Infectious Greed: How Deceit and Risk Corrupted the Financial Markets
3.5/5
()
Unavailable in your country
Unavailable in your country
About this ebook
Frank Partnoy
Frank Partnoy was a trader at Morgan Stanley before turning from gamekeeper to poacher and becoming professor of law and finance at the University of San Diego. He is one of the world's leading experts on the complexities of modern finance and financial market regulation and writes regularly for the Financial Times. He is the author ofF.I.A.S.C.O. [9781846682384], The Match King [9781861979384] and Infectious Greed [9781846682933].
Related to Infectious Greed
Related ebooks
Investor's Guide to Loss Recovery: Rights, Mediation, Arbitration, and other Strategies Rating: 0 out of 5 stars0 ratingsThe Capitalist's Bible: The Essential Guide to Free Markets--and Why They Matter to You Rating: 0 out of 5 stars0 ratingsDumb Money: How Our Greatest Financial Minds Bankrupted the Nation Rating: 3 out of 5 stars3/5The Shadow Market: How a Group of Wealthy Nations and Powerful Investors Secretly Dominate the World Rating: 4 out of 5 stars4/5The No-Nonsense Guide to Global Finance Rating: 0 out of 5 stars0 ratingsThe Speculation Economy: How Finance Triumphed Over Industry Rating: 0 out of 5 stars0 ratingsForeclosed: High-Risk Lending, Deregulation, and the Undermining of America's Mortgage Market Rating: 4 out of 5 stars4/5The Capitalists of the 21st Century: An Easy-to-Understand Outline on the Rise of the New Financial Players Rating: 0 out of 5 stars0 ratingsForbes Guide to the Markets: Becoming a Savvy Investor Rating: 4 out of 5 stars4/5Investing in the Renewable Power Market: How to Profit from Energy Transformation Rating: 0 out of 5 stars0 ratingsPlatform for Wealth Rating: 5 out of 5 stars5/5Banker to the World: Leadership Lessons From the Front Lines of Global Finance Rating: 3 out of 5 stars3/5Regulation A+ and Other Alternatives to a Traditional IPO: Financing Your Growth Business Following the JOBS Act Rating: 0 out of 5 stars0 ratingsHow to be a Successful Financial Market Speculator Rating: 0 out of 5 stars0 ratingsFields of Gold: Financing the Global Land Rush Rating: 0 out of 5 stars0 ratingsThe Road Ahead for the Fed Rating: 5 out of 5 stars5/5Ruling Capital: Emerging Markets and the Reregulation of Cross-Border Finance Rating: 4 out of 5 stars4/5Optimal Money Flow: A New Vision of How a Dynamic-Growth Economy Can Work for Everyone Rating: 0 out of 5 stars0 ratingsFollow the Money: Fed Largesse, Inflation, and Moon Shots in Financial Markets Rating: 0 out of 5 stars0 ratingsBlackRock's Guide to Fixed-Income Risk Management Rating: 0 out of 5 stars0 ratingsManaging Extreme Financial Risk: Strategies and Tactics for Going Concerns Rating: 0 out of 5 stars0 ratingsNew Frontiers of Sovereign Investment Rating: 0 out of 5 stars0 ratingsInternational Corporate Governance After Sarbanes-Oxley Rating: 0 out of 5 stars0 ratingsLessons from the Financial Crisis: Causes, Consequences, and Our Economic Future Rating: 0 out of 5 stars0 ratingsBankers and Bolsheviks: International Finance and the Russian Revolution Rating: 0 out of 5 stars0 ratingsManaging Global Financial and Foreign Exchange Rate Risk Rating: 0 out of 5 stars0 ratingsFinancing Failure: A Century of Bailouts Rating: 5 out of 5 stars5/5Dark Pools: Off-Exchange Liquidity in an Era of High Frequency, Program, and Algorithmic Trading Rating: 0 out of 5 stars0 ratingsThe Basics of Foreign Exchange Markets: A Monetary Systems Approach Rating: 0 out of 5 stars0 ratings
Business For You
The Richest Man in Babylon: The most inspiring book on wealth ever written Rating: 5 out of 5 stars5/5Crucial Conversations Tools for Talking When Stakes Are High, Second Edition Rating: 4 out of 5 stars4/5Law of Connection: Lesson 10 from The 21 Irrefutable Laws of Leadership Rating: 4 out of 5 stars4/5Becoming Bulletproof: Protect Yourself, Read People, Influence Situations, and Live Fearlessly Rating: 4 out of 5 stars4/5Lying Rating: 4 out of 5 stars4/5Nickel and Dimed: On (Not) Getting By in America Rating: 4 out of 5 stars4/5Crucial Conversations: Tools for Talking When Stakes are High, Third Edition Rating: 4 out of 5 stars4/5Leadership and Self-Deception: Getting out of the Box Rating: 4 out of 5 stars4/5Summary of J.L. Collins's The Simple Path to Wealth Rating: 5 out of 5 stars5/5The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers Rating: 4 out of 5 stars4/5Just Listen: Discover the Secret to Getting Through to Absolutely Anyone Rating: 4 out of 5 stars4/5Collaborating with the Enemy: How to Work with People You Don’t Agree with or Like or Trust Rating: 4 out of 5 stars4/5Company Rules: Or Everything I Know About Business I Learned from the CIA Rating: 4 out of 5 stars4/5Set for Life: An All-Out Approach to Early Financial Freedom Rating: 4 out of 5 stars4/5Robert's Rules Of Order Rating: 5 out of 5 stars5/5The Everything Guide To Being A Paralegal: Winning Secrets to a Successful Career! Rating: 5 out of 5 stars5/5The Five Dysfunctions of a Team: A Leadership Fable, 20th Anniversary Edition Rating: 4 out of 5 stars4/5Your Next Five Moves: Master the Art of Business Strategy Rating: 5 out of 5 stars5/5The Intelligent Investor, Rev. Ed: The Definitive Book on Value Investing Rating: 4 out of 5 stars4/5Tools Of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers Rating: 4 out of 5 stars4/5Capitalism and Freedom Rating: 4 out of 5 stars4/5Confessions of an Economic Hit Man, 3rd Edition Rating: 5 out of 5 stars5/5Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice Rating: 4 out of 5 stars4/5How to Get Ideas Rating: 5 out of 5 stars5/5Limited Liability Companies For Dummies Rating: 5 out of 5 stars5/5The Book of Beautiful Questions: The Powerful Questions That Will Help You Decide, Create, Connect, and Lead Rating: 4 out of 5 stars4/5Thank You for Being Late: An Optimist's Guide to Thriving in the Age of Accelerations Rating: 4 out of 5 stars4/5
Reviews for Infectious Greed
