Roast Beef and Leftover Turkey: Michael Lewis' "The End"

WINDSOR LOCKS, Connecticut -- In the December issue of Portfolio, Michael Lewis chronicles the Wall Street collapse and ensuing global financial crisis, tracing its roots back to the financial innovations - and excesses - of the 1980's.

The article opens with some reflections on his brief career at Salomon Brothers 20 years ago, an experience he described in his book Liar's Poker:

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.

In an earlier post, we discussed how this may have, in fact, come to pass as the big downtown firms gut their staffs. Hopefully, the chaff has been discarded, and the truly talented remain, though the reckoning came several decades too late, and at far too high a cost. Let's hope, for the sake of us all, that an Ivy League diploma and a letter in varsity lacrosse are no longer the most important qualifications for a six-figure salary on Wall Street.

Here's another tip, courtesy of my father: never invest your money with a publicly-traded investment firm. People are far less likely to screw around when their own money is on the line. And former Salomon Brothers CEO John Gutfreund - the man that took his firm public, a move that was soon followed by most of the big investment banks - basically admits that they started screwing around. "When things go wrong, it’s [the shareholders'] problem."

No, John, you dumb shit. It's everybody's problem now.