Comments on: The Financial Meltdown: A Guest Post from Mrs. KfC

By: KevinfromCanada

KevinfromCanada — Thu, 14 Apr 2011 03:24:07 +0000

Here's a link to my review of her book. Unfortunately the pdf version is no longer available but at the end of the review you will find a link to the Canada West Foundation site that further describes it and which also has a link to the pdf file of the Vision document that resulted from the project.

By: @KA

@KA — Thu, 14 Apr 2011 03:16:36 +0000

speaking of Non-Fiction titles….. a wonderful post by Mrs KFC : )

i remember browsing your note mentioning a book she was involved in publishing… can you kindly forward me the web link to that site with the pdf samples Kevin as i cant seem to locate that specific post?!?!

ThX

By: Max Cairnduff

Max Cairnduff — Tue, 04 May 2010 14:30:53 +0000

It is remarkable. I’ve mixed views on Matt Taibbi’s stuff but he has brought out the ubiquity of Goldman’s quite well (though if I were on Goldman’s franchise committee I’d be hanging out in dark alleys with a baseball bat and hoping to run into him).

There’s an interesting tension, you want the best in government and Goldmans is frequently just that, but when government is taking decisions that profoundly affect their bottom line there is a clear potential conflict of interest. The bailout of AIG springs to mind…

By: Sheila O'Brien

Sheila O'Brien — Tue, 27 Apr 2010 18:30:17 +0000

Max;
You are so right. The big bucks get paid in the investment banks and hedge funds and the regulators get paid a pittance (relatively speaking), so the system is rigged (in this and many other ways).
It is also interesting (read “terrifying”) to note that in the US, the best credential for senior powerful positions in any administration is a career at Goldman Sachs. If you look back over the last 75 years, virtually every administration has had GS alumni at the epicentre of financial power, making regulations to benefit guess who?

By: Sheila O'Brien

Sheila O'Brien — Tue, 27 Apr 2010 18:24:24 +0000

Shelley:
It seems that this keeps happening, but the cycles get shorter (Enron, Worldcom, etc was only 9 years ago) and the amplitude gets more severe. It’s depressing, isnt it?
Thomas: People seems willing to suspend disbelief when offered a good deal. If only everyone remembered – when something seems to good to be true, it is! And many of the folks who were lured in to huge mortgages trusted the vendors, who were in this only for commissions.

By: Sheila O'Brien

Sheila O'Brien — Tue, 27 Apr 2010 18:16:20 +0000

Isabel; Indeed there are many books to be written, and I hope that people do read them, and understand how careful we all have to be with respect to our investments. The days of the trustworthy, local banker are long gone, we are now in an era of Caveat Emptor writ large.
Leroy; I agree with you – Lewis is at his best writing about Wall Street, and this last book is another example of him in top form.

By: Sheila O'Brien

Sheila O'Brien — Tue, 27 Apr 2010 18:09:51 +0000

Kerry: “how long will it be until we recover from this”? Alas, a long time for the average person to recover, I fear, but the Wall Street types havent missed a beat. They HAVE recovered.
And Mary, I will read “The Gods that Failed” as soon as I can find it, and let you know what I think. I did read Lanchester’s book and while it was interesting, I didnt find anything new or compelling in it, having read the other 5. If one were to read it, I’d suggest substituting it for “The Big Short”, as they cover the same teritory.

By: Sheila O'Brien

Sheila O'Brien — Tue, 27 Apr 2010 18:05:34 +0000

Dear KFC Readers:
thank you for your comments on my guest post, and for your forebearance in overlooking my rookie mistake (writing a post then disappearing to Spain for 2 weeks). Thank you also, KFC, for responding to some of the comments in my abesence. I’ll reply to individual comments in separate notes below.

By: KevinfromCanada

KevinfromCanada — Tue, 20 Apr 2010 23:54:13 +0000

Thomas, Max: As both The Quants and The Big Short show, there were quite a few people who did know that this was all a house of cards — it seemed to serve a lot of people’s interests to ignore them.

I have the same impression that you do of the regulators, Max. There’s just too much money being employed in a bank — “outsourced training department” is what the regulatory agencies become. Much the same happens with the reporters who Thomas mentions. Once they get a basic understanding of the financial world, they head off to become analysts at three or four times the salary. And there are certainly many, many more analysts than there are financial reporters so I don’t think that is a circumstance that is likely to change.

Mrs. KfC will be back with more thoughts in about a week.

By: Max Cairnduff

Max Cairnduff — Tue, 20 Apr 2010 22:56:05 +0000

Fascinating, and good to see Michael Lewis back on form, his last couple of books I thought weren’t as strong as some of his earlier.

I’m curious too to hear what Mrs KfC makes of the Gillian Tett, I’ve heard good things of it.

The whole saga is remarkable, though even more remarkable is the lack of post-crunch regulatory response. Essentially, nothing is changed. Business as usual.

The point on regulators is well made, my experience of them is that they’re just not paid that well, compared to in-house as compliance officers. If you’re a skilled regulator, you can carry on in that job or take a salary multiple and go to a bank. It leads to a hollowing out, senior regulators are often ex-bankers, junior regulators are compliance officers in training. The regulator becomes a form of outsourced training department.

Thanks for this post, I found it very interesting and when Sheila’s back I look forward to her comments.

In the meantime, the question which seems always to remain relevant is this: Where are all the customer’s yachts?