Michael Lewis!

By James Kwak

On the title page of my copy of The Big Short, in black ink, it says:

“For James Kwak

With admiration”

And then a scrawl that I take to be Michael Lewis’s signature. (Christopher Lydon got the book signed for me, since Lewis was on his radio show a few days before I was.) It may be the only book I’ve ever bothered to get autographed.

So I was especially happy to read that Lewis also wants to break up the big banks (hat tip Ezra Klein):

“Along with the other too-big-to-fail firms, Goldman needs to be busted up into smaller pieces. The ultimate goal should be to create institutions so dull and easy to understand that, when a young man who works for one of them walks into a publisher’s office and offers to write up his experiences, the publisher looks at him blankly and asks, ‘Why would anyone want to read that?'”

When Simon and I made that the centerpiece of the last chapter of 13 Bankers, I thought our chances were slim. When we wrote, in the epilogue to the paperback edition, that a proposal to do exactly that had been voted down, 61 to 33, in the Senate, I thought they had changed from slim to none. It’s still a long shot, but the issue hasn’t died, and if anything is getting more attention now, what with people like George Osborne threatening to break up banks if they don’t reform themselves. Perhaps it isn’t impossible.

20 responses to “Michael Lewis!

  1. Not as big a fan of Michael Lewis as you are James, but yeah that IS pretty cool. I think I would be more excited with David Einhorn (of Greenlight) or Alan Blinder.

    You could make a semi-argument that Michael Lewis is like a modern day Upton Sinclair. In my opinion it’s “a stretch” and Sinclair outshines Lewis, but the argument is there.

  2. I don’t think that George Osborne really wants to break up the banks. He probably wants to be seent to be willing to break up the banks, since it plays well with the electorate, but he is doing everything he can not to reform the banks. If one were generous, one might say that big banks is all the UK really has, so he has no realistic option.

  3. Given the incestuous relationship between gov’t, regulators and TBTF banks, more inbred, artifically complex solutions will probably be spawned by this latest attempt to demonstrate due diligence. The moral hazard posed by the negative equity positions of TBTF is unpredecented. The good news is, citizens seem to be waking up to this hazard and leaders are feeling some heat.

    We DO NOT need to reinvent the regulatory wheel. Citizens need to push the common sense solutions offered by KC Fed President Tom Hoenig and Professor Lynn Stout. Mr. Hoenig calls for a reinstatement of Glass Steagall and Professor Stout calls for a return to the common law regulation of derivatives know as the “rule against difference contracts”. This first link is a short speech by Mr. Hoenig and the second is an article by Lynn Stout.
    http://www.c-spanvideo.org/clip/3343244

    http://blogs.law.harvard.edu/corpgov/2009/07/21/how-deregulating-derivatives-led-to-disaster/

    The following is a brief comment by Michael Greenberger on “The Big Short”. It demonstrates the common sense behind common law rules that, for centuries, have been used to regulate derivatives trading.

  4. For more info check out my post on the Federal debt and fiscal cliff.
    http://www.standupforyourrights.me/?p=1047

  5. 4qffmxz6v

  6. http://www.marketwatch.com/story/so-god-made-a-banker-2013-02-06?link=MW_story_popular

    Then, after God made a banker, he made a useless little F*ck known as “CEO of gas exploration co”
    http://www.reuters.com/article/2013/02/06/us-sandridge-contract-idUSBRE9150EM20130206
    I guess Tim Ward took pity on Aubrey McClendon and thought “Gee, I don’t want my ‘dear friend’ Aubrey to think he is the only SELF–DEALING JACKA$$ whose company is squatted in redneck Oklahoma. Somebody has to save this sorry–A$$ son of a b*tch

    But that is only a guess as to what Tim Ward was thinking when he self-dealt shareholder assets to himself. One never really knows what goes on in some narcissistic basterd’s head, do they???

  7. I would agree with Peter. The more you follow George Osborne the more you are perplexed by his resistance to his own professed ideology.

  8. Congrats on the signature! I enjoy all of Lewis’ books, especially his “fly on the wall” POV.

    I am reading 13 Bankers for the first time. I after each section, I become very discouraged about the direction of our country. I email my Illinois Senators and U.S. Rep, and get bland form letters in return.

    The way the country is going, IMO, is that the banks will entrap everyone in debt: Housing debt, education debt and tax debt. It’s just another form of slavery.

  9. James Coffman

    Michael joins a long list of folks who realize the first step to reform is to bust up TBTF institutions. Our best hope is to convince investors that the component parts of such institutions will deliver more value than the large banks in their current form.

