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Sleaze on Wall Street

I was struck reading Michael Lewis’ book Boomerang about how sleazy Wall Street salesmen are.  Basically they are worse than used car salesmen, but are selling stuff worth billions.  Lewis says one of the main problems the Germans ran into during the 2008 economic crisis was that they believed the salesmen.  He says reports a conversation with Dirk Rothig, a German banker, talking about the German Landesbanks:

“The people in these banks were never spoiled by any Wall Street salesmen.  Now there is someone with a platinum American Express credit card who can take them to the Grand Prix in Monaco….  He has no limit….  All of a sudden a very smart guy from Merrill Lynch shows up and starts to pay a lot of attention to you.  They thought, ‘Oh he just like me!'”

At bottom, he [Rothig]  says, the Germans were blind to the possibility that the Americans were playing the game by something other than official rules.  The Germans took the rules at their face value; they looked into the history of triple-A-rated bonds and accepted the official story that triple-A-rated bonds were completely risk-free. 

It’s a shame that America has become such a corrupt country, while the Germans seemed to have maintained their moral standards.  Perhaps their terrible failings during World War II have made them more moral today, while our relatively easy course through WW II made us less concerned about our morals.  In particular Wall Street appears to have become a snake pit that has attracted some of the lowest types of humanity. 


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