December 5, 2008
News & Opinion: And the bull collapses.
The time frame: the 1980s.
Lewis thought the happenings on Wall Street were an anomaly; a period of time that would meet its demise when the American youth planted their stakes in the ground and rebelled against greed; when the youth abandoned Wall Street ideals and overturned the system. Lewis waited and instead of rebellion found that:
Somehow that message failed to come across. Six months after Liar's Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They'd read my book as a how-to manual.
In the two decades since then, I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents' world when you can buy it, slice it up into tranches, and sell off the pieces?
This October that changed. The economy brought us all to our knees. Wall Street's pockets of air came crashing down and much of the world stopped.
Is this is the the end of Wall Street? Probably not. But perhaps its the end of this period of anomalies.
Lewis' latest book Panic! The Story of Modern Financial Insanity is a compilation of articles on what lead to present-day Wall Street, beginning with the crash of 1987.
In an interview with the Wall Street Journal, he's asked what the next get-rich-quick scheme will be. He speculates:
Mr. Lewis: We have entered a period of risk aversion unlike anything we've seen in our lifetime. Investors will be too wary for a while. You'll read stories about people who got rich betting against subprime mortgages and then about people who combed through the wreckage and found bargains. The next rich wave will be those who figure out where the value is. As for the average American investor, he'll be a deer in the headlights for years. It will be a while until greed gets comfortable again.
Let's hope greed doesn't get too comfortable anytime soon.
About Dylan Schleicher
Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.