Gordon Gekko

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pages: 267 words: 70,250

Defending the Free Market: The Moral Case for a Free Economy by Robert A. Sirico

Affordable Care Act / Obamacare, barriers to entry, Berlin Wall, corporate governance, creative destruction, delayed gratification, Fall of the Berlin Wall, George Gilder, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, informal economy, Internet Archive, liberation theology, means of production, moral hazard, obamacare, On the Revolutions of the Heavenly Spheres, profit motive, road to serfdom, zero-sum game

Michelin’s instinctual reply was to lament the crisis. He said that any time an industry fails in protecting its customers it injures trust in the whole industry—a negative outcome for everyone involved. This snapshot of Francois Michelin does not, of course, disprove the existence of unprincipled Gordon Gekkos in the world of high finance and enterprise. But there is nothing in business or the market economy that mandates a selfish dog-eat-dog ethic. The Apostle of Selfishness We began this chapter with Gordon Gekko announcing that greed is good. As he goes on to say to the shareholders of the fictional Teldar Paper Corporation, “Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms—greed for life, for money, for love, knowledge—has marked the upward surge of mankind.

Start a Business Jobs: The Best Anti-Poverty Program The Fallacy of the Fixed Pie Foreign Aid That Doesn’t The Moral Appeal of Good Work A Theology of Enterprise Suggestions for Further Reading CHAPTER 4 - Why the “Creative Destruction” of Capitalism Is More Creative than Destructive Creative Destruction, Creative Flourishing Globalization, Christianity, and Culture Globalization and Coercive Destruction Globalization and Culture Suggestions for Further Reading CHAPTER 5 - Why Greed Is Not Good–and Why You Can Get More of It with Socialism ... What Is Greed? The Role of Profits Excess Profits? Moral Profits Beyond Gordon Gekko The Apostle of Selfishness The Socialist Mirage The Personable Person and the Market Suggestions for Further Reading CHAPTER 6 - The Idol of Equality The Value of the 1 Percent Mind the Floor, Not the Ceiling Do We Know Who We Are? Equal Respect, Not Equal Conditions Social Justice and the Common Good Suggestions for Further Reading CHAPTER 7 - Why Smart Charity Works–and Welfare Doesn’t Desiccated Compassion Government Isn’t the Only Institution Desiccated Christianity The Mayor of My Neighborhood The Fatal Welfare Conceit The Samaritan Suggestions for Further Reading CHAPTER 8 - The Health of Nations: Why State-Sponsored Health Care Is Not Compassionate Fighting a Fire with Gasoline Price, Profit, and Cost Let Them Compete Big Brother, Big Burden The Secret to Slashing Costs The Right to Health Care Understood Aright The Religious History of Health Care Suggestions for Further Reading CHAPTER 9 - Caring for the Environment Doesn’t Have to Mean Big Government Christianity Caricatured Environmentalism as an Extension of Marxism Humanophobia Beware the Zero-Sum Fallacy and Unintended Consequences Suggestions for Further Reading CHAPTER 10 - A Theology for Economic Man Vocation–Calling The Dead Suggestions for Further Reading Afterword Acknowledgments Notes Index Copyright Page PRAISE FOR DEFENDING THE FREE MARKET “I’ve been eagerly anticipating such a book from Father Sirico for a long time.

The greedy man under socialism can’t get rich by starting and nurturing a socially useful business. All he can do is become a thief or a cream-skimming government insider. Under capitalism, he has another option: he can excel in a socially useful business. In this way, capitalism provides the greedy person a socially beneficent alternative to exploitation. Remember villainous business executive Gordon Gekko in Oliver Stone’s 1987 film Wall Street? “Greed is good,” he claimed. Unfortunately, many real-life defenders of capitalism argue along the same lines. Greed, they claim, is the stimulant that drives the economy. And critics of the free market readily agree—they hate capitalism because they believe it fosters greed. I say a plague on both their houses. Greed isn’t good, and it isn’t the essence of capitalism.


pages: 831 words: 98,409

SUPERHUBS: How the Financial Elite and Their Networks Rule Our World by Sandra Navidi

activist fund / activist shareholder / activist investor, assortative mating, bank run, barriers to entry, Bernie Sanders, Black Swan, Blythe Masters, Bretton Woods, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, commoditize, conceptual framework, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, diversification, East Village, Elon Musk, eurozone crisis, family office, financial repression, Gini coefficient, glass ceiling, Goldman Sachs: Vampire Squid, Google bus, Gordon Gekko, haute cuisine, high net worth, hindsight bias, income inequality, index fund, intangible asset, Jaron Lanier, John Meriwether, Kenneth Arrow, Kenneth Rogoff, knowledge economy, London Whale, Long Term Capital Management, longitudinal study, Mark Zuckerberg, mass immigration, McMansion, mittelstand, money market fund, Myron Scholes, NetJets, Network effects, offshore financial centre, old-boy network, Parag Khanna, Paul Samuelson, peer-to-peer, performance metric, Peter Thiel, plutocrats, Plutocrats, Ponzi scheme, quantitative easing, Renaissance Technologies, rent-seeking, reserve currency, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, rolodex, Satyajit Das, shareholder value, Silicon Valley, social intelligence, sovereign wealth fund, Stephen Hawking, Steve Jobs, The Future of Employment, The Predators' Ball, The Rise and Fall of American Growth, too big to fail, women in the workforce, young professional

His folksy, backslapping, high-fiving demeanor is not everyone’s cup of tea, but those who dismiss him grossly underestimate his intelligence and strategic prowess. Scaramucci is a talented schmoozer with a knack for self-promotion, yet his consistent energy makes it all seem authentic. He cleverly product-placed a large SkyBridge banner in Oliver Stone’s Wall Street II, and even landed a cameo. He further enhanced his profile with his well-received book, Goodbye Gordon Gekko, which was a timely self-critical reflection on Wall Street’s culture of greed. His rise has been extraordinary, and Davos has played no small part in it. While many of Scaramucci’s most valuable contacts stem from the WEF, he has since spread his wings far beyond the WEF and built his own wildly successful forum, the SkyBridge Alternatives Conference (SALT). Within only a couple of years, SALT has become the premier hedge fund gathering in the world.

Brainiacs, doctors, researchers, and billionaire donors, connected by common cause, chatted animatedly. Milken was in his element, holding court and chatting with the guests. I had a fabulous time and could not help but think that this was exactly how I had imagined this parallel universe to be when reading about it so many years earlier, half the world away. The tale of junk bond king Mike Milken is one of triumph, tragedy, redemption, and comeback. In the Gordon Gekko-ish 1980s, this ingenious financier revolutionized the financial system by opening up capital markets to companies which had previously not been considered creditworthy. He created a market and channeled billions of dollars into companies by issuing high-yield bonds, also dubbed junk bonds. So great was the boom he created that at some point it exceeded the financing of investment-grade companies.

According to estimates, about 8 percent of global wealth, or $7.5 trillion, is squirreled away in tax havens, $6 trillion of which has not been taxed.16 This hidden wealth distorts the picture of inequality, which if factored in would likely be even greater.17 Approaching the Tipping Point The situation is so egregious that even members of the establishment have begun going rogue. “Class traitors” such as George Soros, Nick Hanauer, and Paul Tudor Jones have warned of the potentially dramatic consequences of inequality and suggested measures to reduce it. Even Asher Edelman, the real-life Gordon Gekko on whom the movie Wall Street’s ruthlessly greedy protagonist was partly modeled, has turned dissident, arguing for the self-proclaimed democratic socialist Bernie Sanders as the best option for the U.S. economy.18 The economic discontent has led to unprecedented political polarization, pitting the “have-nots” against the “haves,” the proletariat against the intellectual elite, and the young against the old.


pages: 733 words: 179,391

Adaptive Markets: Financial Evolution at the Speed of Thought by Andrew W. Lo

"Robert Solow", Albert Einstein, Alfred Russel Wallace, algorithmic trading, Andrei Shleifer, Arthur Eddington, Asian financial crisis, asset allocation, asset-backed security, backtesting, bank run, barriers to entry, Berlin Wall, Bernie Madoff, bitcoin, Bonfire of the Vanities, bonus culture, break the buck, Brownian motion, business cycle, business process, butterfly effect, buy and hold, capital asset pricing model, Captain Sullenberger Hudson, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Daniel Kahneman / Amos Tversky, delayed gratification, Diane Coyle, diversification, diversified portfolio, double helix, easy for humans, difficult for computers, Ernest Rutherford, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, Fractional reserve banking, framing effect, Gordon Gekko, greed is good, Hans Rosling, Henri Poincaré, high net worth, housing crisis, incomplete markets, index fund, interest rate derivative, invention of the telegraph, Isaac Newton, James Watt: steam engine, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, Louis Pasteur, mandelbrot fractal, margin call, Mark Zuckerberg, market fundamentalism, martingale, merger arbitrage, meta analysis, meta-analysis, Milgram experiment, money market fund, moral hazard, Myron Scholes, Nick Leeson, old-boy network, out of africa, p-value, paper trading, passive investing, Paul Lévy, Paul Samuelson, Ponzi scheme, predatory finance, prediction markets, price discovery process, profit maximization, profit motive, quantitative hedge fund, quantitative trading / quantitative finance, RAND corporation, random walk, randomized controlled trial, Renaissance Technologies, Richard Feynman, Richard Feynman: Challenger O-ring, risk tolerance, Robert Shiller, Robert Shiller, Sam Peltzman, Shai Danziger, short selling, sovereign wealth fund, Stanford marshmallow experiment, Stanford prison experiment, statistical arbitrage, Steven Pinker, stochastic process, stocks for the long run, survivorship bias, Thales and the olive presses, The Great Moderation, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Triangle Shirtwaist Factory, ultimatum game, Upton Sinclair, US Airways Flight 1549, Walter Mischel, Watson beat the top human players on Jeopardy!, WikiLeaks, Yogi Berra, zero-sum game

Finance Behaving Badly • 345 If we can adapt something as prone to failure and fraud as a Ponzi scheme to serve a useful purpose, can we turn the fi nancial system into something that not only does well for investors, but also does good for society as a whole? Can we adapt fi nance to fit our concepts of fairness? FINANCE AND THE GORDON GEKKO EFFECT Part of the challenge in thinking about fairness in finance is culture. We don’t usually ask whether a market transaction is fair or not—as long as two mutually consenting adults agree to an exchange, that seems fair enough. But the culture of Homo economicus can sometimes be taken to the extreme, as reflected by one of the most famous lines in movie history: “Greed is good.” In fact, this is a slight adaptation of Michael Douglas’s actual line in the 1987 movie Wall Street, in which Douglas plays the sleazy yet charismatic fi nancier Gordon Gekko. “The point is, ladies and gentleman, that greed, for lack of a better word, is good.” Douglas’s performance is riveting and one might wish that typical corporate meetings were as dramatic.

The Adaptive Markets Hypothesis Explains (Ab)Normal Accidents Liquidity Withdrawal Symptoms 222 222 224 225 227 231 235 236 240 244 246 249 249 254 256 258 263 265 267 271 277 282 283 284 289 292 296 296 298 301 303 306 312 314 318 320 324 x • Contents Chapter 10. Finance Behaving Badly Finance Rules Out-Ponzi-ing Ponzi The Ultimatum Game A Neuroscience of Morality? Is Finance Fair? Finance and the Gordon Gekko Effect Regulatory Culture Environment Strikes Again Moore’s Law versus Murphy’s Law The Tyranny of Complexity Chapter 11. Fixing Finance An Ounce of Prevention Ecosystem Management Adaptive Regulation Law Is Code Mapping Financial Networks The CSI of Crises Privacy with Transparency Anti-Gekko Therapies Chapter 12. To Boldly Go Where No Financier Has Gone Before Star Trek Finance “Computer, manage my portfolio!”

From the perspective of the Adaptive Markets Hypothesis, this means that culture is also subject to evolution, to the same processes of variation, selection, and replication as a biological species or a mental narrative. 346 • Chapter 10 In fact, we can think of culture as a very large bundle of interrelated narratives, transmitted through the generations, and changing with the human environment. The character of Gordon Gekko, despite being the villain of Oliver Stone’s morality play, possesses traits that our culture perceives as important. Gekko is wealthy, highly skilled, physically attractive, and powerful. Someone who aspires to these traits may try to mimic Gekko’s behaviors, as apparently many did in real life, as the Bud Fox character, the nominal hero of Wall Street, does in the movie. By some trick of the filmmaker’s art, we can almost sense Gekko’s presence through the screen.


pages: 257 words: 71,686

Swimming With Sharks: My Journey into the World of the Bankers by Joris Luyendijk

activist fund / activist shareholder / activist investor, bank run, barriers to entry, Bonfire of the Vanities, bonus culture, collapse of Lehman Brothers, collective bargaining, corporate raider, credit crunch, Credit Default Swap, Emanuel Derman, financial deregulation, financial independence, Flash crash, glass ceiling, Gordon Gekko, high net worth, hiring and firing, information asymmetry, inventory management, job-hopping, light touch regulation, London Whale, Nick Leeson, offshore financial centre, regulatory arbitrage, Satyajit Das, selection bias, shareholder value, sovereign wealth fund, the payments system, too big to fail

The general ignorance about the current threat posed by the financial system came across very clearly every time anyone asked me at parties, over dinner or at the school gates what had surprised me most about ‘those bankers’. The question often came with a cynical laugh as if nothing genuinely serious was at stake; they seemed to anticipate my answer would be ‘greed’, ‘cocaine’ or ‘arrogance’. Many referred to the Gordon Gekko character from the iconic 1987 film Wall Street and his famous quote: ‘Greed, for want of a better word, is good.’ I would resist pointing out that Gordon Gekko was not a banker but a ‘corporate raider’ or ‘activist shareholder’ taking over companies against their will, and instead I’d tell them how some of the things I’d learnt about bankers had ‘lightning-bolted me off my horse’, as the Flemish expression goes. I had had no idea just how much damage the financial sector can do to society let alone how terrifyingly close to the brink we were in 2008.

