Charlie Rose

vongleichent  02/20/2012 01:13 PM Report

This guy is a genius. His equation is basically to surround yourself with the best to gain the knowledge. He takes that and writes a best selling book. It doesn't get any better than that.

blue70531  12/07/2011 02:46 AM Report

The fraud on at Goldman Sachs was that the cards were marked and not more than a dozen people could read the markings. Paulsen arranged tranches according to: Liars Loans, No-Doc Loans, Missed-First-Payment Loans.

It was the ratings. The buyers thought the triple A ratings were Aces. Paulsen was valuing them according to information unavailable to the general market.

viking  11/18/2011 07:12 PM Report

Is Michael Lewis a comedian? I think he is a good author and should stick to his profession, just as an Icelandic fisherman should stick to his job. Funny how the world works, in some of the best schools in America, students from all over the world come to study financial arts and then go off to they‘re homelands to put their skills in to good use for they‘re economy. If those graduates are to blame for the world economic crises, then is it not fair to say that the American professors who thaught the curriculum should take responsibilty for teaching they‘re students the wrong move. I think we should rather be looking at the people who sold they‘re big companys and ran away with the profit as fast as they could. Honestly, has no one spotted theese people, where are they, why not blame it one them? I dont know, maby we shouldn´t be pointing fingers, maby we are all to blame. Come on, it realy doesn´t matter witch nationalaty you are, every nation has it‘s bad apples and we Icelanders have a few of our own. Icelanders in general are not smarter then any other nations and Michael Lewis should know better and apologize to the Icelandic people. It´s just not right to mock a whole nation for a few bad apples. I dare him to sit down with me and talk about real problems in this world. If worst comes to worst we Icelanders would gladly take him on as a refugee when the same senario take‘s place in America.

And by the way, Icelanders found America, maby that was just dumb luck?

anghiari  10/10/2011 05:46 PM Report

Did I hear Charlie after listening to Michael Lewis discuss the banks...say that Obama demonized them? Come on Charlie we know who you dine with at night in NYC...and did you used to have old Marc Halperin on to critique Obama's campaign for President....atta boy Charlie...another one of those who embraces socialism for capitalists...poor Charlie...jounalistic ethics down the drain.

Saultxyca  10/08/2011 03:52 AM Report

Michael Lewis hit it out of the park: Greece has already defaulted. The rest is head-fake. The author's impudent and insightful comments on cultural finance could, and should, fill another book, and he will have plenty of material with Italy, Spain, Portugal and Belgium getting walloped. Who ever thought Greece was like Germany? Really.

armann5  10/05/2011 08:35 PM Report

I have not red “Boomerang” but I have listened to the interview. Mr. Lewis was, among other things, talking about the banking system in Iceland, island of 300 thousand people, fishing nation; they where best in fishing in the world, as he said. He kept on and said that in the end of the bubble; everybody who had given them money wanted it back. He also said; They think they know things they don’t know.

My question as an Icelander is; how did banks all over the world, especially in Germany, UK and USA, with staff that should be the best bank specialists in the world, working in banks with history that goes way back, get the idea that it was save to lend money to banks that were privatized in 2003-2005. Banks with no history, headquarters on an island that nobody lives. That leaves the question who indeed thought they knew the things they didn’t know?

Sugarland  10/05/2011 02:22 PM Report

Haven’t read Michael Lewis’s books but now plan to after Monday’s discussion with Charlie Rose. His analyses are more focused than the macroeconomic analyses, from 30,000 feet or space, that make up much of the popular press.

Moneyball – Demonstrates that our present capitalistic system cannot effectively evaluate the worth of a specific individual to the system. (Basis for class warfare)

Boomerang – Demonstrates that large accumulations of money (leverage) cannot be placed in the care of a person who lacks the capacity to develop responsibility in a capitalistic system. (Basis for failure of investment banks).

Attacking these problems would go a long way to resolving our present predicament.

Pesent day solution of limiting leverage is problematical. Leverage creates miracles. Think two guys in a garage creating one of the highest market cap enterprises in the world. It is the person that is given control of the money that can create wealth………..or destroy it.

