Greed, Greed, and More Greed

In trying to understand this world financial crisis, I'm paying more attention to financial reporting than ever before. I am reminded of Bethany McLean's statement on The Daily Show a few weeks ago. It went something like this: If you don't understand how it's making money, it probably isn't.

That's the way I feel about money generally.

Although in reading The Ascent of Money by Niall Ferguson, (you can watch the entire two-hour documentary on pbs.org for free) I did learn today that one makes money in the bond markets not by buying bonds at face value and holding onto them, waiting for the corporation to pay the stated amount of interest.

No, one makes money in the bond market by buying bonds at depressed prices, below the face value of the bond, which still pays the stated interest.

That was news to me.

This evening, before chancing upon the Chris Botti Concert on Thirteen, featuring Yo Yo Ma, John Mayer, Sting, and Josh Groban, I read Bethany McLean's piece in this month's Vanity Fair. It's called: Over the Hedge.

Wouldn't you read an article that starts off this way? It used to be that to become a billionaire, rather than a mere millionaire, you had to inherit money, or build an empire that would last for a long, long time. But in the era that has just ended, you could become a billionaire just by managing other people’s money. You didn’t have to do so for very long—and, maybe, you didn’t even have to do so very well.

She was smart enough to unravel Enron. She's unraveling the collapse of Wall Street in very accessible ways. Although the question remains whether we can be rescued from Wall Street's greed.