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Posts Tagged ‘Ben Bernanke’

This is an energy drink book.  It is all the testosterone genres in one.  A comparable experience would be cramming all of Gibbon’s The Decline and Fall of the Roman Empire into one weekend, except Roger Lowenstein has written a history The End Of Wall Street that is not to be forgotten.

The subject is the 2008 financial collapse of banking and finance but he begins the history with the Reagan era of deregulation and the misidentified ghosts of the Great Depression.  Neither politics nor banking are given a pass.  A rogues’ gallery opens the book.  One of the people to emerge with reputation enhanced is mutual-fund manager Bob Rodriguez, CEO of First Pacific Advisors.  Exhausted by the battle against the stampeding herd, he began a one-year sabbatical in 2010.  Another who rose above the herd was Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corporation.

The two high profile government men still in town are Ben Bernanke, chairman of Federal Reserve, and Timothy Geithner who has moved from president of Federal Reserve Bank of New York to succeed Hank Paulson as Secretary of Treasury.  Should you feel protected?  Only if you think two bungling Boy Scouts can overcome the ignorance and incompetence of their past.  The author spends no time in name calling or vindictiveness.  He has no need.  He describes their learning as they go so well one is tempted to call it internships.

How did things go so wrong when these politicians and bankers were the elite of America?  From vastly different backgrounds they were nevertheless privileged by education and employment.  They were more than well compensated.  It is as though they became converts to an earlier hedonist religion of hubris, greed, and risk.  It was worship, feast, dance, indulge, again and again.

Have enough of us learned that we were duped by these sunshine boys and that we must demand public and private leaders with a better grounding in history and economics?  Have we learned that politicians who appeal to economic and social fears and use Tea Party rants are not qualified to serve?  Have we learned to pay our debts and prepare for times when crop yields are low?

Your answer to those questions is probably no better or worse than mine so I leave them unanswered.  A useful preparatory step to being a responsible citizen and investor would be to read this masterful history.  Charles Marlin

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If only the financial mess we are now in to our crotches could be solved by calling in the pigs who caused it.  We could butcher, salt, and smoke this problem away, but that is not going to happen.  John Lanchester has written a great little book with a sappy title, I.O.U.: Why Everyone Owes Everyone and No One Can Pay.  He is an English novelist and essayist who started out researching our current financial crisis for a novel.  Lucky for us he found the crisis a generational story too good to pass up.

We are harrowed by weak-kneed, ignorant politicians in both the US and UK, and a gluttonous financial sector that has bribed its way to financial anarchy.  It is a modern plague of Grendels and clinging mothers too big for a first round knockout.  The savagery and loses will and are changing our way of life with the rage and blindness of the American teaparties a mild, early symptom.  More is to come.  So if you want to know how all of this came about in a well researched, articulate, clear narrative, buy the book.

If I could pull a fascist edict I would make the book required reading for every community foundation trustee and director.  Trustees and directors are charged with protecting a public trust and ensuring that it works for the public good.  That means they need to understand risk far better, more openly, and with a longer historical perspective than the fast talking investment managers out to sell their private brand of risk management.  They need to remember that pigs are cute and hogs are very intelligent animals.  As animals they are not pets, friends, or environmental partners.  If you can’t get good sized hams out of them, sell them.

As long as I am making recommendations I have one for President Obama.  I know he is busy but I understand he is a fast reader.  So here it is.  Send the cute one home.  Tell the dowdy one not to call, you will call him.  Read the book, then pass it to your lady because I voted for a team, not a single act.  Charles Marlin

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