JohnGelles  10/05/2011 01:34 PM Report

Past, present and future contain all there is. They want to be understood. Yet the future is unknown and radically uncertain; the past is overwhelming and exists in mountains of records organized to a degree and scattered to a greater degree; and the present won't stand still.

I have just listened to Reid Hoffman and Jeff Wiener of Linked-In fame. They see the need to link yourself to information, knowledge, ideas and opinions, not of a trivial nature like most of Facebook, but of a professional nature to compete and cooperate in education, business and government.

If we are locked into capitalism, as we know it, we seek self-destruction and resurrection, on the Schumpeter model, that fails billions of people and avoids serious purpose for which democratic values yearn.

If we are locked instead into the scientific method in support of peace between nations and human rights within nations, then we have a better future in mind than the past we leave behind.

Michael Lewis introduces us to people -- that species which is alive but not imprisoned in its evolved habits. It is capable of change as no other species is.

We are this moment on the brink of change. Money beckons us to reorganize our debt and reconcile need, demand, supply and work. Work, above all else, in this cockeyed messy time, must be the answer -- and profit driven trends must give way to what we want for our posterity.

If you are an American, it is the blessings of liberty not the curse of greed that is your goal. Money will be your friend; debt must bow to equity.

waltky  10/05/2011 06:24 AM Report

I was really impressed with Michael Lewis...

... would there be any way to have him back with Charlie moderating a discussion with Mr. Lewis and Tom Friedman on the subject of domestic and global economics and politics?

Would think it to be a fascinating exchange.

BVA  10/04/2011 09:42 PM Report

The zombie myth that the New Deal did nothing to improve the economy and the bigger zombie myth that the New Deal was not the proper strategy are stubborn items in the flat-Earth economics manual of Ptolemaic economic cosmology. To see why these myths are just that, myths, one only has to compare side-by-side three relatively available graphs: the unemployment rate from approximately 1929 to 1946 or thereabouts, economic growth as a percentage of GNP for the same approximate period, and also the federal deficit as a percentage of federal spending, or GNP (no GDP yet in the 30's and 40's) if you prefer, again for the same approximate period. A clear correlation pattern emerges. Even those who subscribe to the theory that it was only WWII that "cured" the Great Depression usually concede that wartime deficit spending had something to do with that "cure". The war itself was a giant-sized version a government works employment program 'a la' the CCC, WPA, and the PWA that also had a dramatic effect on the unemployment rate.

In the area of social science, the confirmation of a correlation between government deficit spending and economic growth and a low unemployment rate just doesn't get any better than these three graphs. The theoretical foundation for converting that correlation into cause and effect is also pretty simple. It involves mathematical process of elimination -- a version of "Occam's razor". The four major components of GDP (and GNP) are 1) consumer spending (the largest component), 2) business investment, 3) state and local government spending, 4) federal government spending (by far the smallest before the 1930s and 1940's). When 3 out of 4 of those components decline then start a slow return to previous levels it's pretty clear what the cause of the depression is. When the fourth and smallest sized component also declines somewhat and then increases dramatically to ultimately become as large, if not larger, than one or more of the other components, then it becomes pretty clear which component of GNP lead the way out of the Great Depression -- federal deficit spending.

Some revisionist historians like to pretend that the Great Depression was caused by business uncertainty created by the New Dealers, and therefore the cure was business certainty created by WWII ending the New Deal. No doubt the initial recession was the normal result the stock market financial bubble bursting. And economists Milton Friedman and Anna Schwartz proved that the Fed created the much larger extended economic downturn by doing the exact opposite of what they should have done (and the opposite of what Ben Bernanke is doing now) -- tightening credit and increasing interest rates. When FDR took over after 3 and one half years of economic decline businessmen were more than just uncertain, they were either bankrupt, or insolvent, or they just couldn't get any credit to invest in anything let alone their own faltering businesses. In other words they were about as 'uncertain' as a businessman can be. The New Dealers were the optimistic ones compared to the Republicans who were unintentionally (I think) ginning up any increase in uncertainty they could.