I feel there’s a particular kind of insecurity to many bankers, a form of neediness and a deep desire to compensate for something. The absence of love, perhaps?’ Many people in banking try to project an image of perfection, he had found. ‘Banks play to that, trying to make you look perfect and feel invulnerable. It’s very easy to get hooked into that life, to become addicted to work and the money. I am sure it would have happened to me, had I done this for too long.’ When doing research for the Gordon Gekko character in the famous film Wall Street, scriptwriter Stanley Weiser spoke to a great number of top financial workers. In an interview on the DVD Weiser echoes the idea of finance as an existential trap for those with addictive personalities: ‘The Gekkos of the world are people who have a complete inability to process the reality of … of death. It’s the game, the energy, the momentum of continuing to play the game …’ The first few times I heard about delusional bankers I thought, well, that’s too bad but every profession must have vulnerable people who develop an unhealthy addiction to their jobs.


pages: 430 words: 109,064

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson, James Kwak

American ideology, Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, banking crisis, Bernie Madoff, Bonfire of the Vanities, bonus culture, break the buck, business cycle, buy and hold, capital controls, Carmen Reinhart, central bank independence, Charles Lindbergh, collapse of Lehman Brothers, collateralized debt obligation, commoditize, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Edward Glaeser, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, financial intermediation, financial repression, fixed income, George Akerlof, Gordon Gekko, greed is good, Home mortgage interest deduction, Hyman Minsky, income per capita, information asymmetry, interest rate derivative, interest rate swap, Kenneth Rogoff, laissez-faire capitalism, late fees, light touch regulation, Long Term Capital Management, market bubble, market fundamentalism, Martin Wolf, money market fund, moral hazard, mortgage tax deduction, Myron Scholes, Paul Samuelson, Ponzi scheme, price stability, profit maximization, race to the bottom, regulatory arbitrage, rent-seeking, Robert Bork, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, Satyajit Das, sovereign wealth fund, The Myth of the Rational Market, too big to fail, transaction costs, value at risk, yield curve

Also in 1987, Oliver Stone’s movie Wall Street was released, with its memorable antihero, corporate raider Gordon Gekko (played by Michael Douglas). Although the movie’s story shows the corruption and ultimate downfall of Gekko, it is remembered for his “Greed is good” speech, which justified the pursuit of money above all else. As screenwriter Stanley Weiser wrote recently, many people would later tell him the movie made them want to work on Wall Street: “A typical example would be a business executive or a younger studio development person spouting something that goes like this: ‘The movie changed my life. Once I saw it I knew that I wanted to get into such and such business. I wanted to be like Gordon Gekko.’ ”73 Liar’s Poker, Michael Lewis’s 1989 memoir, an ironic antibildungsroman in which the hero is fascinated but ultimately repelled by life at Salomon Brothers, popularized life on Wall Street for a generation of college students.

Its strategy was to take large risks on its own account rather than simply taking fees for providing advice or executing trades. As Bianco put it, “What sets Salomon apart is the sheer scale on which it oper-ates in the markets, reflecting an appetite for risk unrivaled among financial middlemen.” Four years later, Liar’s Poker, Michael Lewis’s memoir of his years at Salomon, would cement its status as the paradigmatic bank of the 1980s, the same decade that produced the original Oliver Stone Wall Street movie, with Gordon Gekko’s famous “Greed is good” speech. Looking back, however, Salomon seems so … small. When the Business Week story was written, it had $68 billion in assets and $2.8 billion in shareholders’ equity. It expected to earn $1.1 billion in operating profits for all of 1985. The next year, Gutfreund earned $3.2 million.3 At the time, those numbers seemed extravagant. Today? Not so much. If the financial crisis of 2007–2009 produced a king of Wall Street, it would most likely be Jamie Dimon, CEO of JPMorgan Chase and the “Last Man Standing,” according to the title of a recent book.4 (Lloyd Blankfein of Goldman Sachs would be the other contender.)

Even if the government’s strategy was to let the banks earn their way out of their problems, that strategy was being undermined by a bonus culture that diverted the excess profits to employees rather than to capital reserves. High risk and huge payouts—nothing changed, except a strengthened government guarantee. Defending the huge bonuses in St. Paul’s Cathedral in London in October 2009, Goldman Sachs executive Brian Griffiths went Gordon Gekko one better by invoking Jesus: “The injunction of Jesus to love others as ourselves is a recognition of self-interest.… We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all.”72 Goldman CEO Lloyd Blankfein even claimed to be “doing God’s work” (because banks raise money for companies who employ people and make things).73 The rest of us were not so lucky.


pages: 240 words: 73,209

The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment by Guy Spier

Albert Einstein, Atul Gawande, Benoit Mandelbrot, big-box store, Black Swan, Checklist Manifesto, Clayton Christensen, Daniel Kahneman / Amos Tversky, Exxon Valdez, Gordon Gekko, housing crisis, information asymmetry, Isaac Newton, Kenneth Arrow, Long Term Capital Management, Mahatma Gandhi, mandelbrot fractal, Nelson Mandela, NetJets, pattern recognition, pre–internet, random walk, Ronald Reagan, South Sea Bubble, Steve Jobs, winner-take-all economy, young professional, zero-sum game

In most cases, these are not things that are written about in textbooks. Because it’s a story about how things happen in the real world—and because the real world is messy—the topics are broad in scope. They range from the most insignificant of habits that I’ve developed, like what to read first, to the grandest: whom to choose as heroes and mentors and how their wisdom can change your life. This book traces the arc of a transformation. I started off as a Gordon Gekko wannabe—brash, shortsighted, and entirely out for myself. Then a series of transformations and self-realizations led me on a path from Benjamin Graham’s The Intelligent Investor to Ruane Cunniff to Poor Charlie’s Almanack to Robert Cialdini, then to meeting Mohnish Pabrai and lunch with Warren Buffett. That $650,100 meal had a life-changing impact on me, as you will see. Within one year of my meeting with Buffett, I let two-thirds of my staff in New York go, stashed half of my family’s belongings in storage, and shipped the other half to Zurich, where we went to live.

Television cameras from CNBC and elsewhere were already stationed outside the restaurant. With Warren’s permission, we had also hired our wedding photographer to memorialize the event. I was so nervous that I was run down and had a cold. I knew that Buffett was a penetrating judge of character, and I was afraid of being exposed. What if he saw through me and detected any lingering remnants of the Gordon Gekko side of my nature? But I was also enormously excited. From my meals with Mohnish, I’d seen what a huge impact it can have simply to hang out with a person you revere. So I was thrilled at the prospect of seeing Warren up close, of observing what made him tick. This would be the ultimate capitalist master class. At around 12:30 p.m., the seven of us sat down for lunch in a cozy, wood-paneled alcove near the kitchen.

Better still: Play the spy yourself. In polite social encounters, learn to probe. Ask indirect questions to get people to reveal their weaknesses and intentions. There is no occasion that is not an opportunity for artful spying.” In some ways, this scheming Machiavellian, approach to life and business is quite seductive. In my youth, there was a part of me that certainly identified with it, fancying myself as a budding Gordon Gekko, with the intelligence and cunning to manipulate my way to the top. And as my experience at D. H. Blair taught me, there is plenty of opportunity on Wall Street for cynical operators to get rich by putting their own interests first. But as I later discovered, there is also a more enlightened path to success, even within the dog-eat-dog financial world—an approach that I have come to think of as “The Buffett-Pabrai Way.”


pages: 262 words: 93,987

The Buy Side: A Wall Street Trader's Tale of Spectacular Excess by Turney Duff

asset-backed security, Berlin Wall, buy low sell high, collateralized debt obligation, fixed income, Gordon Gekko, high net worth, urban sprawl, white picket fence

—Brian O’Dea, author of High: Confessions of an International Drug Smuggler “The Buy Side is Wall Street meets Breaking Bad—except that this book is fact not fiction. Turney Duff yields to temptation at every turn, and the sheer volume of criminal behavior he saw, and even participated in, is astonishing.… If you want to see Wall Street’s seamy underbelly firsthand, read this book.” —Frank Partnoy, bestselling author of F.I.A.S.C.O. and Infectious Greed “If you took Gordon Gekko, Bud Fox, a copy of Bright Lights, Big City, and threw them in a blender with an ounce of cocaine, a bottle of Patrón Tequila, and your favorite teddy bear, you’d have yourself a Buy Side smoothie. Turney’s my kind of guy; a madman with heart. I couldn’t put the book down.” —Colin Broderick, author of Orangutan Copyright © 2013 by Turney Duff All rights reserved. Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York.

I’ve only seen Uncle Tucker twice in ten years, both times at my sisters’ weddings. All I know is, he moved to San Francisco with his second wife. He still works in finance. He shaved his mustache and traded in the Corvette for a navy blue Mercedes 560 SL that he calls the Boesky Benz. He named the car after his biggest client, Ivan Boesky, who was at least partly the inspiration for Wall Street’s Gordon Gekko. Because of Uncle Tucker, the Wall Street world has always seemed magical to me. But the idea of working there has never even entered my mind. He must know successful, influential people, even in the world of journalism. I jot down his number and say goodbye. Tucker answers the phone on the first ring. “Trading,” he says. I tell him it’s his nephew Turney and he’s surprised but happy to hear from me.

Over the next two hours, suits are whisked into the room. I have a “yes” rack and a “no” rack, both of which fill quickly. I feel like I’m in the movie Pretty Woman, but I’m unsure if I’m Julia Roberts or Richard Gere. I look in the mirror at myself draped in Dolce & Gabbana, Gucci, and Prada. With each suit I try on I feel more powerful. “Hi there, buddy,” I say to my reflection clad in the navy blue Prada. Peter is confused by my Gordon Gekko portrayal. “Sandbagged me on Bluestar, huh? I guess you think you taught the teacher a lesson that the tail can wag the dog, huh? Well, let me clue you in, pal. The ice is melting right underneath your feet.” Kevin, who has seen the movie, laughs at my performance. I end up buying five suits, two pairs of shoes, and a bunch of shirts. I don’t even look at the amount on the American Express receipt.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

That is, professional managers may maximize sales rather than profit or may inflate the corporate bureaucracy, as their prestige is positively related to the size of the company they manage (usually measured by sales) and the size of their entourage. This was the kind of practice Gordon Gekko (you’ve met him in Chapter 3) was attacking in Wall Street, when he pointed out the company that he was trying to take over had no less than thirty-three vice presidents, doing God knows what. Many pro-market economists, especially Michael Jensen and Eugene Fama, the 2013 Nobel Economics Prize winner, have suggested that this principal-agent problem can be reduced, if not eliminated, by aligning the interests of the managers more closely to those of the shareholders. They suggested two main approaches. One is making corporate takeover easier (so more Gordon Gekkos, please), so that managers who do not satisfy the shareholders can be easily replaced. The second is paying large parts of managerial salaries in the form of their own companies’ stocks (stock option), so that they are made to look at things more from the shareholder’s point of view.

It has also significantly changed the way in which non-financial corporations are run. The change was particularly pronounced in the US and the UK, in which new finance has advanced the furthest and in which, unlike in Germany or Japan, stakeholders other than shareholders have had little influence on how companies are managed. The first important change has been a further shrinking time horizon in management. With the rise of hostile takeovers in the 1980s (recall Gordon Gekko from Chapter 3), companies had already been put under increasing pressure to deliver short-term profits, if necessary at the cost of long-term competitiveness. But with the proliferation of so many financial instruments that provide quick and high returns, shareholders have become even more impatient in the last couple of decades. For example, in the UK, the average period of shareholding, which had already fallen from five years in the mid-1960s to two years in the 1980s, plummeted to about 7.5 months at the end of 2007.15 This has resulted in the formation of an ‘unholy alliance’ between the professional managers of corporations and the growing band of short-term shareholders, under the rallying call of ‘shareholder value maximization’ (see Chapter 5).


pages: 247 words: 64,986

Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own by Garett Jones

centre right, clean water, corporate governance, David Ricardo: comparative advantage, en.wikipedia.org, experimental economics, Flynn Effect, Gordon Gekko, greed is good, hive mind, invisible hand, Kenneth Arrow, law of one price, meta analysis, meta-analysis, prediction markets, Robert Gordon, Ronald Coase, Saturday Night Live, social intelligence, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thorstein Veblen, wikimedia commons, zero-sum game

And that’s true enough, but you have no influence over whether those other nineteen people bring chips or casseroles, so why not do what’s best for yourself: chips it is. This is one example of the famous “prisoner’s dilemma,” in which individual greed leads to an awful group outcome. Prisoner’s dilemmas are everywhere, and they’re the precise opposite of Adam Smith’s famous “invisible hand,” in which individual greed leads to a positive group outcome. Invisible hands and prisoner’s dilemmas are both at work in the world: sometimes, as Gordon Gekko said in the movie Wall Street, “Greed is good,” and sometimes greed creates misery. In this and the next chapter, we’ll see how greed can create misery, and we’ll see how higher-IQ groups are just a bit more likely to find a way to cooperate, a bit more likely to avoid the prisoner’s dilemma. The Real Prisoner’s Dilemma First off, let’s go back to the source—the classic economic example of when greed is bad.

