Michael Lewis continues his around the world tour of the
2008 financial crisis from the view of Germany: It's
the Economy, Dummkopf!. The story in the September issue of Vanity Fair
seems to be all about excrement. We heard that there were big chunks of the
mortgage securities business that were terrible. There is the famous email
describing the Timberwolf
as on sh*tty deal.
did great job offering some insight from Ireland, Greece, and Iceland. In this story he seems distracted by feces and Nazis. The
biggest insight I took away was:
At bottom, he [Dirk Röthig, of the German financial
institution IKB] says, the Germans were blind to the possibility that the
Americans were playing the game by something other than the official rules. The
Germans took the rules at their face value: they looked into the history of
triple-A-rated bonds and accepted the official story that triple-A-rated bonds
were completely risk-free.
IKB and many of the other German banks thought they were
getting a good return on the mortgage-backed securities with little risk, but
were actually getting a sh*tty deal. I get it. But I think he belabors the
Michael Lewis could write about the economics of a paper
bag and I'm sure it would be interesting story to read. In fact, I paid for a
subscription to Vanity Fair just because of his articles. This one came
up a bit short. Maybe he just thought the underlying story was not interesting
enough so he spiced it up with lots of stories about German scatology. He
layers in some Jewish alienation in Germany for some spice in his the
discussion of feces.
the Economy, Dummkopf! is still worth reading and still offers a few great
insights into the 2008 financial crisis.
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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