Be sure to see the 60 Minutes piece with Michael Lewis, discussing his new book “The Big Short: Inside the Doomsday Machine.”

Fascinating stuff . . .

Video here.

Category: Markets

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13 Responses to “Michael Lewis on 60 Minutes”

  1. dblwyo says:

    Barry – thanks. There’s also a great interview with him on Bloomberg in this morning’s news.

    Lewis Faults ‘Short-Term Greedy,’ Cites Goldman: Interview
    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUpBrUJ.pIiA

    Interview by Erik Schatzker
    March 15 (Bloomberg) — Michael Lewis made a name for himself on Wall Street by writing about it. His 1989 book, “Liar’s Poker,” exposed the inner workings of Salomon Brothers, a firm then at the peak of its power, and described his improbable run as a bond salesman there.
    Lewis has since written about Silicon Valley, in “The New New Thing,” baseball, in “Moneyball,” and football, in “The Blind Side.” His newest book, “The Big Short” (W.W. Norton & Co., 266 pages, $27.95), chronicles how a small handful of investors anticipated the subprime-mortgage collapse and positioned themselves to make fantastic profits.
    Lewis says “The Big Short” is “the end of my story that I wrote 20 years ago” because it documents the damage wreaked by securities first developed at Salomon Brothers in the 1980s. He attributes the economic crisis of 2008 to the emergence of a “short-term greedy” culture on Wall Street, the growing complexity of financial instruments and traders’ efforts to profit at the customer’s expense.

  2. troubled times says:

    The video should be required viewing for a drivers license or voting opportunity

  3. cognos says:

    Really sad to see the naivety and misinformai in Michael Lewis on this story.

    “They took this junk… these residuals from these other pools and packaged it as AAA”. So what? This statement makes no sense.

    The problem with most journalist stories is because we know they want to be sensationalist… know one respectable will talk with them. But you cant really know anything without talking to key, successful major people within an industry. (They cant ALL be bad and liars).

    How come he didnt have an interview with Dimon? Blankfein? Paulson? Howabout top lieutenients who ran structured credit at Bear/Lehman? I have seen Eddie Lampert do a great write-up on subprime and banking. Some guy who happened to “bet short” on subprime… doesnt mean he knows much. Its a classic case of the lottery winner talking about how he picks numbers through a system. Bet that Dr. guy will fade into obscurity and be a forgettable investor the rest of his life.

    The “subprime” story was just a good financial instrument to SHORT the housing story. The real underlying economic story is that EVERYONE… citizens, bank executives, govt, regulators, etc. Almost ALL thought housing would not go AT ALL. And then it went down MORE than even the pessimistic forecasts. Classic bubble.

    But it really didnt have to do with “lax lending”, “bad credit”, “bad models”, “rating agencies using Goldman models”, “bad structures”, etc. It had to do with 1 SINGLE INPUT — house prices.

  4. daredevil23 says:

    Nothing new in the 60 minutes piece that hasn’t already been discussed here *months* ago!

  5. Peter G. says:

    Thanks @dblwyo for the bloomberg interview tip.

  6. flipspiceland says:

    I watched it and was dumbfounded when Burry, the guy with Asperger’s, who made a billion dollars by buying the insurance on mortgage backed securities thru Goldman Sucks–via AIG— wasn’t called on the fact that he wouldn’t have received one cent if Hank Paulson had not stolen a trillion dollars from all of us and the progeny of several generations to pay AIG 100 cents on the dollar because Goldman Sucks and AIG would have been unable to pay off on the insurance claims.

    Who sets up these stupid interviews that hide this kind of scandalous money grubbing?

    What bullshit.

  7. [...] mentioned earlier how much I liked the 60 Minutes piece with Michael [...]

  8. cognos says:

    flipspiceland –

    You are wrong on this.

    Almost every american would not be getting a paycheck this week if all the banks decided not to give them $ from there accounts (not to mention lost savings).

    Basic “trust” that major banks will honor financial contracts (deposit accounts or CDS trades) is simply too important. Thats why AIG failure was managed and these bailouts are a good thing.

    Note — AIG looks like it will not cost the US taxpayer $1. The entire bailout will likely earn a healthy PROFIT for the tax payer. It turns out a crisis… is a good time to invest.

  9. DeDude says:

    Great to see him point out that the Wall Street bonuses are coming directly out of taxpayers pockets. They borrow from the Fed at 0% and then use that free money from “we the people” to basically lend back charging interest to “we the people” (by purchase of treasuries that taxpayers are paying them interest on). Why are we doing that? If interest rates need to be kept low to get “scared money” out, then let the Fed purchse the treasuries directly. Why is there such a thing as a 1, 3, 6, and 12 months treasury at all? With at national debt of $ 12 T why would “we the people” do any borrowing at such a short period? If the banks are to take a spread on borrowing short, the least we should demand is that they also take a risk by lending back to us long. There should be no spread for borrowing short and lending back short. If we for some reason need to keep short treasuries available we should by law define that treasury may not pay interest above the Fed rate. They should simply not put any more of them out there than what will keep the interest rate exactly at the Fed rate (at most 10bp on 6 mo. and 25bp on 12mo). No free sugar canes for Wall Streets bonus babies.

  10. flipspiceland says:

    @cognos

    If all the banks decided not to give americana their paychecks is ridiculous hyperbole.

    AIG already has cost the taxpayer and they are petitioning for more as you write this nonsense.

    You write more and more with empty words like a paid shill, cruising the internet for anti-Goldman Sucks and AIG statements.

    Assisting AIG and thru them, Goldman Sucks, and thru them to Burry’s group, thru an orderly bankruptcy would have been far better deal for everyone but the buttphuckers at AIG and Goldman.

  11. Stephen says:

    I’m tired of the equivocation concerning the word ‘corruption’.

    Example: Say I’m a contractor with a backhoe and I receive a request to show up at a job site and tear up some concrete. I show up at the site and am asked to dig through the concrete but I can see plain as day that this guy is trying to get at the vault under the bank where I’m at. But he offers to pay me a *lot* of money to carry on, so I do. Am I stupid or corrupt?

    All of Wall Street knew that they were building a giant house of cards. It has, as Lewis points out, become the staple of Wall Street. It is – corruption. Lewis tells a story in Liar’s Poker about selling bad investments to an unsuspecting client and becoming a BSD as a result. Liar’s Poker was a confession of corruption for heaven sakes.

    We are way beyond ‘stupid’ …

  12. V says:

    @Stephen, flipspiceland

    I think this also shows how much of a sucker for, and how society has become reliant on so called ‘reputation’ .
    Can you imagine how much derision the guy with one eye and Asperger’s would have received in 05/06 had he tried to go public and proclaim that RMBS/CDO’s etc were rubbish.

    I think Barry summarised this effect quite well the other date when calling out Gasparinos “who are you going to believe” routine.

  13. [...] mentioned Monday, I found The Big Short discussion on 60 Minutes quite interesting. I went over to Amazon to check [...]