Taiwan, 60 United States: average cognitive ability score in, 170; average IQ score in, 39, 47, 72, 170; as borrower from China, 82; da Vinci Effect in, 47; Democrats, 124, 126–27; downsizing of military, 69; economic policies, 123–24; education in, 122; GDP per person and cognitive ability in, 9; immigration to, 47–48, 159–60, 174n17; IQ and income in, 31, 32, 44; IQ and probability of voting in, 128; IQ and smoking in, 67–68; IQ scores in military, 29, 50; IQ scores of East Asians in, 45–46; lead exposure in, 63; presidential test scores, 119; Republicans, 124, 126–27; rising IQ scores in, 50; savings rate in, 72; taxation in, 122 Uruguay: average cognitive ability score in, 170; average IQ score in, 170 Vanhanen, Tatu: IQ and the Wealth of Nations, 38, 40–41 Veblen, Thorstein: on conspicuous consumption, 73–74; Veblen Effect, 73–74 verbal similarities tests, 51, 57 vocabulary tests, 20, 23, 33, 58, 125, 167 wages: minimum wage, 108; relationship to immigration, 47–48, 157–60; relationship to IQ scores, 4–5, 6–7, 14, 30–32, 35, 36, 43–44, 47–48, 49, 152, 153–54, 174n12; relationship to productivity, 30–31, 140–41, 144, 156 Wall Street: Gordon Gekko in, 86 Warner, John T., 69 Wechsler IQ test, 15, 20, 37, 39, 51, 125 Weede, Erich, 171n7 Weel, Jaap, 98–100 Wen Jiabao, 82 Wicherts, Jelte: on Lynn, 41–44, 56; on Sub-Saharan IQ score, 41, 42–43, 56 Wicherts, Jelte M., 173n1 Williams, Robert L., 175n18 win-stay/lose-shift strategy, 176n4 win-win outcomes, 2–3, 106–8, 109–10, 113, 151, 166 Wisconsin study of IQ and earnings, 31, 48 Wittman, Donald: on democracy and the Coase Theorem, 108; The Myth of Democratic Failure, 108 Wolfers, Justin, 134 Wolfinger, Raymond E., 128 Wonderlic IQ test, 176n10 Woodley, Michael A., 129 World Bank, 118 Yemen: average cognitive ability score in, 170; average IQ score in, 170 Zitzewitz, Eric, 134


pages: 239 words: 69,496

The Wisdom of Finance: Discovering Humanity in the World of Risk and Return by Mihir Desai

activist fund / activist shareholder / activist investor, Albert Einstein, Andrei Shleifer, assortative mating, Benoit Mandelbrot, Brownian motion, capital asset pricing model, carried interest, Charles Lindbergh, collective bargaining, corporate governance, corporate raider, discounted cash flows, diversified portfolio, Eugene Fama: efficient market hypothesis, financial innovation, follow your passion, George Akerlof, Gordon Gekko, greed is good, housing crisis, income inequality, information asymmetry, Isaac Newton, Jony Ive, Kenneth Rogoff, longitudinal study, Louis Bachelier, moral hazard, Myron Scholes, new economy, out of africa, Paul Samuelson, Pierre-Simon Laplace, principal–agent problem, Ralph Waldo Emerson, random walk, risk/return, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, Steve Jobs, Thales and the olive presses, Thales of Miletus, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, transaction costs, zero-sum game

Dreiser considered Cowperwood’s story, and finance more broadly, as evocative of “the strange, forceful ruthlessness of the human mind when it has freed itself from old faiths and illusions, and has not accepted any new ones. There you get mental action spurred by desire, ambition, vanity, without any of the moderating influences which we are prone to admire—sympathy, tenderness and fair play.” This characterization sounds very much like the way many view finance today. There is a fairly straight line from Cowperwood to the Gordon Gekko of Wall Street, the Patrick Bateman of Bret Easton Ellis’s American Psycho, and to the Eric Packer of Don DeLillo’s Cosmopolis. Cowperwood is actually a fully rounded character, whom it is easy to sympathize with. Gradually, the finance protagonists have become less sympathetic and realistic, and more ghoulish and robotic. But the constant across all these characters is the untrammeled desire for more.

A son of Albanian immigrants, he launched a hedge fund, was indicted for securities fraud, ran a pharmaceutical company, raised prices on a lifesaving drug by 5,000 percent, pled the Fifth Amendment when called to testify before Congress, purchased a onetime edition of a Wu-Tang Clan album for millions (and won’t share it), and livestreamed his life, which included flirting with underage girls, all by the age of thirty-three. With real finance characters like this, who needs fiction? Given how pervasive the theme of insatiable desire is in modern-day depictions of finance, it begs the question: Does this theme of insatiable desire reflect an idea grounded in finance? It is tempting to conclude that in fact finance is all about the individual pursuit of more. After all, when Gordon Gekko of Wall Street says “greed is good,” isn’t he actually framing a key insight of economics—that the pursuit of self-interest in some settings can lead to good outcomes? In fact, the most fundamental idea of finance questions the pursuit of more. It is an idea so foundational that it is often not taught and just left unsaid—as I have done so far. As we’ve seen, finance is primarily the story of risk and its omnipresence.


pages: 231 words: 71,248

Shipping Greatness by Chris Vander Mey

corporate raider, don't be evil, en.wikipedia.org, fudge factor, Google Chrome, Google Hangouts, Gordon Gekko, Jeff Bezos, Kickstarter, Lean Startup, minimum viable product, performance metric, recommendation engine, Skype, slashdot, sorting algorithm, source of truth, Steve Jobs, Superbowl ad, web application

“Eventually we have to stop dancing and get down to business.” Yuck! Do yourself a favor and avoid warning-level offenses: don’t use these icky aphorisms. If you find someone using them, let such phrases be a reminder to you that he or she is in stage 1. Ask the individual to stop and move on to stage 2. Stage 2: Being Fair and Using Data Now that you’ve put away the “I have to get the lowest possible price because that’s what Gordon Gekko would do” attitude, you can go about negotiating reasonably. The most reasonable way to negotiate a number is by trading data. For example, you volunteer some data: “I can get bandwidth from AT&T for $1/Gb.” Then the other party will volunteer additional data: “Our costs are $0.95 per Gb.” Hopefully things end nicely at this point, settling at $0.98 or $0.97 per gigabit (depending on who’s more of an a-hole), and both parties win.

Stage 5: Walking Away and Thinking It’s possible that after throwing in a few pot sweeteners and a few months of negotiation, everyone is so tired that you’re ready to do a deal. So you just do it. If this is you, proceed to stage 6 and light a candle at the chapel on the way home. Also, some money to the Salvation Army Santa might be in order. Most of us are not so lucky because fatigue makes everything worse (or so my new-mother friends tell me). It’s possible that stage 1 (in which you wanted to be Gordon Gekko, master of the universe) may rear its ugly head again. Posturing may ensue: “OK, we’re too far apart; I guess we’ll have to build it ourselves.” Threats may be made: “We’re going to put you out of business anyway…” Phones may be put on mute and warning-offense quality curses uttered. It’s at this point that a necessary cooling-off period is introduced organically. One party walks away from the deal, or gets upset and stops returning calls, or whatever.


pages: 290 words: 83,248

The Greed Merchants: How the Investment Banks Exploited the System by Philip Augar

Andy Kessler, barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, business cycle, buttonwood tree, buy and hold, capital asset pricing model, commoditize, corporate governance, corporate raider, crony capitalism, cross-subsidies, financial deregulation, financial innovation, fixed income, Gordon Gekko, high net worth, information retrieval, interest rate derivative, invisible hand, John Meriwether, Long Term Capital Management, Martin Wolf, new economy, Nick Leeson, offshore financial centre, pensions crisis, regulatory arbitrage, Sand Hill Road, shareholder value, short selling, Silicon Valley, South Sea Bubble, statistical model, Telecommunications Act of 1996, The Chicago School, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, tulip mania, value at risk, yield curve

Wall Street became ‘Disneyland for adults’, in the words of one corporate finance executive eagerly anticipating a $9 million bonus in 1986. But Wall Street’s newfound fame turned sour for a few years in the late 1980s and early 1990s. The huge rewards led to conspicuous consumption, flash spending and growing media interest in life on Wall Street. In the late 1980s Tom Wolfe’s bestseller Bonfire of the Vanities, Michael Douglas’s Oscar-winning portrayal of Gordon Gekko in the movie Wall Street and Michael Lewis’s tale of the Salomon Brothers jungle, Liar’s Poker, picked out some not very attractive characteristics of investment banking people.16 A crop of insider trading and market manipulation cases – notably the Boesky and Milken affairs in America and the Guinness scandal in the UK – revived old memories of greed and corruption in financial circles.17 Ivan Boesky was a prominent risk arbitrageur – someone who takes stock market positions in the hope of profiting from takeover bids – who received a prison sentence and a $100 million fine in 1986 after admitting to trading on insiders’ tips.18 Boesky was well known in financial circles but what shocked the public at large was where the trail led.

Chief executive officers accepted advice that led to mergers that had a less than evens chance of creating value. Clients pressed the banks to cut prices in some areas but not in others. No one seemed concerned about the high returns being made by the investment banks and their employees. Why? One reason is that the clients were committed to the market economy, trusted it to work and saw no need to intervene. Like Michael Douglas’s Gordon Gekko, they believed that ‘Greed, for want of a better word, is good. Greed is right. Greed works.’1 Another reason is that they were also in the markets for their own greed, and as long as this was fed they would not disturb the system. They were using other people’s money and were not too bothered about, to paraphrase J. K. Galbraith, ‘the bezzle’ – the amount of money siphoned out of the system.2 Against this background, the investment banks slipped easily into the role of Greed Merchants, trading greed and taking their own turn on the way.


pages: 91 words: 24,469

The Once and Future Liberal: After Identity Politics by Mark Lilla

affirmative action, anti-communist, Berlin Wall, Bernie Madoff, Bernie Sanders, Donald Trump, ending welfare as we know it, Gordon Gekko, mass immigration, Mikhail Gorbachev, new economy, New Urbanism, Ronald Reagan, sensible shoes, Silicon Valley

The cult that arose to worship him in the 1980s offered dreams of an easy path to nobility, open to anyone with an idea, a garage, and a few power tools. Easy in another sense, too, in that it made no moral demands. Americans have always been entrepreneurial and have always believed that to get rich is glorious. But our long-abandoned Calvinism treated wealth as a sign of moral worth, the fruit of discipline and self-denial, not the fruit of looking out for number one. The Horatio Alger stories were not Gordon Gekko stories or Ivan Boesky stories or Bernie Madoff stories. The characters did wear suspenders, but they were not masters of any universe, did not smoke big cigars or drink $1,000 bottles of wine or take clients to strip clubs. For all his social conservatism, Ronald Reagan’s vision of the good life was remarkably amoral. He did not explicitly preach or encourage hedonism; he did not extol the culture of impunity that developed during his presidency.


pages: 284 words: 92,688

Disrupted: My Misadventure in the Start-Up Bubble by Dan Lyons

activist fund / activist shareholder / activist investor, Airbnb, Ben Horowitz, Bernie Madoff, bitcoin, call centre, cleantech, cloud computing, corporate governance, disruptive innovation, dumpster diving, fear of failure, Filter Bubble, Golden Gate Park, Google Glasses, Googley, Gordon Gekko, hiring and firing, Jeff Bezos, Lean Startup, Lyft, Marc Andreessen, Mark Zuckerberg, Menlo Park, minimum viable product, new economy, Paul Graham, pre–internet, quantitative easing, ride hailing / ride sharing, Rosa Parks, Sand Hill Road, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, Snapchat, software as a service, South of Market, San Francisco, Stanford prison experiment, Steve Ballmer, Steve Jobs, Steve Wozniak, telemarketer, tulip mania, uber lyft, Y Combinator, éminence grise

(The investor later walked back that comment, saying it was a “poor choice of words.”) Start-ups seem to believe it is okay for them to bend rules. Some, like Uber and Airbnb, have built their businesses by defying regulations. Then again, if laws are stupid, why follow them? In the World According to Start-ups, when tech companies cut corners it is for the greater good. These start-up founders are not like Gordon Gekko or Bernie Madoff, driven by greed and avarice; they are Rosa Parks and Martin Luther King Jr., engaging in civil disobedience. There’s also a sense among start-ups that it’s okay for them to break the rules because they’re underdogs competing against huge opponents; they’re David, firing his slingshot at Goliath. Another argument is that the big guys break just as many rules as the little guys.

But anyway, I’m a two. I’m below average. As with my first score, I don’t argue with Trotsky or try to haggle or negotiate. I just listen. The third category is VORP, the scoring system that Halligan borrowed from Major League Baseball. VORP stands for value over replacement player. VORP is a cruel, heartless metric, and it’s weird to set it right alongside HEART. It’s like putting a photo of Gordon Gekko next to a photo of the Dalai Lama. VORP is the opposite of HEART. It’s the anti-HEART. It’s HEART-less. In this category I figure I will get a one, or a zero, or even a negative number, if that’s possible. I’m being paid a lot of money to do a job that a summer intern could do, a job that originally was created as a part-time assignment for Cranium’s administrative assistant. Scheduling people for a podcast and fetching glasses of water for Cranium and his guests in the studio are not challenging tasks.


pages: 294 words: 89,406

Lying for Money: How Fraud Makes the World Go Round by Daniel Davies

bank run, banking crisis, Bernie Madoff, bitcoin, Black Swan, Bretton Woods, business cycle, business process, collapse of Lehman Brothers, compound rate of return, cryptocurrency, financial deregulation, fixed income, Frederick Winslow Taylor, Gordon Gekko, high net worth, illegal immigration, index arbitrage, Nick Leeson, offshore financial centre, Peter Thiel, Ponzi scheme, price mechanism, principal–agent problem, railway mania, Ronald Coase, Ronald Reagan, short selling, social web, South Sea Bubble, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, time value of money, web of trust

So he decided to name the company after its business model; it is presumably a coincidence that at the same time the criminologist Donald Cressey was starting work on his 1972 classic work on occupational fraud, also titled Other People’s Money. The founders of OPM were keen on acronyms – at the height of their success, the other partner tried to bid for the Madison Square Garden entertainment complex seemingly for no other reason than that its initials were the same as his – Myron S. Goodman. Weissman and Goodman were a hell of a team; part Marx Brothers, part Gordon Gekko. They were brothers-in-law, highly regarded in the Orthodox Jewish community as philanthropists and for their devoutly religious and scholarly manner. Goodman would begin meetings by quoting Bible verses, while Weissman took time out from the business in 1973 to fight in the war against Egypt. They commuted by helicopter from their homes in Long Island to Manhattan until the neighbours objected to the noise.

