done to ensure our community is shielded while the reckless, imprudent few ‘crash in a corner’?

    I note your dismissal of TBTF, however with no supporting data, it seems like another summary opinion, which you have a perfect right to express but others may remain unconvinced. If TBTF is not really a problem, presumably you see some TBTF scale benefits which exceed the costs for our community?
    Now exactly to what extent is scaling up an advantage? Who receives the advantage fruit? I note a recent video clip where the GS CEO Mr. Blankfein commented on the success GS was having and his duty only to his stockholders. Good stuff (for GS and the deil take the hindmost?), but if there are no ethical principles or regulations reasonably managing untrameled exploitation, we have a situation which the community may well be damaged?

    If the sky is the limit, please comment on how you see the counterparties prosper? A sustainable business is presumably where both parties receive a benefit.

  47. *How* exactly did derivatives make homes more affordable?

    After all, pelnty of people owned homes in the Dark Ages before securitization took root, and home prices were much more reasonable then relative to median incomes, probably because a lot less (borrowed) money was chasing property.

  48. @notabanker Really appreciate your in depth and insightful response.

    Yes I was perhaps over simplifying things here and there and although I might lack the knowledge and exposure for an in depth analysis, this is what I think:

    I’m quite sure that you’re well aware of the case of AIG when it had stopped its trade in CDS. They were insuring dangerously toxic assets which went against the basic fabric of the system. Only a 5-10 percent of subprime loans were to be insured but by the end, they had an aweful amount of exposure and apparently very few people even inside the org knew of this!

    And when I said ‘big firms did not know to manage risks properly, its solely because they didn’t understand the concept and the depth of risk such instruments carried’ I MEANT they didn’t understand what was going on let alone manage it.

    We also cannot discount the roles of the rating agencies which, again grossly oversimplified the co relationing between scenarios which led to a lot of unworthy securities being passed off as AAA.

    Please also keep in mind that the thin red line separating the wall st and the gov is often faded. Both are dependant on each other for their survival. And although you’re very correct on TBTF, I don’t think anything plausible would be done atleast in the US. ING was broken up by the EU but do you think, Tim would take steps to break up Citi? I think not.

    As I mentioned earlier, every war has its casualities. Does the onus lie solely on the lender? I’m not sure although this might qualify for a chicken and egg paradox. I do remember reading that ‘What’s good for Wall St. isn’t good for the country.’ Maybe, but I don’t think anything can be changed now as they’re back with a bang and they’re back in full force!

  49. They reduce the cost of money in terms of interest payable (in the end). A clap requires two hands- irresponsible lending requires irresponsible borrowers to succeed.

  50. Derivatives were created to hedge risks and protect equity but became a major source of revenue for firms (and bonuses for employees) and in the course of transformation from a balance sheet related hedge transaction to a P&L profit center, began and contiue to present balance sheet risk and systemic risk.

    Register them or ban them.

  51. hi Dan,
    and here is a story about non-mom-and-pop regulation in action which I like because I claim accountants would have looked at accounts and not tried to find hidden conspirational stuff (the good ones I knew exasparatingly for us “normals” lacked interest in imagining things)
    http://www.nytimes.com/2009/10/31/business/31sec.html?_r=1&th&emc=th
    the accountants I knew were to single-minded to go for conspiracy mania – no figures to be had there …
    I’ll probably stay away for at least quite a while, so for now I wanted to wish you all the best and that you’ll manage to hone the description of your knowledge about accounting in a way that I even I can get it. Something stinks in that department and it is more than my psycho-centered look at it can catch.

  52. Oliver Wyman : Big Financial Firms May Be Riskier Than They Appear

    http://knowledge.wharton.upenn.edu/article.cfm?articleid=2259