Wednesday, August 10, 2011
It's Europe, stupid, Part II
Michael Lewis has another well-timed must-read article on our economic mess, this time focusing on Germany and its strange obsession with messes of the non-economic kind. … Economically, one of the sadder parts of the story is how Americans on Wall Street viewed Germans as saps and knowingly fleeced them. Lewis talked to a former German banker:
Michael Lewis has another well-timed must-read article on our economic mess, this time focusing on Germany and its strange obsession with messes of the non-economic kind. … Economically, one of the sadder parts of the story is how Americans on Wall Street viewed Germans as saps and knowingly fleeced them. Lewis talked to a former German banker:
At bottom, he says, the Germans were blind to the possibility that the Americans were playing the game by something other than the 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.I'm not feeling too sorry for the Germans. They were getting greedy too. But they definitely trusted those AAA ratings on mortgage securities, while the Wall Street peddlers of the bonds knew full well they were crap. ... There used to be a time when a lot of Europeans, especially Germans, admired the U.S. financial system's stability, credibility and relative transparency. That view is long gone.