When no fewer than twenty-three consecutive takeovers had significant buying from a single stockbroker’s office in Bowling Green, Kentucky, it raised some red flags. It turned out that one of the chatroom crowd had started passing on tips to friends and relatives in his home town. It didn’t help matters that some of Freeman’s syndicate had decided to name their trading account ‘Blue Horseshoe Investments’, after the code name used by Gordon Gekko in the film Wall Street. By 2000, the whole network had been rolled up. The interesting thing here is that this sort of insider dealing is a relatively modern crime. In the USA, it was banned in 1934, but it remained legal in the UK until 1980 and was only banned in New Zealand in 1998 (and even then, the Kiwis only got round to making it a criminal, rather than civil, offence in 2008). Not only that, but the criminal authorities are not even able to make their minds up as to who it is a crime against.


pages: 356 words: 105,533

Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market by Scott Patterson

algorithmic trading, automated trading system, banking crisis, bash_history, Bernie Madoff, butterfly effect, buttonwood tree, buy and hold, Chuck Templeton: OpenTable:, cloud computing, collapse of Lehman Brothers, computerized trading, creative destruction, Donald Trump, fixed income, Flash crash, Francisco Pizarro, Gordon Gekko, Hibernia Atlantic: Project Express, High speed trading, Joseph Schumpeter, latency arbitrage, Long Term Capital Management, Mark Zuckerberg, market design, market microstructure, pattern recognition, pets.com, Ponzi scheme, popular electronics, prediction markets, quantitative hedge fund, Ray Kurzweil, Renaissance Technologies, Sergey Aleynikov, Small Order Execution System, South China Sea, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stochastic process, transaction costs, Watson beat the top human players on Jeopardy!, zero-sum game

Acquaintances quickly discovered this when they met the intense gaze of his copper brown eyes. It was 1986. The bull had come roaring back in the financial capital of the world after the punishing doldrums of the 1970s. Peter Lynch was in the midst of his historic run at the helm of Fidelity Investments’ Magellan Fund. Warren Buffett, the Oracle of Omaha, was becoming a household name. It was the Wall Street of Michael Lewis and Gordon Gekko, of hostile takeovers and the Reagan Revolution. Times were good and getting better. Denizens of the Street were more than ready to celebrate. Levine couldn’t have cared less about the bull market. The programmer had little interest in trading or making money. His mind was focused on a single subject: changing the world through computers. Heading west toward Trinity Church on the western terminus of the famed street, yellow cabs darting by along the deep and narrow canyon of skyscrapers, worried-looking men storming out of subway stations, Levine glanced up at the sculpted Georgia marble façade and Corinthian columns of the New York Stock Exchange, imperious as a Roman temple.

A flimsy grass hula skirt encircled a rickety card table. Sans electricity, Levine sat in shadows—surrounded by brightly lit booths with flashy displays from deep-pocketed competitors like Instinet. Levine tried to hand out dollar bills or Susan B. Anthony coins impressed with an Island stamp, since it cost just a buck to execute a trade on Island. Most attendees—think Armani-clad traders with Rolex watches and greasy Gordon Gekko hairdos—didn’t want the free dollar. Levine decided to stick to programming. He’d find others to pitch Island. Better yet, Island would sell itself. FROM the beginning, Levine’s trading pool was humming like a Formula One race car. Using Island, Watcher users could blast trades into the market at speeds never before seen. Market makers were utterly outclassed and outgunned. While Island had many orders flowing in from Watcher traders and a handful of other SOES firms, it wasn’t enough to turn it into a substantial business.


pages: 113 words: 37,885

Why Wall Street Matters by William D. Cohan

Apple II, asset-backed security, bank run, Bernie Sanders, Blythe Masters, bonus culture, break the buck, buttonwood tree, corporate governance, corporate raider, creative destruction, Credit Default Swap, Donald Trump, Exxon Valdez, financial innovation, financial repression, Fractional reserve banking, Gordon Gekko, greed is good, income inequality, Joseph Schumpeter, London Interbank Offered Rate, margin call, money market fund, moral hazard, Potemkin village, quantitative easing, secular stagnation, Snapchat, South Sea Bubble, Steve Jobs, Steve Wozniak, too big to fail, WikiLeaks

The modern-day equivalent of this sentiment can be found in the musings of Bernie Sanders, the U.S. senator from Vermont and former Democratic presidential candidate, whose stump speeches during the 2016 presidential campaign condemned Wall Street relentlessly. “Greed, fraud, dishonesty and arrogance, these are the words that best describe the reality of Wall Street today,” he said in January 2016. And then he paid homage to one of the most recognizable cultural touchstones about modern Wall Street when he referred to the famous “Greed is good” scene in Wall Street, the 1987 Oliver Stone film, where Gordon Gekko, played with oleaginous glee by Michael Douglas, lectures Bud Fox, his young and aspiring apprentice (played by Charlie Sheen). “So, to those on Wall Street who may be listening today, let me be very clear,” Senator Sanders continued. “Greed is not good. In fact, the greed of Wall Street and corporate America is destroying the fabric of our nation…We will no longer tolerate an economy and a political system that has been rigged by Wall Street to benefit the wealthiest Americans in this country at the expense of everyone else.”


pages: 137 words: 36,231

Information: A Very Short Introduction by Luciano Floridi

agricultural Revolution, Albert Einstein, bioinformatics, carbon footprint, Claude Shannon: information theory, conceptual framework, double helix, Douglas Engelbart, Douglas Engelbart, George Akerlof, Gordon Gekko, industrial robot, information asymmetry, intangible asset, Internet of things, invention of writing, John Nash: game theory, John von Neumann, Laplace demon, moral hazard, Nash equilibrium, Nelson Mandela, Norbert Wiener, Pareto efficiency, phenotype, Pierre-Simon Laplace, prisoner's dilemma, RAND corporation, RFID, Thomas Bayes, Turing machine, Vilfredo Pareto

All this involves the elaboration of intermediary, internal constructs, which are stored, transformed, manipulated, and communicated over variable lengths of time, from short-term memory to over a lifetime. In humans, it involves the unique capacity to gather, store, and retrieve, exchange, integrate, and update, use and indeed misuse semantic information acquired by other people, including past generations. It is this social and economic sphere of information that will be explored in the next chapter. In Oliver Stone's film Wall Street (1987), the main character, Gordon Gekko (Michael Douglas), declares that `the most valuable commodity I know of is information'. He was probably right. Information has always had great value, and whoever has owned it has usually been keen on protecting it. This is why, for example, there are legal systems regulating intellectual property. Intellectual property rights concern artistic and commercial creations of the mind, and hence the relevant kinds of information and intangible assets.


pages: 374 words: 114,600

The Quants by Scott Patterson

Albert Einstein, asset allocation, automated trading system, beat the dealer, Benoit Mandelbrot, Bernie Madoff, Bernie Sanders, Black Swan, Black-Scholes formula, Blythe Masters, Bonfire of the Vanities, Brownian motion, buttonwood tree, buy and hold, buy low sell high, capital asset pricing model, centralized clearinghouse, Claude Shannon: information theory, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, Doomsday Clock, Edward Thorp, Emanuel Derman, Eugene Fama: efficient market hypothesis, fixed income, Gordon Gekko, greed is good, Haight Ashbury, I will remember that I didn’t make the world, and it doesn’t satisfy my equations, index fund, invention of the telegraph, invisible hand, Isaac Newton, job automation, John Meriwether, John Nash: game theory, Kickstarter, law of one price, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, margin call, merger arbitrage, money market fund, Myron Scholes, NetJets, new economy, offshore financial centre, old-boy network, Paul Lévy, Paul Samuelson, Ponzi scheme, quantitative hedge fund, quantitative trading / quantitative finance, race to the bottom, random walk, Renaissance Technologies, risk-adjusted returns, Robert Mercer, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Sergey Aleynikov, short selling, South Sea Bubble, speech recognition, statistical arbitrage, The Chicago School, The Great Moderation, The Predators' Ball, too big to fail, transaction costs, value at risk, volatility smile, yield curve, éminence grise

The next day, it soared 186.84 points, its biggest one-day point advance in history at the time. But the damage had been done. The mood around the country turned decidedly anti–Wall Street as the junk bond scandals hit the front pages of newspapers. An October 1987 Newsweek cover queried, “Is the Party Over? A Jolt for Wall Street’s Whiz Kids.” In December 1987, audiences in movie theaters listened to Gordon Gekko, the slimy takeover artist played by Michael Douglas, proclaim the mantra for the decade in Oliver Stone’s Wall Street: “Greed is good.” A series of popular books reflecting the anti–Wall Street sentiment hit the presses: Bonfire of the Vanities by Tom Wolfe, Barbarians at the Gate by Wall Street Journal reporters Bryan Burrough and John Helyar, The Predators’ Ball by Connie Bruck, Liar’s Poker by Michael Lewis.

At the time, the quants were known as rocket scientists, since many came from research hotbeds such as Bell Labs, where cell phones were invented, or Los Alamos National Laboratory, birthplace of the atomic bomb. Wall Street’s gut traders eventually proved to be no match for such explosive brainpower. Michael Lewis’s Wall Street classic, Liar’s Poker, exemplified and exposed the old-school Big Swinging Dick trader of the 1980s, the age of Gordon Gekko’s “greed is good.” Lewis Ranieri, the mortgage-bond trader made famous in the book, made huge bets based on his burger-fueled gut. Michael Milken of Drexel Burhman for a time ruled the Street, financing ballsy leveraged buyouts with billions in junk bonds. Nothing could be more different from the cerebral, computerized universe of the quants. Those two worlds collided when Aaron Brown strode onto Kidder’s trading floor.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, starchitect, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

“You had people in their thirties, through hedge funds and Goldman Sachs partner jobs, people who were making twenty, thirty, forty million a year. And there were a lot of them doing it. They started hanging out with each other. They became a pack. They started roaming the globe together as global high rollers and the differences between them and the rest of the world became exponential. It was no longer just Gordon Gekko. It developed into a totally different stratosphere.” — Ms. Peterson’s dinner party observations are borne out by the data. In America, the gap between the top 1 percent and everyone else has indeed developed into “a totally different stratosphere.” In the 1970s, the top 1 percent of earners captured about 10 percent of the national income. Thirty-five years later, their share had risen to nearly a third of the national income, as high as it had been during the Gilded Age, the previous historical peak.

But at a moment of hyperinflation and slightly lower state interest rates, banking offered an opportunity to make the first big post-Soviet windfall. Even more important, the fortunes earned using state credits provided the future oligarchs with the capital and the connections to muscle their way into the real windfall, the 1995 loans-for-shares giveaway of Russia’s natural resources. Because of Gordon Gekko, Bendukidze missed out. — Soros learned about revolutions the hard way. He compares 2008, with its cataclysmic events and his survival of them, with 1944, when as a Jewish fourteen-year-old in Nazi-occupied Budapest he and his family eluded the Holocaust. The Soroses and their circle of friends had lived comfortable, largely secular lives before the Germans arrived. Many in their community were unable to grasp that that life was over and they needed to flee at once.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

This alone drew admirers, yet next to it sat an equally expensive LaFerrari, a $1-million McLaren, and a Maybach – a budget trolley in comparison, but still worth almost half a million US dollars. Together, the story reported, the cars helped to attract a crowd. This squad of horsepower and conspicuous luxury waiting on double yellow lines for its masters was not a sign of London bouncing back after the Great Recession. Nor was it the site of an annual meeting between Gordon Gekko, Sherman McCoy, Patrick Bateman, and their modern, real-life incarnations in the asset management industry. The owners were “wealthy individuals from the Middle East” who had airlifted their four-wheeled toys to London for a short stopover. It costs roughly $30,000 for a car’s return ticket with Qatar Airways, but considering that a customized paint job alone can exceed $40,000, probably no one complained.14 Stories like these get associated with capitalism.

