More sugar!

“A color-coded map of American personal indebtedness could be laid on top of the Centers for Disease Control’s color-coded map that illustrates the fantastic rise in rates of obesity across the United States since 1985 without disturbing the general pattern.  The boom in trading activity in individual stock portfolios; the spread of legalized gambling; the rise of drug and alcohol addiction; it is all of a piece.  Everywhere you turn you see Americans sacrifice their long-term interests for a short-term reward.” – Michael Lewis, Boomerang

We export this stuff, too

“It isn’t a problem with government; it’s a problem with the entire society.  It’s what happened on Wall Street in the run-up to the subprime crisis.  It’s a problem of people taking what they can, just because they can, without regard to the larger social consequences.  It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans.  Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom.  They’d been conditioned to grab as much as they could, without thinking about the long-term consequences.” – Michael Lewis, Boomerang

It’s also known as “hallucinating”

“When you borrow a lot of money to create a false prosperity, you import the future into the present.  It isn’t the actual future so much as some grotesque silicone version of it.  Leverage buys you a glimpse of a prosperity you haven’t really earned.” — Michael Lewis, Boomerang

This has not changed (would you like to buy some Facebook shares?)

“One of the hidden causes of the current global financial crisis is that the people who saw it coming had more to gain from it by taking short positions than they did by trying to publicize the problem.” — Michael Lewis, Boomerang

Crispy critters

“There’s a difference between an old-fashioned financial panic and what had happened on Wall Street in 2008.  In an old-fashioned panic, perception creates its own reality: Someone shouts ‘Fire!’ in a crowded theater and the audience crushes each other to death in its rush for the exits.  On Wall Street in 2008 the reality finally overwhelmed perceptions: A crowded theater burned down with a lot of people still in their seats.  Every major firm on Wall Street was either bankrupt or fatally intertwined with a bankrupt system.” — Michael Lewis, The Big Short

Something for nothing

“With stagnant wages and booming consumption, the cash-strapped American masses had a virtually unlimited demand for loans but an uncertain ability to repay them.  All they had going for them, from the point of view of Wall Street financial engineers, was that their financial fates could be misconstrued as uncorrelated.  By assuming that one pile of subprime mortgage loans wasn’t exposed to the same forces as another–that a subprime mortgage bond with loans heavily concentrated in Florida wasn’t very much like a subprime mortgage bond more concentrated in California–the engineers created the illusion of security.” — Michael Lewis, The Big Short

Clarity

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.” — Tolstoy (from The Big Short, by Michael Lewis)

Roll them bones

“The line between gambling and investing is artificial and thin.  The soundest investment has the defining trait of a bet (you losing all your money in hopes of making a bit more), and the wildest speculation has the salient characteristic of an investment (you might get your money back with interest).  Maybe the best definition of ‘investment’ is ‘gambling with the odds in your favor.'” — Michael Lewis, The Big Short

Just lay back and enjoy it

“The upper classes of this country raped this country.  You fucked people.  You built a castle to rip people off.  Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience.  Nobody ever said, ‘This is wrong.'” — Steve Eisman (from The Big Short, by Michael Lewis)

Separate but equally clueless

“There are actually people who do nothing but invest in European mid-cap health care debt.  I don’t think the problem is specific to finance.  I think that parochialism is common to modern intellectual life.  There is no attempt to integrate.” — Charlie Ledley (from The Big Short, by Michael Lewis)