By many so-called "smart people" on Wall Street, Michael Lewis is lionized. His book "Liar's Poker" was typically their pre-pubescent introduction to the dark world they now inhabit.
So, I wonder just how their world-view will be affected when they get word of what Michael Lewis has to say about their day jobs.
Pimping his new book "The Great Short" on 60 Minutes, Michael Lewis had the following to say about the banker's business model:
"It's a very elegant form of theft."
My jaw dropped when I heard those words. Truth is so rarely spoken.
From my short time dealing with the world of bankers, I analogize their business plan to the troll who lives under the bridge.
In three Billy Goats Gruff, the troll just threatens to eat each goat. Whereas bankers just charge a toll. "In exchange for not eating you, pay me 500 basis points."
I admit that what I'm describing is just a highwayman. But, for whatever reason, calling anyone a troll is always much more satisfying.
The highwayman analogy is also one that apparently appeals to Mr. Lewis.
Mr. Lewis also touched on a few other subjects near and dear to Oscar's black heart.
For instance, he had the following to say about the incentives to create massive short-term profits without regard to long-term risks, a subject I recently touched upon in relation to my continuing interest in the subject of limited liability.
Speaking of Morgan Stanley's Howie Huber:
"He's allowed to resign from Morgan Stanley and he takes with him millions of dollars in back pay, tens of millions in back pay. It was all hushed up."
Huber is estimated to have lost $5-$6B on trades relating to mortgage-backed securities.
Speaking of the management of Wall Street banks:
"Anybody involved at a certain level at all these firms made huge sums of money by any standards."
Speaking on how top management was allowed to pocket massive fortunes all the while engaging in a strategy that had "the effect of leaving a corporation under capitalized vis-a-vis long-term risks":
"Stan O'Neal at Merrill Lynch and Chuck Prince at Citigroup are the most obvious examples. They were paid not tens but into the hundreds of millions of dollars to run their firms into the ground."
All of which makes me wonder, if Michael Lewis has this to say about Capitalism's purest physical embodiment, then what does he think about Capitalism itself?