Like a Greek tragedy in which every actor acts rationally, if not morally, yet still produces a bad outcome, the sources of gray capitalism have been taking Western economies for a ride toward a growth tragedy. The financial sector in the Western world started to expand in earnest around 1980, part of a larger trend of intermediaries investing, advising, managing, and facilitating companies. Few characters have symbolized that early era of latter-day financial capitalism as much as Gordon Gekko, the villain of the 1987 movie Wall Street played by Michael Douglas. Barring his criminal behavior, Gekko is in several ways representative of the financial ecology that has grown in the past decades. The financial sector has expanded rapidly, and rewards its stars with exorbitant salaries. Total remuneration increased sharply and the sector’s share of all American corporate profits went from well below 10 percent in 1980 to almost 30 percent in 2012.


pages: 154 words: 47,880

The System: Who Rigged It, How We Fix It by Robert B. Reich

affirmative action, Affordable Care Act / Obamacare, Bernie Madoff, Bernie Sanders, business cycle, clean water, collective bargaining, corporate governance, corporate raider, corporate social responsibility, Credit Default Swap, crony capitalism, cryptocurrency, Donald Trump, ending welfare as we know it, financial deregulation, Gordon Gekko, immigration reform, income inequality, Jeff Bezos, job automation, London Whale, Long Term Capital Management, market fundamentalism, mass incarceration, mortgage debt, Occupy movement, Ponzi scheme, race to the bottom, Robert Bork, Ronald Reagan, shareholder value, too big to fail, trickle-down economics, union organizing, women in the workforce, working poor, zero-sum game

In King Icahn, a 1993 biography, author Mark Stevens describes Icahn as a “germophobic, detached, relatively loveless man,” and quotes one contemporary saying, “Carl’s dream in life is to have the only fire truck in town. Then when your house is in flames, he can hold you up for every penny you have.” Isaac Perlmutter, the CEO of Marvel Comics and a veteran of the Israeli Army, likened dealing with Icahn to negotiating with terrorists. Also like Trump, Icahn came to prominence in the roaring 1980s. As America’s preeminent corporate raider, he was part of the inspiration for the character Gordon Gekko in the 1987 film Wall Street. When Oliver Stone was researching the film, he visited Icahn and borrowed one of Icahn’s observations for the Gekko character: “If you need a friend, get a dog.” (Icahn borrowed the phrase from Harry Truman’s description of life in Washington. It’s unclear whether Icahn also supplied the most memorable line in the film: “Greed, for lack of a better word, is good.


pages: 311 words: 130,761

Framing Class: Media Representations of Wealth and Poverty in America by Diana Elizabeth Kendall

Bernie Madoff, blue-collar work, Bonfire of the Vanities, call centre, David Brooks, declining real wages, Donald Trump, employer provided health coverage, ending welfare as we know it, fixed income, framing effect, Georg Cantor, Gordon Gekko, greed is good, haute couture, housing crisis, illegal immigration, income inequality, mortgage tax deduction, new economy, payday loans, Ponzi scheme, Ray Oldenburg, Richard Florida, Ronald Reagan, Saturday Night Live, telemarketer, The Great Good Place, Thorstein Veblen, trickle-down economics, union organizing, upwardly mobile, urban planning, working poor

Leach was the master of price-tag framing, showing viewers some of the lavish residences, luxury vehicles, and exotic travel destinations enjoyed by the world’s wealthiest people.93 At the end of each episode, Leach wished his viewers “champagne wishes and caviar dreams.” As that tag line suggests, the lifestyles of the rich and famous shown on Leach’s program were nothing more than “wishes” or “dreams” for the typical viewer. However, the series supported one of the key tenets of the gospel of materialism—namely, “Greed is good,” as stockbroker Gordon Gekko (played by Michael Douglas) declares in the 1980s film Wall Street. During the economic crisis of the 2000s, in Wall Street 2: Money Never Sleeps, Michael Douglas reprises his role as Gordon Gekko, who emerges twenty years later from prison and seeks to rebuild his career and repair his relationship with his daughter. She is engaged to a young, ambitious Wall Street trader with goals much like Gekko himself had when he became involved in chicanery resembling much of what has contributed to many of this country’s financial problems in the twenty-first century.94 Like the original Wall Street and other films such as the 1980s classic Bonfire of the Vanities, Wall Street 2 highlights price-tag framing: everything (and everybody) has a price, and the higher the price, the greater the zeal with which people will pursue wealth and power at any cost. 9781442202238.print.indb 48 2/10/11 10:46 AM Twenty-Four-Karat Gold Frames 49 Not only does price-tag framing tell media audiences how much the rich pay for their possessions, but it also may suggest that ordinary people can live like millionaires, even if on a reduced scale.


pages: 421 words: 128,094

King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone by David Carey

activist fund / activist shareholder / activist investor, asset allocation, banking crisis, Bonfire of the Vanities, business cycle, carried interest, collateralized debt obligation, corporate governance, corporate raider, credit crunch, diversification, diversified portfolio, fixed income, Gordon Gekko, margin call, Menlo Park, mortgage debt, new economy, Northern Rock, risk tolerance, Rod Stewart played at Stephen Schwarzman birthday party, Sand Hill Road, sealed-bid auction, Silicon Valley, sovereign wealth fund, The Predators' Ball, éminence grise

.… Financiers who celebrate fast fortunes made while workers face stagnant pay and declining job security risk becoming targets for a growing dissent.” When, on the eve of Blackstone’s IPO four months after the party, new tax proposals were announced, they were immediately dubbed the Blackstone Tax and the Journal blamed Schwarzman, saying his “garish 60th birthday party this year played into the hands of populists looking for a real-life Gordon Gekko to skewer.” Schwarzman’s exuberance had put the industry, and himself, on trial. It was easy to see the sources of the fears. Private equity embodies the capitalist ethos in its purest form, obsessed with making companies more valuable, whether that means growing, shrinking, folding one business and launching another, merging, or moving. It is clearheaded, unsentimental ownership with a vengeance, and a deadline.

Hill had also been an architect of some of the most iconic friendly mergers of the age: Bendix Corp.’s $1.8 billion merger with Allied Corp. in 1983, American Stores’ $2.5 billion takeover of Lucky Stores in 1988, and Time Incorporated’s $14 billion merger with Warner Communications in 1989. He dressed the part to perfection, from his back-combed coif to his impeccably tailored Paul Stuart suits and tasseled loafers. Rumor had it that Gordon Gekko in the movie Wall Street was styled after Tom Hill. In 1993 Hill was ousted as Lehman’s co-CEO, and Blackstone soon tapped him to cohead M&A and assume Roger Altman’s mantle as a brand-name rainmaker. From the moment Altman left, Schwarzman and Peterson had searched doggedly for a worthy replacement, Schwarzman remarked when Blackstone hired Hill. “Tom fills that bill,” he said. The timing seemed propitious.


pages: 494 words: 132,975

Keynes Hayek: The Clash That Defined Modern Economics by Nicholas Wapshott

"Robert Solow", airport security, banking crisis, Bretton Woods, British Empire, business cycle, collective bargaining, complexity theory, creative destruction, cuban missile crisis, Francis Fukuyama: the end of history, full employment, Gordon Gekko, greed is good, Gunnar Myrdal, if you build it, they will come, Isaac Newton, Joseph Schumpeter, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, means of production, Mont Pelerin Society, mortgage debt, New Journalism, Northern Rock, Paul Samuelson, Philip Mirowski, price mechanism, pushing on a string, road to serfdom, Robert Bork, Ronald Reagan, Simon Kuznets, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, trickle-down economics, War on Poverty, Yom Kippur War

Adjustments were made and priorities altered. The freewheeling Reagan years had altered the mood in America. Private enterprise replaced communal action as the preferred way to change society. The free-loving flower children of the 1960s’ “Love Generation” had given way to the self-centered “Me Generation” of the ’80s and ’90s. Bob Dylan’s call to action “The Times They Are a-Changin’” had been superceded by Gordon Gekko’s mantra “Greed Is Good.”21 The national battle for civil rights for minorities was replaced by a demand for smaller government, states’ rights, and more individual rights. By the early 1990s, Taylor’s rule, showing the trade-off between interest rates and the rate of inflation, named after the Stanford economist John Taylor,22 came to replace the Phillips curve, the trade-off between employment and inflation, as the equation of choice for those running the economy.

Bush’s Council of Economic Advisers (2005–6). 16 Ben Bernanke, remarks at “A Conference to Honor Milton Friedman,” University of Chicago, Chicago, November 8, 2002. 17 Michael Kinsley (1951– ), American political journalist. 18 Michael Kinsley, “Greenspan Shrugged,” The New York Times, October 14, 2007. 19 Greenspan, Age of Turbulence, p. 68. 20 George H. W. Bush (1924– ), ambassador to the UN, director of the CIA, and 41st president of the United States (1989–93). 21 The “Greed Is Good” speech by Gordon Gekko, the hero of Oliver Stone’s 1987 movie Wall Street, was based on a commencement address at the University of California, 1986, by the convicted inside-dealing stock trader Ivan Boesky, who said, “I think greed is healthy. You can be greedy and still feel good about yourself.” 22 John Brian Taylor (1946– ), American economist and Robert Raymond Professor of Economics at Stanford University. 23 George H.


pages: 455 words: 138,716

The Divide: American Injustice in the Age of the Wealth Gap by Matt Taibbi

banking crisis, Bernie Madoff, butterfly effect, buy and hold, collapse of Lehman Brothers, collateralized debt obligation, Corrections Corporation of America, Credit Default Swap, credit default swaps / collateralized debt obligations, Edward Snowden, ending welfare as we know it, fixed income, forensic accounting, Gordon Gekko, greed is good, illegal immigration, information retrieval, London Interbank Offered Rate, London Whale, naked short selling, offshore financial centre, Ponzi scheme, profit motive, regulatory arbitrage, short selling, telemarketer, too big to fail, War on Poverty

Wall Street in 2003 was a very different place from the world Ben Graham had written about in his 1934 Security Analysis. A more definitive portrait of modern finance would probably be the movie Wall Street, which had a profound effect on the city’s business culture, although probably not the effect its heavy-handed lefty director Oliver Stone expected. While the rest of America understood Michael Douglas’s iconic Gordon Gekko character as a villain, and saw his famed “greed is good” speech as incisive satire, many aspiring Wall Street traders sincerely thought—and still think—that Gekko was the movie’s hero. In the early 1990s, Wall Street saw a massive influx of young Gekko wannabes who thought waiting any amount of time to get fabulously wealthy was for losers, or at the very least for people who had never read Sun Tzu.

Another SAC analyst, Jon Horvath, pleaded guilty to being part of a “criminal club” that swapped nonpublic information about technology companies. For a while, it looked as if Cohen himself might get away. In March 2013 the SEC settled insider trading charges with Cohen for $616 million, and Cohen was so depressed by the paltry fine (which was only a fraction of his rumored $8 billion personal fortune) that he immediately went out and bought a $155 million Picasso (Le Rêve) and a $60 million, Gordon Gekko–style beach house in the Hamptons (right next to his existing $18 million house on the same beach). But later in the year, SAC itself was criminally indicted on insider trading charges, and Cohen was also charged civilly by the SEC for failure to supervise in the Martoma case. As of this writing, it appears that at the very least, SAC will be shut down. Meanwhile ten former SAC employees have been charged or implicated in illegal trading, and five have admitted guilt.


pages: 504 words: 139,137

Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined by Lasse Heje Pedersen

activist fund / activist shareholder / activist investor, algorithmic trading, Andrei Shleifer, asset allocation, backtesting, bank run, banking crisis, barriers to entry, Black-Scholes formula, Brownian motion, business cycle, buy and hold, buy low sell high, capital asset pricing model, commodity trading advisor, conceptual framework, corporate governance, credit crunch, Credit Default Swap, currency peg, David Ricardo: comparative advantage, declining real wages, discounted cash flows, diversification, diversified portfolio, Emanuel Derman, equity premium, Eugene Fama: efficient market hypothesis, fixed income, Flash crash, floating exchange rates, frictionless, frictionless market, Gordon Gekko, implied volatility, index arbitrage, index fund, interest rate swap, late capitalism, law of one price, Long Term Capital Management, margin call, market clearing, market design, market friction, merger arbitrage, money market fund, mortgage debt, Myron Scholes, New Journalism, paper trading, passive investing, price discovery process, price stability, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, Renaissance Technologies, Richard Thaler, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, selection bias, shareholder value, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stocks for the long run, stocks for the long term, survivorship bias, systematic trading, technology bubble, time value of money, total factor productivity, transaction costs, value at risk, Vanguard fund, yield curve, zero-coupon bond

If you think the earnings will come out higher than others expect, you buy before the announcement and sell after the announcement. More generally, such opportunistic traders try to put on a position before something is broadly known and unwind the position when the information gets incorporated into the price based on the motto: Buy on rumors, sell on news. If you know a rumor to be true, then you could be engaging in illegal insider trading (as Gordon Gekko, played by Michael Douglas, in the movie Wall Street). Whereas equity long–short managers often have more long positions than short, the reverse is true for dedicated short-bias managers. They use similar techniques as equity long–short managers, but they focus on finding companies to sell short. Short-selling means taking a bet that the share price will go down. Just like buying a stock means that you profit if the stock price goes up, taking a short position means that you profit if the price goes down.

