“Investing” in AIG, et. al.: understand the scandal

I haven’t posted here due to a lack of time, but what we are wit­ness­ing is no short of the most abject scan­dal run by the col­lu­sive polit­i­cal and finan­cial sides of Amer­i­can elite. Oh, and incom­pe­tence is a hall­mark too.

Here are a few must-read if you want to fol­low what’s going on, but be warned, this will ele­vate your blood pres­sure quite drastically:

Andrew Lahde, recently famous hedgie, closed its fund with a 866% return. Here’s an extract from his last let­ter to investors:

The low hang­ing fruit, i.e. idiots whose par­ents paid for prep school, Yale, and then the Har­vard MBA, was there for the tak­ing. These peo­ple who were (often) truly not wor­thy of the edu­ca­tion they received (or sup­pos­edly received) rose to the top of com­pa­nies such as AIG, Bear Stearns and Lehman Broth­ers and all lev­els of our gov­ern­ment. All of this behav­ior sup­port­ing the Aris­toc­racy, only ended up mak­ing it eas­ier for me to find peo­ple stu­pid enough to take the other side of my trades. God bless America.

Go read the Epi­cu­rian Dealmaker’s pov. An insider take on what’s hap­pen­ing here. Extract of the finesse piece:

With both Con­gress and the New York Attor­ney General’s office crawl­ing up the asses of major Wall Street firms with flash­lights, Roto-rooters, and cat­tle prods look­ing for juicy lit­tle sound bites on exces­sive com­pen­sa­tion for the Sen­ate floor and the nightly news, it will be a long time indeed before invest­ment bankers regain con­trol of their com­pen­sa­tion processes. If ever.

But some­thing much more seri­ous is at stake here. Here’s Barry on the $140B handed out ille­gally by the Trea­sury to banks under the form of tax breaks. Steve Randy Wald­man fol­lows suit:

But, today I am white-hot mad over AIG, and I need to vent. Yves Smith has done a beau­ti­ful job of describ­ing the ridicu­lous awful­ness of today’s “restructuring”. More impor­tantly, she uses words with the appro­pri­ate inten­sity and valence: “banana repub­lic”, “looting”, “Mussolini-Style Corporatism”.

Barry closes the loop today with this post. Are we wit­ness­ing the end of Wall Street as we know it, as Michael Lewis sug­gests? I still doubt it, but I would be happy to be wrong.

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