Time to get curious
“The important thing is not to stop questioning. Curiosity has it’s own reason for existing.” That’s one of my favourite quotes, attributed to Albert Einstein. Curiosity may be one of the most underestimated of all human virtues. Trying to live up to it, I dug up a couple of books I read years ago to help understand this current financial Armageddon.
The first book was Den of Thieves by James B. Stewart, published in 1991. This superbly researched and written book shows, as the inside cover says, how “Michael Milken, Ivan Boesky, Martin Siegel and Dennis Levin created a series of security scams that made other financial hustles look like amateur night.” What this latest financial collapse shows is that these four guys were amateurs themselves, compared to all those financial geniuses that brought about this latest bout of misery. The most prescient and scary part of the book is the Epilogue. “Could this happen again?” asks Mr. Stewart. “If nothing else, the scandals of the 1980s underscore the importance of the security laws and their vigorous enforcement.” The part that really caught my attention was Mr. Boesky’s sentence. He served two years of his of his three-year term. I think Mr. Stewart answered his own question – there is a next-to-nothing price to pay for stealing other people’s money on Wall Street.
The second book was Liar’s Poker (1989) by Michael Lewis. Please ponder the following quote on page 65: “…the mortgage traders were the firm’s Biggest Swinging Dicks. The mortgage department was the most profitable area of the firm…” Mr. Lewis also went back to his surreal prior Wall Street experience in two recent articles: “The End” in Portfolio.com (Dec. 2008) and “The End of the Financial World as We Know It” in The New York Times (Jan. 3, 2009).
Those two books made me think that we’re not curious enough. They also confirmed Friedrich Hegel’s wise but sad saying: “The only thing we learn from history is that we learn nothing from history.” Hegel, according to an entry on Wikipedia was one of the creators of German idealism. I wonder if he came up with this quote before or after he partook in its creation?