That said, I believe that the methods described in this book are essential for all managers, whether discretionary or quantitative. Indeed, many serious discretionary traders often analyze the historical performance of a trading idea before implementing it in large size. For example, in my interview with Lee Ainslie, he told me how his Maverick Capital has built a quantitative system that informs their fundamental process and helps manage the risk. Macro Strategies If Gordon Gekko was an equity trader in the movie Wall Street, the Duke brothers and Eddie Murphy were macro traders in the movie Trading Places, using futures markets to bet on the direction of orange juice prices. I divide macro strategies into global macro and managed futures. Global macro traders bet on economy-wide phenomena around the world. They take the view that the overall stock market will go up or down, that inflation will lead to a spike in gold prices, or that emerging-market currencies will rise or collapse.


pages: 162 words: 50,108

The Little Book of Hedge Funds by Anthony Scaramucci

Andrei Shleifer, asset allocation, Bernie Madoff, business process, carried interest, corporate raider, Credit Default Swap, diversification, diversified portfolio, Donald Trump, Eugene Fama: efficient market hypothesis, fear of failure, fixed income, follow your passion, Gordon Gekko, high net worth, index fund, John Meriwether, Long Term Capital Management, mail merge, margin call, mass immigration, merger arbitrage, money market fund, Myron Scholes, NetJets, Ponzi scheme, profit motive, quantitative trading / quantitative finance, random walk, Renaissance Technologies, risk-adjusted returns, risk/return, Ronald Reagan, Saturday Night Live, Sharpe ratio, short selling, Silicon Valley, Thales and the olive presses, Thales of Miletus, the new new thing, too big to fail, transaction costs, Vanguard fund, Y2K, Yogi Berra, zero-sum game

Susan Krakower, Mark Hoffman, Nik Deogun, Melissa Lee, Scott Wapner, Mary Duffy, John Melloy, Patty Martell, Lydia Thew, Gary Kaminsky, Maria Bartiromo, David Faber, Guy Adami, Joe Terranova, Tim Seymour, Amanda Drury, Carl Quintanilla, Jim Cramer, Brian Steel, Brian Sullivan, Maneet Ahuja, Pete and Jon Najarian, Steve Grasso, Steve Cortes, Karen Finerman, Brian Sullivan, Samantha Wright, and a legion of others who always make my time on the network a great learning experience. I also want to acknowledge my brother David; my sister Susan; my mom and dad, Al and Marie Scaramucci; the mother of my children, Lisa; and if you read my first book Goodbye Gordon Gekko, my first business mentor Uncle Salvatore Defeo, Sonny, Bobby, and Augie Defeo. If I have left anyone out, I offer an apology. The oversight, while unintentional, is more of a function of a publishing deadline and a warning by my publisher not to make this too long.


pages: 237 words: 50,758

Obliquity: Why Our Goals Are Best Achieved Indirectly by John Kay

Andrew Wiles, Asian financial crisis, Berlin Wall, bonus culture, British Empire, business process, Cass Sunstein, computer age, corporate raider, credit crunch, Daniel Kahneman / Amos Tversky, discounted cash flows, discovery of penicillin, diversification, Donald Trump, Fall of the Berlin Wall, financial innovation, Gordon Gekko, greed is good, invention of the telephone, invisible hand, Jane Jacobs, lateral thinking, Long Term Capital Management, Louis Pasteur, market fundamentalism, Myron Scholes, Nash equilibrium, pattern recognition, Paul Samuelson, purchasing power parity, RAND corporation, regulatory arbitrage, shareholder value, Simon Singh, Steve Jobs, Thales of Miletus, The Death and Life of Great American Cities, The Predators' Ball, The Wealth of Nations by Adam Smith, ultimatum game, urban planning, value at risk

In the end he was forced out of his post at Sunbeam, the appliance manufacturer, amid allegations of accounting abuse and profit manipulation. The corporation went bankrupt. Dunlap was spared possible civil and criminal suits only after he agreed to pay penalties and restitution of fifteen million dollars.10 The history of the last two decades is littered with fallen idols who, like Dunlap, stridently asserted the primacy of wealth. Gordon Gekko, the antihero of Oliver Stone’s 1987 film Wall Street, famously proclaimed: “Greed is good.” Gekko was partly based on Ivan Boesky, a notorious corporate raider of the 1980s, who was reported as telling a class at Columbia: “I want you to know that I think greed is healthy. You can be greedy and still feel good about yourself.”11 Soon after, Boesky went to prison, convicted of insider trading.


pages: 486 words: 150,849

Evil Geniuses: The Unmaking of America: A Recent History by Kurt Andersen

affirmative action, Affordable Care Act / Obamacare, airline deregulation, airport security, always be closing, American ideology, American Legislative Exchange Council, anti-communist, Apple's 1984 Super Bowl advert, artificial general intelligence, autonomous vehicles, basic income, Bernie Sanders, blue-collar work, Bonfire of the Vanities, bonus culture, Burning Man, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, centre right, computer age, coronavirus, corporate governance, corporate raider, COVID-19, Covid-19, creative destruction, Credit Default Swap, cryptocurrency, deindustrialization, Donald Trump, Elon Musk, ending welfare as we know it, Erik Brynjolfsson, feminist movement, financial deregulation, financial innovation, Francis Fukuyama: the end of history, future of work, game design, George Gilder, Gordon Gekko, greed is good, High speed trading, hive mind, income inequality, industrial robot, interchangeable parts, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jeff Bezos, jitney, Joan Didion, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, knowledge worker, low skilled workers, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, Menlo Park, Naomi Klein, new economy, Norbert Wiener, Norman Mailer, obamacare, Peter Thiel, Picturephone, plutocrats, Plutocrats, post-industrial society, Powell Memorandum, pre–internet, Ralph Nader, Right to Buy, road to serfdom, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, Saturday Night Live, Seaside, Florida, Second Machine Age, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Stewart Brand, strikebreaker, The Death and Life of Great American Cities, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, union organizing, universal basic income, Unsafe at Any Speed, urban planning, urban renewal, very high income, wage slave, Wall-E, War on Poverty, Whole Earth Catalog, winner-take-all economy, women in the workforce, working poor, young professional, éminence grise

It wouldn’t and couldn’t have been made just a dozen years earlier. The main plot points of Oliver Stone’s Wall Street were spot on: a superstar financial speculator engages in illegal inside trading, a predatory takeover strips a profitable company of its assets, and unionized workers are bamboozled into going along with a deal that will leave them without their good jobs and pensions. The corporate raider Gordon Gekko, played by Michael Douglas, does get his comeuppance in the end because his stockbroker, the Charlie Sheen character who provided him with the tradable inside information about his mechanic father’s airline company, flips on him. But Gekko is the star of the show, the exciting sexy late-model 1980s antihero. The most memorable scene from Wall Street is Gekko’s speech to a meeting in a big hotel ballroom in midtown Manhattan of hundreds of shareholders of a paper manufacturer in which he’s bought up stock to execute a hostile takeover.

Financialization happening in sync with the other plotlines and big shifts in this book was not a coincidence. The changes were all of a piece and synergistic. Wall Street’s new hegemony was first enabled by Milton Friedman’s mainstreamed libertarianism and then reinforced it in turn—ditto with financialization and deregulation, the Law and Economics movement, the atrophying of antitrust, the lionization of guys like Jack Welch and Gordon Gekko, the digital revolution, increasingly short-term thinking, only the rich getting richer, and the explosion of corporate lobbying in Washington.*1 The Harvard Business School political scientist Gautam Mukunda has a lucid explaination for how extreme financialization happened. “Real power,” he wrote recently in the Harvard Business Review, comes not from forcing people to do what you want but from changing the way people think, so that they want to do what you want….The ability of a powerful group to reward those who agree with it and punish those who don’t distorts the marketplace of ideas….The result can be an entire society twisted to serve the interests of its most powerful group, further increasing that group’s power in a vicious cycle….In the United States…it’s…the financial sector—particularly Wall Street—that has disproportionate power….The financial system is the economy’s circulatory system.


pages: 330 words: 59,335

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike

Albert Einstein, Atul Gawande, Berlin Wall, Checklist Manifesto, choice architecture, Claude Shannon: information theory, collapse of Lehman Brothers, compound rate of return, corporate governance, discounted cash flows, diversified portfolio, Donald Trump, Fall of the Berlin Wall, Gordon Gekko, intangible asset, Isaac Newton, Louis Pasteur, Mark Zuckerberg, NetJets, Norman Mailer, oil shock, pattern recognition, Ralph Waldo Emerson, Richard Feynman, shared worldview, shareholder value, six sigma, Steve Jobs, Thomas Kuhn: the structure of scientific revolutions

The company was ultimately taken over, after an extended proxy fight, by this most unlikely raider—a little-known, jugeared, thirty-five-year-old wunderkind from Nebraska named Warren Buffett. Buffett ran a small investment partnership out of a nondescript office building in Omaha and had no prior management experience. He was very different from the notorious LBO barons of the 1980s, however. First of all, he was not very hostile, having established a close relationship with the Chace family before making his move. Second, he didn’t use any debt—this was a long way from Gordon Gekko or Henry Kravis. Buffett had been attracted to Berkshire by its cheap price relative to book value. At the time, the company had only a weak market position in a brutally competitive commodity business (suit linings) and a mere $18 million in market capitalization. From this undistinguished start, unprecedented results followed; and measured by long-term stock performance, the formerly crew-cut Nebraskan is simply on another planet from all other CEOs.


pages: 219 words: 61,334

Brit-Myth: Who Do the British Think They Are? by Chris Rojek

Bob Geldof, British Empire, business climate, colonial rule, deindustrialization, demand response, full employment, Gordon Gekko, Isaac Newton, Khartoum Gordon, Live Aid, Mahatma Gandhi, mass immigration, means of production, post-industrial society, Red Clydeside, sceptred isle, Stephen Hawking, the market place, urban planning, Winter of Discontent

By the same token, the British model of reserve is well suited for representations of villainy because it smacks of innate superiority. Of course, the villainous traits that Hollywood associates with the British are not exclusively typical of the nation. Other non-British characters in the afi’s Top 50, such as Nurse Ratched (Louise Fletcher in One Flew Over 133 CELLULOID HEROES AND VILLAINS The Cuckoo’s Nest, 1975), Mr Potter (Lionel Barrymore in It’s A Wonderful Life, 1946), Gordon Gekko (Michael Douglas in Wall Street, 1987) and Kaiser Soza (Kevin Spacey in The Usual Suspects, 1995), have comparable characteristics. Indeed, it would be absurd to maintain that Hollywood regards the British as holding all the cards in the portrayal of villainy. All the same, it is striking that Hollywood repeatedly identifies the British, with their fancy accents, emotional reserve and public school demeanour as ‘naturals’ to play the part of the baddie.


Global Financial Crisis by Noah Berlatsky

accounting loophole / creative accounting, asset-backed security, banking crisis, Bretton Woods, capital controls, Celtic Tiger, centre right, circulation of elites, collapse of Lehman Brothers, collateralized debt obligation, corporate raider, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, Doha Development Round, energy security, eurozone crisis, financial innovation, Food sovereignty, George Akerlof, God and Mammon, Gordon Gekko, housing crisis, illegal immigration, income inequality, market bubble, market fundamentalism, mass immigration, moral hazard, new economy, Northern Rock, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, reserve currency, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, South China Sea, structural adjustment programs, too big to fail, trade liberalization, transfer pricing, working poor

He argues that while regulations would help, a moral transformation and a renunciation of greed is what is really needed. As you read, consider the following questions: 1. According to Oskari Juurikkala, what are derivatives? 2. What act does Juurikkala explain was passed after Enron to create a new layer of regulations? 3. According to Juurikkala, what really destroyed Enron? “G reed is good,” insisted Gordon Gekko in the 1987 film Wall Street. Most of us disagree. Recent events in the mortgage lending industry prove us right. The “subprime loan crisis” has been making headlines since it began in August [2007]. It refers to the fact that a relatively high percentage of mortgages offered to people with significant probability of default have gone sour. Oskari Juurikkala, “Greed Hurts: Causes of the Global Financial Crisis,” Acton Commentary, January 16, 2008.


pages: 202 words: 62,901

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism by Leigh Phillips, Michal Rozworski

Berlin Wall, Bernie Sanders, call centre, carbon footprint, central bank independence, Colonization of Mars, combinatorial explosion, complexity theory, computer age, corporate raider, decarbonisation, discovery of penicillin, Elon Musk, G4S, Georg Cantor, germ theory of disease, Gordon Gekko, greed is good, hiring and firing, index fund, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, invisible hand, Jeff Bezos, Joseph Schumpeter, linear programming, liquidity trap, mass immigration, Mont Pelerin Society, new economy, Norbert Wiener, oil shock, passive investing, Paul Samuelson, post scarcity, profit maximization, profit motive, purchasing power parity, recommendation engine, Ronald Coase, Ronald Reagan, sharing economy, Silicon Valley, Skype, sovereign wealth fund, strikebreaker, supply-chain management, technoutopianism, The Nature of the Firm, The Wealth of Nations by Adam Smith, theory of mind, transaction costs, Turing machine, union organizing

But the consensus among the business press and dozens of very bitter former executives is that the overriding cause of Sears’s malaise is the disastrous decision by the company’s chairman and CEO, Edward Lampert, to disaggregate the company’s different divisions into competing units: to create an internal market. From a capitalist perspective, the move appears to make sense. As business leaders never tire of telling us, the free market is the fount of all wealth in modern society. Competition between private companies is the primary driver of innovation, productivity and growth. Greed is good, per Gordon Gekko’s oft-quoted imperative from Wall Street. So one can be excused for wondering why it is, if the market is indeed as powerfully efficient and productive as they say, that all companies did not long ago adopt the market as an internal model. Lampert, libertarian and fan of the laissez-faire egotism of Russian American novelist Ayn Rand, had made his way from working in warehouses as a teenager, via a spell with Goldman Sachs, to managing a $15 billion hedge fund by the age of 41.


pages: 218 words: 62,889

Sabotage: The Financial System's Nasty Business by Anastasia Nesvetailova, Ronen Palan

algorithmic trading, bank run, banking crisis, barriers to entry, Basel III, Bernie Sanders, big-box store, bitcoin, Black-Scholes formula, blockchain, Blythe Masters, bonus culture, Bretton Woods, business process, collateralized debt obligation, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, distributed ledger, diversification, Double Irish / Dutch Sandwich, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial innovation, financial intermediation, financial repression, fixed income, gig economy, Gordon Gekko, high net worth, Hyman Minsky, information asymmetry, interest rate derivative, interest rate swap, Joseph Schumpeter, Kenneth Arrow, litecoin, London Interbank Offered Rate, London Whale, Long Term Capital Management, margin call, market fundamentalism, mortgage debt, new economy, Northern Rock, offshore financial centre, Paul Samuelson, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, price mechanism, regulatory arbitrage, rent-seeking, reserve currency, Ross Ulbricht, shareholder value, short selling, smart contracts, sovereign wealth fund, Thorstein Veblen, too big to fail

Junk bonds were used to finance the hugely ambitious corporate raiders and private equity firms.5 Through junk bond leverage buyouts, companies with poor ratings could acquire better-performing companies. In the deal the acquiring company would use the target companies’ funds to repay the debt it incurred to fund the takeover in the first place – ideally to Milken’s bank. Junk bonds became the weapon of choice of hostile raiders churning up and destroying companies in the process. A junk-financed buyout of a company would bring on job losses and restructuring.6 Gordon Gekko, the charismatic and ruthless character played by Michael Douglas in the movie Wall Street, is ‘part Milken’, according to one of the film’s producers. Drexel’s ability to swiftly raise vast sums for LBOs was lucrative. By 1986 Drexel was Wall Street’s most profitable firm and Milken its highest-paid executive: in 1986 the bank paid Milken nearly $295m ($665m in today’s money), the next year he was paid $550m (or more than $1.2bn today).7 But Drexel was feared and even loathed on Wall Street.


pages: 598 words: 169,194

Bernie Madoff, the Wizard of Lies: Inside the Infamous $65 Billion Swindle by Diana B. Henriques

accounting loophole / creative accounting, airport security, Albert Einstein, banking crisis, Bernie Madoff, break the buck, British Empire, buy and hold, centralized clearinghouse, collapse of Lehman Brothers, computerized trading, corporate raider, diversified portfolio, Donald Trump, dumpster diving, Edward Thorp, financial deregulation, financial thriller, fixed income, forensic accounting, Gordon Gekko, index fund, locking in a profit, mail merge, merger arbitrage, money market fund, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, random walk, Renaissance Technologies, riskless arbitrage, Ronald Reagan, short selling, Small Order Execution System, source of truth, sovereign wealth fund, too big to fail, transaction costs, traveling salesman

Over time, he invested about $620 million in actual cash and securities with Madoff. With Madoff’s steady rates of return, Picower’s account balances ultimately ran up into the billions of dollars. As early as 1986 he was wealthy enough to invest $28 million in an arbitrage fund run by Ivan Boesky, the notorious trader who boosted his fund’s profits illegally by buying tips from Wall Street insiders and who was the model for the Gordon Gekko character in Oliver Stone’s 1987 film Wall Street. By the late 1990s, Picower’s trading account at Goldman Sachs—almost certainly just one of his many Wall Street brokerage accounts—was reportedly worth $10 billion. At one point, he arranged a $5 billion margin loan in that account, which indicates he was so rich that Goldman knew that he could easily cover the loan if the market turned against him.