15 ratings1 review
- Rating: 2 out of 5 stars2/5Frank Partnoy, author of this book and the very silly 'FIASCO: Blood in the Water on Wall Street', implies an illustrious career structuring and selling complex derivatives. In actual fact he worked on Wall Street for just two years in total, straight out of college. Instead of succeeding by staying the course, Partnoy made his millions by violating the Wall Street code of omerta and knocking out a sensationalist, mostly ignorant, account of the year or so he spent at Morgan Stanley. Infectious Greed is the follow-up, which purports to document the wreckage across the market since. Having read FIASCO, which was valuable mostly for its unintended humour, I didn't expect much of Infectious Greed; I was rather looking forward to slating it, to be honest. It has the same air of maiden-aunt prurience as FIASCO but, almost despite himself, Partnoy's conclusions here aren't especially objectionable, and mostly undermine the tone of studied outrage he cultivates throughout the early part of the book. The thesis of the book is that the financial markets have, of late, been corrupted by deceit and risk (hang on a minute: financial markets are *about* risk. Is it meaningful to say they can they be corrupted by it?). Yet at least half the book recounts events which took place ten or more years ago, in the primordial soup of the derivatives market. If a week is a long time in politics, a decade is an aeon on Wall Street: in 2004, the exploits of Bankers Trust and CS First Boston in 1993 aren't exactly current. The nascent derivatives market is now a mature trillion dollar industry. I dare say Professor Partnoy wouldn't recognise it. Partnoy's explanations of the transactions are, however, lucid: so much so that they undo his conclusions. At one point he describes in two paragraphs the 'whipsaw' risk of an 'Inverse IO' instrument. It's a very clear explanation, which completely undermines his concluding observation that 'it was unclear whether any mutual-fund mangers [the investors] understood all of this'. Here's the thing: to put not too fine a point on it, a professional fund manager who doesn't understand what can be lucidly explained in eight sentences, yet still invests in it, should be shot. So should his employer. And neither deserves the respect (for which, read, money) of the public. It might seem a harsh lesson, but it wouldn't take too many collapses to shake the mums and dads in Ohio out of their complacent stupor and shift their funds to a manager who was prepared to employ qualified managers and supervise them properly. The market has a way of teaching people valuable lessons that market regulation and government bail-outs really don't. The funny thing is, Partnoy does continually stumble over this axiom, but doesn't recognise it. He quotes a Peat Marwick partner who derides ignorant fund managers thus: 'if you don't understand, you might as well place it all on red at Atlantic City or Las Vegas, because at least there you get free drinks.' Though Partnoy doesn't think so, the analogy is a good one: the very monied nature of Wall Street is the most graphic illustration of the fact that, unless you really know your onions, you are NOT going to end up a winner. The house is; which is why most of them can afford to pay their 20,000+ employees salaries which average out at half a million dollars each (it's all in the annual report - do the sums!). Like Casinos, Wall Street trading desks have a motive ulterior to realising some poor schmuck's American dream: the object is to make, not lose, money, and this is exactly what they do and a statistically constant basis. Partnoy repeatedly calls for regulation of the derivatives market without ever making a case for how this might be done or how it would prevent the losses he documents in the book: criminal statutes don't stop people committing murder, after all. All the regulation in the world won't stop fraudsters (if they're committing fraud, then by definition the regulations are already there, and they're breaking them). On the other hand, exploring the idiosyncrasies of rules *without* breaking them is the prerogative of every citizen, not just Wall Street banks. After all, regulatory arbitrage is only possible because of prescribed regulatory rules tend not to precisely reflect economic reality. If rules have irrational boundaries, then it is economically rational to exploit them. Eventually, Partnoy acknowledges this. He cannot ultimately muster much venom for the perpetrators of the Enron debacle, and by the epilogue, where he sets out his recommendations (full marks to him for putting his money where is mouth is, by the way: it's one thing to criticise; quite another to suggest a solution) his proposals don't include regulation of the wholesale derivatives market ("some derivatives markets might appropriately have been left unregulated" he concedes) but simply equivalent accounting treatment with comparable financial instruments, and most of his fire is reserved not for Wall Street traders or greedy executives, but the credit rating agencies which operate under the umbrella of a government-sponsored oligopoly (only Moody's, Fitch and S&P are recognised for regulatory purposes). And you'll never guess what his solution is for dealing with the rating agencies: Without a hint of irony, he suggests they be deregulated! By the final sentence of the book, it seems the most elementary elements of market theory may have finally slipped through: Partnoy asks his readers whether they have taken any prudent steps to properly evaluate their investments before putting up any money: 'If you answered 'no,' you have one more person to blame in addition to the accountants, bankers, lawyers, credit raters, corporate executives, directors and regulators who failed to spot the various financial schemes of recent years. You.' Not, in the final analysis, quite the damning indictment it cracked up to be, then.