Read Ben Bernanke's recent book about the significant effect the disruption in personal relationships between bankers and farmers and small businessmen (because so many banks went bankrupt) had on the availability of credit during bank crisis years of the Great Depression before New Deal legislation dramatically reduced the rate of bank bankruptcies.

BVA  10/04/2011 08:05 PM Report

Mr. "tabs". Leverage is just a tool. What got us into the economic stagnation we are in was bad-exploitative-predatory-greedy-almost evil encouragement of inappropriate leverage (by Wall St banks' massive warehouse lines of credit to unregulated mortgage lending companies), conflicts of interest (of the rating agencies), and sabotage of the regulatory capacity to stop the bad leverage (by politicians both parties corrupted by Wall St). Read "Reckless Endangerment" by Gretchen Morgenson.

BVA  10/04/2011 07:45 PM Report

A question for every Republican presidential candidate:

"The Obama administration appears to have delayed (deferred, suspended, or slowed) prosecution and civil litigation against executives of banks, mortgage companies, and other financial entities presumably until the economy recovers sufficiently so as not to interfere with that recovery.

"Do you, sir, plan to reinstitute and/or reinvigorate these deferred investigations, prosecutions, and civil litigations against financial executives and entities implicated in causing the economic collapse when the economy recovers?"

robdverity  10/04/2011 03:59 PM Report

Meaningful comments below. Direct consequences to those responsible need meting out. To this end it is heartening to see the "American Spring" taking embryonic form. Anarchy is long overdue. Corruption goes unpunished otherwise. Major players starting with Henry Paulson, Robert Rubin, Sandy Weill, Lloyd Blankfein et al need violating with public acrimony as small compensation for misery caused. Outraged citizenry will come closer than the (non)justice system. NY banks and bankers should pay at least as dearly as they are making the WORLD pay - as we speak. (Paulson bought an island with his rewards for crying out loud.)

tabs  10/04/2011 01:56 PM Report

Not so fast Mr Lewis there are others besides Mr Bass that saw the looming threat of Sovereign Debt and/or US State Debt creating a crisis. The following was written and posted on another Board on 12/26/09

The Illusion Of Control

Sun, 02/28/2010 - 14:19 — tabs

12/26/09..PPOT

------------------------------------------------------------------------------

The joke is on anyone who thinks they have the slightest control over anything.

With regards to events there is an illusion that things are under control..most of the time events fall within a range that gives the illusion of control, then an extraordinary event or series of events can skew that illusion. It is at that time that fear sets in and men panic.

This is what happened in the fall of 2008. Two factors set men to panic at that time

1. The fall of Lehman, which was the culmination of events starting with the Sub-prime, Bear Sterns etc. This series of events were almost linear in nature.

2. The House voting down the first vote of TARP

The voting down of TARP showed that the resort of last refuge being the full faith of the US govt was not going to rectify a dire situation. That failure to act set into motion a panic as everybody realized that events were out of control and nobody knew where the domino's would stop falling. So everybody wanted OUT.

Further men make decisions based upon the best information or perception there of that they have at the time. At a later time they may find that their information was incomplete and events may take a course that is unintended.

So we come to the situation we have today, one year later. If one looks about one finds that there are many respected analysts/investors that are warning of dire consequences for the policies that the US govt has set into motion.

These policies are:

1. The US is currently at 80% of GDP debt levels and is set to go to over 100% in the medium term future with its deficit spending. The long held theory is that one spends its way out of recession. However this is a faulty assumption as what got the world into this mess is leverage. So more leverage in the long run only compounds the mess.

1A. Also this long held theory states that in a crisis of liquidity the way out is to create so much liquidity that things have to start moving once again. However once again the laws of unintended consequences rears its head because it weakens an already weakened currency, which makes a tottering situation even more precarious, one might call this Catch 22.

To this end the US govt is printing money to to cover the shortfall in its ability to sell more debt. This in the long run will debase the currency. The US is not alone in its heavily leveraged position as Iceland, Ireland, Spain, Greece, UK, Dubai and Japan are also very heavily leveraged.