Lynch, Charles Colfer, and Tomas Kukla, “Flash: Rogerscasey’s Buy-Rated Hedge Fund Managers Have No Exposure to Madoff Investment Securities LLC,” Rogerscasey Inc. internal publication, December 2008. 132 Rogerscasey’s rating for the Madoff-related Tremont funds was “sell”: The warnings surfaced in the course of lawsuits filed in Colorado by Madoff victims against units of Fiserv that provided IRA custodial services to more than eight hundred retirement savings accounts invested with Madoff. 132 “The Madoff exposure is a potential disaster”: Lynch, Colfer, and Kukla, “Flash,” p. 2. 133 he invested about $620 million: Diana B. Henriques, “Deal Recovers $7.2 Billion for Madoff Fraud Victims,” New York Times, Dec. 17, 2010. 133 the model for the Gordon Gekko character in Oliver Stone’s 1987 film Wall Street: James B. Stewart, Den of Thieves (New York: Simon & Schuster, 1991), pp. 202–3. Stewart noted that a Boesky aide, Reid Nagle, “had no idea where Picower’s money came from; he occupied an unmarked office suite in an anonymous Manhattan tower.” 133 Picower’s trading account at Goldman Sachs: Henriques, “Deal Recovers $7.2 Billion,” and reporting notes made available to the author by her colleague Peter Lattman. 133 Available records show that Picower and his wife withdrew $390 million: Jake Bernstein, “Madoff Client Jeffry Picower Netted $5 Billion—Likely More Than Madoff Himself,” ProPublica.org, June 23, 2009 (subsequently updated), and the accompanying graphic, Dan Nguyen and Jake Bernstein, “Chart: The Picower-Madoff Transfers, from 1995–2008.” 135 a posthumous memoir called Leukemia for Chickens: Roger Madoff, Leukemia for Chickens: One Wimp’s Tale About Living Through Cancer (New York: privately published, 2007). 135 One hospital staff member would poignantly recall Peter gently rubbing ointment: Ibid., pp. 273–74.


pages: 267 words: 71,123

End This Depression Now! by Paul Krugman

airline deregulation, Asian financial crisis, asset-backed security, bank run, banking crisis, Bretton Woods, business cycle, capital asset pricing model, Carmen Reinhart, centre right, correlation does not imply causation, credit crunch, Credit Default Swap, currency manipulation / currency intervention, debt deflation, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, Financial Instability Hypothesis, full employment, German hyperinflation, Gordon Gekko, Hyman Minsky, income inequality, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Rogoff, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low skilled workers, Mark Zuckerberg, money market fund, moral hazard, mortgage debt, negative equity, paradox of thrift, Paul Samuelson, price stability, quantitative easing, rent-seeking, Robert Gordon, Ronald Reagan, Upton Sinclair, We are the 99%, working poor, Works Progress Administration

In the 1980s owners of savings and loans made big profits by taking big risks—then left taxpayers holding the bag. In the 2000s bankers did it again, amassing vast fortunes by making bad real estate loans and either selling them to unwitting investors or receiving a government bailout when crisis struck. But it’s also true of a lot of private equity, the business of buying companies, restructuring them, then selling them off again. (Gordon Gekko, in the movie Wall Street, was a private-equity player; Mitt Romney was one in real life.) To be fair, some private-equity firms have done valuable work by financing start-ups, in high-tech and elsewhere. In many other cases, however, profits have come from what Larry Summers—yes, that Larry Summers—called, in an influential paper of the same name, “breach of trust”: basically, breaking contracts and agreements.


pages: 274 words: 66,721

Double Entry: How the Merchants of Venice Shaped the Modern World - and How Their Invention Could Make or Break the Planet by Jane Gleeson-White

Affordable Care Act / Obamacare, Bernie Madoff, Black Swan, British Empire, business cycle, carbon footprint, corporate governance, credit crunch, double entry bookkeeping, full employment, Gordon Gekko, income inequality, invention of movable type, invention of writing, Islamic Golden Age, Johann Wolfgang von Goethe, Johannes Kepler, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, means of production, Naomi Klein, Nelson Mandela, Ponzi scheme, shareholder value, Silicon Valley, Simon Kuznets, source of truth, spice trade, spinning jenny, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, traveling salesman, upwardly mobile

It was to chart the glorious rise of accounting in the second half of the twentieth century to the lofty heights of the professional Olympus and then trace its collapse in the wake of scandals like Enron and WorldCom, and in Australia, HIH, One.Tel and ABC Learning. However, not only has no such fall ensued but it turns out that these accounting scandals are a regular feature in the landscape of accounting. They are as old as the profession itself, dating back to the earliest days of the formalised use of collective capital: the corporation. Corporations and accounting scandals go together like Gordon Gekko and greed. The nineteenth and early twentieth centuries are rife with corporate collapses of the magnitude of Enron’s and comparable in their elements. And they all stem from significant accounting misstatements orchestrated by influential senior managers. Equally, the responses of lawmakers and watchdogs have been the same over the past one hundred years: tinker around the edges of the law, found new watchdogs, proclaim a new era of greater scrutiny and let accountants and auditors out to play with the managers of vast sums of other people’s money.


pages: 272 words: 64,626

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs by Andy Kessler

23andMe, Andy Kessler, bank run, barriers to entry, Berlin Wall, Bob Noyce, British Empire, business cycle, business process, California gold rush, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, commoditize, computer age, creative destruction, disintermediation, Douglas Engelbart, Eugene Fama: efficient market hypothesis, fiat currency, Firefox, Fractional reserve banking, George Gilder, Gordon Gekko, greed is good, income inequality, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, libertarian paternalism, low skilled workers, Mark Zuckerberg, McMansion, Netflix Prize, packet switching, personalized medicine, pets.com, prediction markets, pre–internet, profit motive, race to the bottom, Richard Thaler, risk tolerance, risk-adjusted returns, Silicon Valley, six sigma, Skype, social graph, Steve Jobs, The Wealth of Nations by Adam Smith, transcontinental railway, transfer pricing, wealth creators, Yogi Berra

Markets value those profits and set the price for the enterprise so they can raise more money to grow. The stock market allocates precious capital to companies it thinks can maximize profits and starves those that can’t. In other words, the stock market is democracy’s half-evil henchman, whose tool is the size of the carrot, not the use of the stick. The tenets of capitalism’s great economists, from Adam Smith’s Invisible Hand to Joseph Schumpeter’s Creative Destruction and Gordon Gekko’s Greed Is Good, are all powerful concepts, but it’s profits and the stock market that carry out the dirty work. No Five-Year Plans. All men are created equal, but a few of you need to be canned and retrained so progress can happen again. New industries get funded and start hiring again. But which ones? The ones with the best prospects for profits. Remember, markets don’t create wealth. They allow for price discovery and for productivity to be priced into the value of companies.


pages: 234 words: 68,798

The Science of Storytelling: Why Stories Make Us Human, and How to Tell Them Better by Will Storr

David Brooks, Gordon Gekko, meta analysis, meta-analysis, Steven Pinker, theory of mind, Wall-E

How else is this ‘what if’ going to become a story that moves us and surprises us and feels as if it’s saying something real, if not by digging right down into the unique character of the protagonist? THE ARGUMENT Increasingly, writers come to the course who are angry about something that’s happening in the world. They want to write a story that highlights some perceived societal problem. Say you’re angry about the US healthcare system, so you decide to write a kind of healthcare version of Oliver Stone’s Wall Street. It centres on a Gordon Gekko type who ramps up the price of an essential medication. Fine. The risk is that, if you don’t do the necessary character work, ‘a healthcare version of Oliver Stone’s Wall Street’ is exactly what you’re going to end up with. No matter where your inspiration came from or what kind of story you want to write, I believe no harm can ever come from rewinding to character. All stories are ultimately about how people change and your story will be all the better for having a properly designed protagonist and principal characters, all of whom have plenty of potential to do just that.


pages: 276 words: 64,903

Built for Growth: How Builder Personality Shapes Your Business, Your Team, and Your Ability to Win by Chris Kuenne, John Danner

Airbnb, Amazon Web Services, Berlin Wall, Bob Noyce, business climate, call centre, cloud computing, disruptive innovation, don't be evil, Fall of the Berlin Wall, Gordon Gekko, Jeff Bezos, Kickstarter, Lean Startup, Mark Zuckerberg, pattern recognition, risk tolerance, Sand Hill Road, self-driving car, Silicon Valley, Steve Jobs, Steve Wozniak, supply-chain management, zero-sum game

It’s not that your sponsor necessarily expects your venture to be a clone of the existing business, but you do need to make sure to reflect the core values on which your company is based and by which the customers know it. Commissioning the Crusader: Finding Your Queen Isabella If you are a Crusader, your ideal financial sponsor is someone whose horizon matches your own vision, with the temperament and patient capital to boot. You need investors whose role is more like the one Queen Isabella played for Christopher Columbus than the rapacious one Gordon Gekko displayed with his portfolio companies in the movie Wall Street. In other words, you want a sponsor more interested in long-term development than in short-term profit. To some extent, there is always tension between an early-stage venture capitalist’s desire for a timely exit and a founder’s quest to build a long-term, successful enterprise that grows well after the early supporters have cashed out.


pages: 254 words: 68,133

The Age of Illusions: How America Squandered Its Cold War Victory by Andrew J. Bacevich

affirmative action, Affordable Care Act / Obamacare, anti-communist, Berlin Wall, Bernie Sanders, clean water, Columbian Exchange, Credit Default Swap, cuban missile crisis, David Brooks, deindustrialization, Donald Trump, Fall of the Berlin Wall, Francis Fukuyama: the end of history, friendly fire, gig economy, global village, Gordon Gekko, greed is good, illegal immigration, income inequality, Jeff Bezos, Kickstarter, Marshall McLuhan, mass incarceration, Mikhail Gorbachev, Monroe Doctrine, Norman Mailer, obamacare, Occupy movement, planetary scale, plutocrats, Plutocrats, Potemkin village, price stability, Project for a New American Century, Ronald Reagan, Ronald Reagan: Tear down this wall, Saturday Night Live, school choice, Silicon Valley, Thomas L Friedman, too big to fail, trickle-down economics, WikiLeaks

And during the 1980s, as if by acclamation, greed got the nod. Inverting the title of William Wyler’s Oscar-winning film of 1946, the journalist Barbara Ehrenreich surveyed the period and called it The Worst Years of Our Lives.5 If Wyler’s Best Years had seemed to capture the essence of the immediate postwar period, its 1980s counterpart was Oliver Stone’s Wall Street, released in 1987. Stone’s film centered on a cutthroat business executive, Gordon Gekko, who operated on the principle that “greed is good.” In comparison with Trump’s real-life brashness and extravagance, the celluloid Gekko looked like a piker. Like Gekko, however, Trump embodied values that seemed, at least for a moment, to express something essential about the United States. In October 1989, People magazine took a stab at explaining Trump’s standing in contemporary culture while hinting at its potential political implications.


pages: 218 words: 68,648

Confessions of a Crypto Millionaire: My Unlikely Escape From Corporate America by Dan Conway

Affordable Care Act / Obamacare, Airbnb, bank run, basic income, bitcoin, blockchain, buy and hold, cloud computing, cognitive dissonance, corporate governance, crowdsourcing, cryptocurrency, disruptive innovation, distributed ledger, double entry bookkeeping, Ethereum, ethereum blockchain, fault tolerance, financial independence, gig economy, Gordon Gekko, Haight Ashbury, high net worth, job satisfaction, litecoin, Marc Andreessen, Mitch Kapor, obamacare, offshore financial centre, Ponzi scheme, prediction markets, rent control, reserve currency, Ronald Coase, Satoshi Nakamoto, Silicon Valley, smart contracts, Steve Jobs, supercomputer in your pocket, Turing complete, Uber for X, universal basic income, upwardly mobile

Our average buy-in price was now $11.21. In total, we owned 26,750 ETH. Our total investment was more than $300,000. In crypto, everyone talks about whales, the ones with the massive number of coins. They are a mythical force, making loads of money by knowing what’s going to happen next. They move their huge stacks for maximum advantage while everyone else is in the dark. I always pictured them as Gordon Gekko or Mr. Robot. A mix of tech billionaires and cold-blooded traders, with maybe a few Russian oligarchs thrown in. I don’t think anyone thought it was a guy like me, sitting in his upstairs bedroom, buying more ETH than most people thought was prudent, then going downstairs and trying like hell to change the water filter in the refrigerator. Eileen walked into the kitchen just as I was ready to give up with the filter.


pages: 741 words: 179,454

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

affirmative action, Albert Einstein, algorithmic trading, Andy Kessler, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial independence, financial innovation, financial thriller, fixed income, full employment, global reserve currency, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, happiness index / gross national happiness, haute cuisine, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, job automation, Johann Wolfgang von Goethe, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, margin call, market bubble, market fundamentalism, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Mikhail Gorbachev, Milgram experiment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, plutocrats, Plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, survivorship bias, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

The banks that expected to refinance the bridge loans later found themselves stuck with loans. Drexel found itself tangled in a web of allegations and investigations into insider trading. In 1986, Dennis Levine, a Drexel investment banker, was charged with insider trading. Drexel traders joked: “Anybody who had to do 54 trades to make $12 million couldn’t be any good.”44 Levine implicated Ivan Boesky, the model for Gordon Gekko in the 1987 movie Wall Street. In 1986, Boesky had declared: “Greed is all right...greed is healthy. You can be greedy and still feel good about yourself.”45 Boesky saved himself by cooperating with the Securities and Exchange Commission (SEC) and informing on Milken. The SEC and Rudy Giuliani, the U.S. attorney for the Southern District of New York, launched wide-ranging investigations into Drexel’s operations.