  10. ‘The ultimate goal should be to create institutions so dull and easy to understand that, when a young man who works for one of them walks into a publisher’s office and offers to write up his experiences, the publisher looks at him blankly and asks, ‘Why would anyone want to read that?’”’

    Michael Lewis worked at Salomon Bros in the 1980s, and reported the shenanigans there, at that time. So, I guess we’re abandoning the ’13 Bankers’ claim that everything bad happened because of Gramm, Leach, Bliley (1999)?

  11. Bruce E. Woych

    Trusted Criminals: White Collar Crime In Contemporary Society [Paperback]
    David O. Friedrichs (Author)

    Trusted Criminals: White Collar Crime In Contemporary Society by David O. Friedrichs (Jun 25, 2009)

  12. Bruce E. Woych

    10 Reasons The U.S. Is No Longer The Land Of The Free
    by Jonathan Turley … the Shapiro professor of public interest law at George Washington University.
    http://jonathanturley.org/2012/01/15/10-reasons-the-u-s-is-no-longer-the-land-of-the-free/
    (585 Responses to “10 Reasons The U.S. Is No Longer The Land Of The Free”)

  13. Bruce E. Woych

    Cultures and Organizations, Software of the Mind: Intercultural Cooperation and its Importance for Survival
    Geert Hofstede (Author)
    From the Back Cover
    The Classic Work on “Groupthink”-now in paperback! Since its original hardcover publication, this trailblazing work has stirred a response so deep and wide that its subtitle has become part of our language. Now for the first time in paperback, Geert Hofstede’s study of the “software of the mind” helps us look at how we think-also at how we fail to think as members of groups. Drawing on decades of rigorous research, the author reveals the unexamined rules by which we live and work together. Melding unswerving intellectual courage and hard social, cultural, and organizational research, Hofstede shapes a sobering picture of a world perilously lacking in self-knowledge-unaware of serious difference between the groups that populate our planet and appallingly oblivious to the hidden “programs” that govern the behavior of cultures in a time of skyrocketing global contact. But culture shock-whether the shocking contact is between an individual and a new country, between organizations, between the sexes, or between opposing diplomats-can be turned to our advantage, Hofstede says-if we understand it. And understanding is what this work is all about. This is a book that every thinking person will want to read. Broad in scope, profoundly original in thought and profoundly important, it offers vital knowledge and insight on issues that will shape the future of our individual and collective lives. and profoundly
    See all Editorial Reviews

    Cultures and Organizations, Software of the Mind: Intercultural Cooperation and its Importance for Survival

  14. Why not as Einstein said,”Make it simple”.
    Rule One: The Central Bank is to be the ONLY source of issuance of the sovereign currency.
    Rule Two: The Central Bank MUST maintain the quality and quantity of the sovereign currency.
    Simple enough? It would mean that any Private For Profit Bank (PFPB) would not be allowed to “print money” and would have to be 100% capitalization. To prevent a total collapse of the currency, the Central Bank would allow all banks (regardless of size) to borrow what they need to be 100% liquid (solvent) at a fixed rate set each year;2013 would be 2% for 36 years.
    You cannot be TBTF if you are 100% solvent with money that is “legal tender” . All bets (stocks, houses, tulips) whatever become a zero sum game. Winners are paid, losers can pay. all from existing money.
    As Frederick Soddy said as It is available free on the net;: http://archive.org/stream/roleofmoney032861mbp/roleofmoney032861mbp_djvu.txt
    THE ROLE OF MONEY-WHAT IT SHOULD BE, CONTRASTED WITH WHAT IT HAS BECOME.By FREDERICK SODDY.
    READ IT and discover “What is now the role of money” Written in 1926 and 1933 IT TALKS ABOUT TODAY!! How as Steve Keen says the crisis today is a result of “credit expansion”, How William Black feels about banks. Most importantly, since written in 1926 and 1933, “Where we will go wrong and how we may be able to solve our flaws.” Please, please after reading***”***** “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC), Hindu Prince, founder of Buddhism.
    Then read:http://bit.ly/MlQWNs
    PROVE ME A BIGGERFOOL !

  15. Bruce E. Woych

    Quadrillion Dollar Derivatives Market 20 Times Global GDP

  16. Bruce E. Woych

    Financialization and the World Economy

  17. Bruce E. Woych

    The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead by David Callahan

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    Catherine Austin Fitts Interview:The Looting Of America (Part 4 of 4)