There is a long-but-worth it article (The End) in Portfolio by Michael Lewis, who traces the arc from Liar’s Poker to the End of Wall Street.

Before you turn in fear of yet another Magazine Cover Indicator, be aware of one thing: The prostrate bull on the cover of the magazine does not represent,a s you may have guessed, the stock market. What Lewis is declaring dead is the old way Wall Street used to do business.

When I published my book, the 1980s were supposed to be ending. I received a lot of undeserved credit for my timing. The social disruption caused by the collapse of the savings-and-loan industry and the rise of hostile takeovers and leveraged buyouts had given way to a brief period of recriminations. Just as most students at Ohio State read Liar’s Poker as a manual, most TV and radio interviewers regarded me as a whistleblower. (The big exception was Geraldo Rivera. He put me on a show called “People Who Succeed Too Early in Life” along with some child actors who’d gone on to become drug addicts.) Anti-Wall Street feeling ran high—high enough for Rudy Giuliani to float a political career on it—but the result felt more like a witch hunt than an honest reappraisal of the financial order. The public lynchings of Gutfreund and junk-bond king Michael Milken were excuses not to deal with the disturbing forces underpinning their rise. Ditto the cleaning up of Wall Street’s trading culture. The surface rippled, but down below, in the depths, the bonus pool remained undisturbed. Wall Street firms would soon be frowning upon profanity, firing traders for so much as glancing at a stripper, and forcing male employees to treat women almost as equals. Lehman Brothers circa 2008 more closely resembled a normal corporation with solid American values than did any Wall Street firm circa 1985.

Here’s the cover:



The End
Michael Lewis
Portfolio, Nov 11 2008

Category: Contrary Indicators, Corporate Management, Finance, Financial Press, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

35 Responses to “Portfolio Cover: After the Fall”

  1. karen says:

    GREAT cover!!! (Not to get everyone riled up but could it mark a turning point?)

  2. jmborchers says:

    CEOs are now announcing as they buy company stock. Very interesting times.

  3. AmenRa says:

    I read this earlier this week. He investigated the subprime market and realized what was going on. The company he was with took the other side of the trade. Later on they realized that they helped that market grow by taking the short side. Pretty interesting read.

  4. kiltartan says:

    @AmenRa: M. Lewis interviewed a group of people who took the other side of the trade.

    Very interesting how he ends the article….dining with John Gutfreund…end-of-times stuff indeed.

  5. bri says:

    awesome inside look at the mass delusion that still perpetuates the buy-side.

    great piece.

  6. bri says:

    meant sell-side

  7. jmborchers says:

    Looking at the volume going into this fall is significantly lower than the orignal fall. If I’m correct it means people have drawn the line in the sand and they refuse to sell. Let’s see what happens. If everyone refuses to sell at a low bid it won’t go lower.

  8. karen says:

    jm, just beware, they may try to drop us through 840 to trigger stops…. then they swoop in and grab stocks at even lower prices… your idea works well, too though.

  9. karen says:

    guess they decided to take it down… let’s see how volatile we get… hang on.

  10. I-Man says:

    Where’s the volume???

    WAY to light for a break of a major low…

    This is weird.

  11. karen says:

    why can’t we have simmons, paulson and falcone in charge? i think the fed, treasury and sec should abdicate to these guys… at least we’ll have smart foxes in the hen house…

  12. R. Timm says:

    BR- Glad to see this on the front page. One of the commentors posted it the other day.

    Anyone notice that C is down all the way to $8.50. I would think with all that bailout money their share price would have some support at these levels. Anyone follow C and think there is some news about to come out? How do you value a company with massive losses and a negative balance sheet that is going stay solvent only through government assistance? Insert C, GM, etc.

  13. I-Man says:

    Falcone is such a badass.

  14. jmborchers says:

    Technical panic only at this point. Let’s see how many people really think this is the end of the world.

    I ain’t selling. My 401K (as long as I have a job) will build nicely over the next 30 yrs.

  15. Mannwich says:

    Here we go!!

  16. Concerned American says:

    Would this picture be better with Bush standing in his hunting gear with one foot on the bull, with a big rifle in his hand, and that patented grin on his face?

    He slayed the bull. See there he did accomplish something in 8 years.

  17. jmborchers says:

    If the S&P only falls 12 points below the old low that’s a major victory, LOL

  18. jmborchers says:

    I was taking a second look at leveraging as a small play and options are indicating a 10% up move from here for short term Novs.

    I would have paid 3%-5% but not 10%.

  19. Mannwich says:

    On another note – unless I am missing something here, is there any way that BAC still pays MER $28/share upon the closing of that acquisition? MER is now trading in the 11′s.

  20. Whammer says:

    jmborchers, unfortunately some of us don’t have a 30-year runway on our 401(k)s. I’m a “youngish boomer” at 50, I think of what the people who are 57-62 must be thinking now………..

  21. jmborchers says:

    Whammer most at work during the first major fall moved over to bonds. Problem is we don’t know what bonds are good either.

    At 50-60 I’d still rather be all in on the market. 2-3% divends buy a lot of shares going forward for SPY.

  22. jmborchers says:

    I downgrade QID to Sell based on valuation. LOL

  23. Mind says:

    The ones 57-62 have been in cash since the high a year ago (at least some of us).

  24. DP says:

    Arrrgghh, CNBC just reported “good news!” – dow is 100 points higher than it was a few minutes ago.

    Sounds like the recession must be over folks, whose up for a drink?

  25. albnyc says:

    I have more than 15 years until retirement comes into view. Glad I diversified my holdings well: equities, real estate, oil. D-oh!

  26. I-Man says:

    Is this muted response and current bounce off of breaking the lows on SPX an indication that we’ve already made our “psychological low”…?

    This could be a solid entry point for new longs should we pick up some volume on the buying… maybe there were a ton of buyers waiting precisely for a retest/break scenario before committing new capital to equities. That would make sense given the uncertainty surrounding the election following our last low…

    Thats the only thing I can think of to describe what we’re seeing now.

  27. DL says:

    John Kenneth Galbraith has said that “fiscal memory” lasts about 20 years.

    In this case, I think it’ll be a lot less. The “financial engineers” on Wall Street will be back before long.

  28. Pat G. says:

    “Problem is we don’t know what bonds are good either.”

    Look for that market to crash in 2009.

  29. Whammer says:

    Good on ya, Mind!

    @albnyc — sounds like the way I was diversified in 2000 — hardware, software, networking, dot coms……

    I just have a secret desire to work until I’m 93………

  30. albnyc says:


    Proof that “stupid is as stupid does” I guess. Off to plant my corn crop…

  31. DP says:


    I wondered that too, what is the “margin of error” on a retest? How much data to we really have? Many of the trading charts way back in the past were from a non-digital era before people could set up trades to run at exactly “840.23232″ on the SPX or whatever benchmarks they used.

    Anecdotally, I noticed that even during the run down UYM behaved itself very well. Picked up a little, let’s see how that does.

  32. Mike in Nola says:

    Big bullish sign: Cramer pooh-poohing rally.

  33. Mannwich says:

    @Mike in Nola: What about Bowyer and Luskin? Did they ever capitulate? If not, I’m still bearish.

  34. DL says:

    Mannwich @ 2:57

    The Dow would have to get to 6000 for Luskin to capitulate.

    For Bowyer, it would have to go to 1000.

  35. Pete says:

    Good call .

    @Mike in Nola Says:
    November 13th, 2008 at 2:47 pm-Big bullish sign: Cramer pooh-poohing rally.