Working together as a team we have already suppressed debate on many dangerous ideas: that those of us deemed too big to fail are too big and should be broken up, for instance, or that credit default swaps and collateralized debt obligations and other financial inventions should simply be banned. We are now at leisure to address the few remaining threats to our way of life. To wit:
1. Washington will attempt to limit our ability to exploit the idiocy of institutional investors a k a our “customers.” The Senate appears intent on forcing our most lucrative derivatives business onto open exchanges, where investors can, for the first time, observe the prices we give them. This measure — which I’ve come to call the “Making the World Safe for Germans With Money Act” — will prove difficult to defeat. Our public strategy here, as elsewhere, must be to complicate the issue. To the mere mention of open, public exchanges for derivatives, you should always respond, “That will destroy liquidity in these fragile and complex markets.” Most people don’t even know what “liquidity” means, or what causes it or why they actually need to have more rather than less of it — or what, even, the point is of a market that requires privacy to operate. They will assume that you must understand it better than they do. For that reason alone it is useful.
(..) The other point you should make to our elected officials (privately, please) is that our profits function as a fixed point in an uncertain universe. If they curtail our ability to shaft German investors in one way, we will simply find some other way to do it.
Michael Lewis ("The Big Short", "Liar's Poker") @NYT
http://graphics8.nytimes.com/images/2010/05/30/opinion/30lewis_opart2/30lewis_opart2-thumbWide.jpg
Letter: Shorting Reform
Shorting Reform (webpage)
(via Maoxian, post Sophisticated Suckers)
Bearbeitet von jjooey