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A Memo Found in the Street (pdf)
By BARRY L. RITHOLTZ To: Washington, D.C. From: Wall Street Re: Credit Crisis Dear D.C., WOW, WE'VE MADE QUITE A MESS OF THINGS here on Wall Street: Fannie and Freddie in conservatorship, investment banks in the tank, AIG nationalized. Thanks for sending us your new trillion dollar bailout. We on Wall Street feel somewhat compelled to take at least some responsibility. We used excessive leverage, failed to maintain adequate capital, engaged in reckless speculation, created new complex derivatives. We focused on short-term profits at the expense of sustainability. We not only undermined our own firms, we destabilized the financial sector and roiled the global economy, to boot. And we got huge bonuses. But here's a news flash for you, D.C.: We could not have done it without you. We may be drunks, but you were our enablers: Your legislative, executive, and administrative decisions made possible all that we did. Our recklessness would not have reached its soaring heights but for your governmental incompetence. THIS MEMO PROVIDES A BRIEF HISTORY OF your actions that helped create this crisis. We on Wall Street do not deny our part. rtwt at link for a 10 year history. A lot of this remains and needs to be fixed. We created these securities, we rated them triple-A, we traded them without understanding them. Now that they have gone bad, we are real close to getting the rest of the country to take them off our hands. Thanks, D.C. None of this would have been possible without you. Very truly yours, Wall Street In my opinion, the greatest fault with the $700 billion bailout is that it encourages more moral hazard on the part of the financial community and our whole culture. No one is held responsible. No one will suffer for their individual greed and error. But everyone will suffer to the tune of $ 2,300 for every man woman and child to fix it. And that's just for starters. There needs to be a lot more judgment of and consequences for these malefactors as individuals. If it doesn't start till after November 4, that's OK with me. But it's time people were held responsible for the errors on their watch. Should have started with Tennant and Mueller. Casey and Abazaid. There will be consequences for these failures. What is being debated in Washington is who bears the burden of those consequences. The current plan does not allocate the burden appropriately. I prefer inaction to this plan. Posted by: Nimble Spemble 2008-09-28 |
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