2. The current political leadership of the US is bound and determined to enact policies that they have been selling as heading off a crisis of HC in the future. However the foreseeable outcome of these policies have a very plain to see unintended consequence of stifling the very thing that is needed to help recover from the situation we find ourselves in, of having too much leverage.

3. The very fact that the US govt is trying to spend its way out of a recession/depression while being heavily leveraged in the first place means that its where with all in any coming crisis will be limited. They are simply using what ammunition they have left in the bank and will not be able to pull the same trick twice.

However while virtually everyone knows that the ultimate outcome of these policies are unsustainable and sooner or later will result in another crisis, no one knows what the event will be that will set the crisis in motion. One thing can be surmised is that it will be something that can be considered to be minor. Something that no one would expect to lead to a cataclysm

Since the issue is having a large amount of leverage one would think that the event that would set into motion the next crisis would be a leverage issue. To that end the default on a Bond Issue by perhaps a state such as California, NY, MI, or a large American city such as NY would be the precipitating event. Another possibility is that a Bond auction by a STATE/CITY or the Federal govt finds few investors willing to take the risk. The corollary to having few investors willing to take a risk is that the precipitating event would be that the Bonds of a state etc on the secondary market might one day become illiquid. This would then set events in motion which would start the domino's to falling.

.

winter  10/04/2011 01:16 PM Report

How is money made (liquidity created?) in the stock market that doesn't come from money lost? After the IPO the issue is sent to the parallel universe of the secondary market thats only tangentially related to the success of the underlying and

pps rises and falls on perception alone - accurate or not. PPS doesn't go up forever and bagholders pay to smart money that gets out at the top. Probably a grossly incomplete take on the market but where trading and investing part ways leaves alot of hopes eviscerated and abandoned on the street.

REMant  10/04/2011 01:12 PM Report

If you want to make accurate macro predictions, don't use micro data or theory. The quants say they did that, but it would seem to have been a very limited pool of data.

The reason why these firms are allowed to speculate with a govt guarantee is because the govt, itself, lives on speculation. A number of years ago a writer, strangely silent this time around, called us a Ponzi nation. Keynesian economics is a Ponzi scheme. Nationalizing the banks was not only never in the cards, it could never have worked. Krugman wants, or at least acts like he wants, to borrow and spend, but Keynes realized that would never work, you had to print money to make his scheme work. The problem is he thought it could go on forever.

What made money available to be lent in the first place was the cheaper labor of the emerging countries (and not their saving). That increased profit margins, which allowed leverage to increase, abetted by the central banks, whose monetary policies, designed to keep prices from dropping, flooded their countries with money. Had this not occurred 3rd world incomes and consumption would have begun to come into parity with the developed world, without skewing and threatening the collapse of the whole thing.

Mr Lewis's knowledge of the Depression seems to have been gleaned from novels, movies and secondary school textbooks.

The British appear to have been Iceland's primary investors, and probably played a large role in setting the whole thing in motion. I would not blame it on the Norsemen, who conquered Rome and settled much of Europe, including England, as well as Iceland. Nor blame Ireland on Gaelic naivety, some of whose Scottish branches once were pretty prominent in the world of commerce, even if, in this country, they acquired a reputation for being shiftless.

I think, however, he may have put his finger on one aspect of this, and that is that you cannot expect traditional societies, which for centuries have relied on strong central govts rather than self-restraint and/or interpersonal relations to maintain control, to be able to handle sudden "wealth," anymore than you can some undeveloped nation the discovery of oil or minerals. The Germans inherited a relatively poor land, and their industry is what has made it rich. And they have a history of being uncosmopolitan. The Church reflects rather than causes this altho it has taken its share of criticism from Machiavelli to Marx. Nevertheless, like the debate between Weber and Sombart, or Riesman's inner- and other-directedness, the history of the Church reveals not really an issue with commerce, itself, but two different ideas of economic organization, one, more Protestant, based on labor and the other more Catholic, based on trade, the difference in Merkel's and Sarkozy's positions today.

And I think woman are far more status-conscious than men, and probably, in the end, behind enterprises of this sort, as they are more "Catholic" in their religion. I would not, in other words, confuse male jealousy with female envy.