Rupert Murdoch’s third wife, Wendy Deng, told a woman’s magazine that her husband, worth more than $8 billion, wore $9 shirts bought at U.S. discount store Wal-Mart. But Buffett and Murdoch also owned top-of-the-line business jets to ease the rigors of frequent business travel. The Physical Impossibility of Spending the Amount Earned by Someone Living Life imitated fiction as wealthy bankers mirrored Wall Street’s fictitious, art collecting villain—Gordon Gekko. Art was an alibi for networking, providing natural opportunities to meet members of the financial elite and identify deals. Hedge fund manager Steve Cohen was typical of new buyers who increasingly drove the market for high-end art. His $700 million art collection included Damien Hirst’s The Physical Impossibility of Death in the Mind of Someone Living. Given a net worth of $8 billion and an annual income of $500 million, the work cost a few days’ income: “after you have a fourth home and a [Gulfstream] G5 jet, what else is there?”


pages: 282 words: 26,931

The Five-Year Party: How Colleges Have Given Up on Educating Your Child and What You Can Do About It by Craig Brandon

Bernie Madoff, call centre, corporate raider, Donald Trump, en.wikipedia.org, Gordon Gekko, helicopter parent, impulse control, new economy, Ponzi scheme, Ralph Nader

This created a schism within the academic community, with one side advocating dumbing down the curriculum to the incoming students’ level to keep them in school and the other half demanding that rigorous standards be maintained, even if it meant a high percentage of students failed. This tended to break down along age lines, with the older professors defending academic standards and the younger ones advocating dumbing down the college. It was at this crucial point that a new kind of administrator began taking over the reins of power at American colleges. These new administrators had more in common with Gordon Gekko than they did with Aristotle. They were armed with degrees in business administration rather than in education and had backgrounds or at least training in subjects like marketing, public relations, and management. These new administrators saw that the real problem with colleges was that they were not being run like what they really were—businesses. To these new administrators, colleges were models of inefficiency because they refused to listen to the demands of their customers—the students—and were therefore always in danger of losing their market share to colleges that did a better job of customer relations.


pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"Robert Solow", accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, zero-sum game

Underperforming companies—those generating insufficient profits to satisfy shareholders—^were taken over, either by allegedly more competent rivals or by corporate raiders (or, as Alan Greenspan dubbed them at the time, "unaffiliated corporate restructurers"), or they were taken private by a management team in partnership with outside investors using lots of borrowed money. Regardless of the financial maneuver, the operational strategy was similar: shut or sell weak divisions, lay off workers, cut wages, break unions (where they existed), speed up the Hne, get the profit rate up. The moral philosophy of this period was nicely summed up by Oliver Stone's Gordon Gekko, channeUng the most famous inside trader of all time, Ivan Boesky: "Greed is good." Unfortunately, these maneuvers usually involved lots of debt, and the debt load proved crippHng by decade's end. So there was a shift of strategy toward shareholder activism. Led by large pension funds, particularly the CaHfornia PubHc Employees Retirement System (Calpers), institutional investors drew up hit lists of saggy companies, and pressed management to shape up or ship out.


pages: 280 words: 79,029

Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better by Andrew Palmer

Affordable Care Act / Obamacare, algorithmic trading, Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, Black-Scholes formula, bonus culture, break the buck, Bretton Woods, call centre, Carmen Reinhart, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Graeber, diversification, diversified portfolio, Edmond Halley, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, family office, financial deregulation, financial innovation, fixed income, Flash crash, Google Glasses, Gordon Gekko, high net worth, housing crisis, Hyman Minsky, implied volatility, income inequality, index fund, information asymmetry, Innovator's Dilemma, interest rate swap, Kenneth Rogoff, Kickstarter, late fees, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, margin call, Mark Zuckerberg, McMansion, money market fund, mortgage debt, mortgage tax deduction, Myron Scholes, negative equity, Network effects, Northern Rock, obamacare, payday loans, peer-to-peer lending, Peter Thiel, principal–agent problem, profit maximization, quantitative trading / quantitative finance, railway mania, randomized controlled trial, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Shiller, short selling, Silicon Valley, Silicon Valley startup, Skype, South Sea Bubble, sovereign wealth fund, statistical model, Thales of Miletus, transaction costs, Tunguska event, unbanked and underbanked, underbanked, Vanguard fund, web application

But there is nonetheless an echo of what went on in the mortgage industry—namely, the industrialization of credit, as the crunching of data enables lenders to make rapid decisions on risky borrowers without so much as a handshake. That bothers a lot of people. Many critics of banks look wistfully back to a golden age of finance, when the bank manager was the gateway to credit, when judgment prevailed over equation-filled models. This was a world of conservatism and integrity, where taxpayers slept easy in their beds and bankers were more Jimmy Stewart than Gordon Gekko. Since then, modern finance has evolved toward replacing decentralized judgment by mechanical process and substituting relationship lending with arms-length transactions. You can apply for loans online in minutes without speaking to anyone. Thanks to securitization, your mortgage may no longer be owned by the bank you got it from. The risks associated with extending your mortgage can be hedged on the basis of mathematical formulas.6 At first glance, it looks hard to argue against a relationship-­based approach to lending.


pages: 289 words: 77,532

The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders by Kate Kelly

Bakken shale, bank run, business cycle, Credit Default Swap, diversification, fixed income, Gordon Gekko, index fund, light touch regulation, locking in a profit, London Interbank Offered Rate, Long Term Capital Management, margin call, paper trading, peak oil, Ponzi scheme, risk tolerance, Ronald Reagan, side project, Silicon Valley, Sloane Ranger, sovereign wealth fund, supply-chain management, the market place

Like Pierre Andurand, Ruggles had grown up with a liberal-minded father who was suspicious of financiers. The indoctrination was worse for Ruggles, though: his father was a professor of finance in Ohio and had actually researched the system as part of his living. In 1987, his father took him to see the movie Wall Street, the portrait of corporate greed starring Charlie Sheen as an ambitious young stock trader and Michael Douglas as Gordon Gekko, his sleazy, amoral business mentor. “We left the movie and we had very, very different views,” Ruggles remembers. “I had a hard time understanding that Gekko was the bad guy. I’m thinking, ‘This is what I want to do when I grow up.’” After graduating from what he joked was “the 200th best high school in Ohio” in the depressed steel town of Youngstown, Ruggles attended the University of Michigan, where he remembers maintaining a 4.0 for a while.


pages: 244 words: 79,044

Money Mavericks: Confessions of a Hedge Fund Manager by Lars Kroijer

activist fund / activist shareholder / activist investor, Bernie Madoff, capital asset pricing model, corporate raider, diversification, diversified portfolio, family office, fixed income, forensic accounting, Gordon Gekko, hiring and firing, implied volatility, index fund, intangible asset, Jeff Bezos, Just-in-time delivery, Long Term Capital Management, merger arbitrage, NetJets, new economy, Ponzi scheme, post-work, risk-adjusted returns, risk/return, shareholder value, Silicon Valley, six sigma, statistical arbitrage, Vanguard fund, zero-coupon bond

Our first meeting was with David Totti. Mr Totti had been a senior partner at Lazard Frères, although we didn’t know each other. He was one of those people we minions knew to fear. He had since left Lazard and set up his own wealth-management firm next door. Entering Mr Totti’s lavish office, I thought I was in the movie Wall Street. Although I had heard of him terrorising associates, I had not imagined the mirror image of Gordon Gekko. At Lazard, he did not even deal with us analysts, who were one step too low for consideration, but left it to the associates, and I had therefore never met him. I felt as if he ought to launch into a tirade of abuse, calling me a useless piece of shit and how his two-year-old grandchild could do better financial models than me. You know. The usual stuff. He gave us the look of someone who had seen too many young Turks pass through his office, and asked me if I was friends with Felix Rohatyn and Steve Rattner.


pages: 602 words: 207,965

Practical Ext JS Projects With Gears by Frank Zammetti

a long time ago in a galaxy far, far away, Albert Einstein, corporate raider, create, read, update, delete, database schema, en.wikipedia.org, Firefox, full text search, Gordon Gekko, Kickstarter, Larry Wall, loose coupling, Ronald Reagan, web application

We also got to see the Gears WorkerPool in action, allowing us to implement an efficient multithreading mechanism in JavaScript. In the next chapter, the final chapter of this book, we’ve put together an application for tracking our finances that will allow us to see a few new capabilities that we haven’t seen before, including the charting capabilities Ext JS provides. Stick around—the final adventure is about to begin! 495 CHAP TER 9 Managing Your Finances: Finance Master t o quote the immortal words of Gordon Gekko:1 “Greed, for lack of a better word, is good.” Greed probably most frequently comes in the form of money, so therefore money is good. A big part of making money is simply being able to track your assets and liabilities and understand where your money is and how it’s working for you in terms of return on investments. With that in mind, the final project in this book is my special gift to you: a tool that will not only teach you more about Ext JS but will, hopefully, assist you in making boatloads of money.

What’s this application do anyway? There are some top-notch financial tracking/planning software products out there. Quicken is probably the most well-known name. That product is developed by a team of dedicated engineers and has been developed over a very long period of time to be the polished, powerful solution it is today. At the end of the day, however, it all comes down to the relatively simple 1 Gordon Gekko is the main antagonist in the classic movie Wall Street. Gordon, a corporate raider played by Michael Douglas, embodies all that was wrong with those involved in the stock market in the 80s (and now too it seems!). 497 498 Ch apt er 9 n Ma Na G ING YOU r FINa NC eS : F I N a N C e M a S t e r concept of a diary2 for your money! That’s exactly what Finance Master is. It won’t tell you how to invest your money and it won’t balance your checkbook or simulate investment scenarios.


pages: 686 words: 201,972

Drink: A Cultural History of Alcohol by Iain Gately

barriers to entry, British Empire, California gold rush, corporate raider, delayed gratification, Deng Xiaoping, Edward Lloyd's coffeehouse, Fellow of the Royal Society, Gordon Gekko, greed is good, Haight Ashbury, Hernando de Soto, imperial preference, invisible hand, joint-stock company, Jones Act, Louis Pasteur, megacity, music of the spheres, Norman Mailer, Peace of Westphalia, post-work, refrigerator car, Ronald Reagan, South Sea Bubble, spice trade, strikebreaker, the scientific method, Tim Cook: Apple, trade route, traveling salesman, Upton Sinclair, V2 rocket, working poor

The new ethos was apparent in the 1985 movie Wall Street, a Faustian tale about Bud, a young stockbroker eager to share in the immense fortunes being made in the markets at that time. Bud solicits the attention of Gordon Gekko, a corporate raider, who epitomizes the new model capitalist. “Lunch is for wimps,” he declares at their first encounter, and Bud pointedly calls for Evian when he meets Gekko in a restaurant at night. The old order is represented by Bud’s father, a union leader at Bluestar Airlines, who does his business with the men he represents over a few beers in the local bar. Gekko aims to take over Bluestar in order to break it into pieces and rob its pension fund, and Bud is forced to choose between old-fashioned beer-drinking, metal-bashing America and the greed-is-good philosophy of Gordon Gekko. After a bottle of whiskey he decides to do the right thing—intoxication leads to an epiphany that restores his moral perspective.


pages: 270 words: 79,992

The End of Big: How the Internet Makes David the New Goliath by Nicco Mele

4chan, A Declaration of the Independence of Cyberspace, Airbnb, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, Apple's 1984 Super Bowl advert, barriers to entry, Berlin Wall, big-box store, bitcoin, business climate, call centre, Cass Sunstein, centralized clearinghouse, Chelsea Manning, citizen journalism, cloud computing, collaborative consumption, collaborative editing, commoditize, creative destruction, crony capitalism, cross-subsidies, crowdsourcing, David Brooks, death of newspapers, disruptive innovation, Donald Trump, Douglas Engelbart, Douglas Engelbart, en.wikipedia.org, Exxon Valdez, Fall of the Berlin Wall, Filter Bubble, Firefox, global supply chain, Google Chrome, Gordon Gekko, Hacker Ethic, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, Julian Assange, Kevin Kelly, Khan Academy, Kickstarter, Lean Startup, Mark Zuckerberg, minimum viable product, Mitch Kapor, Mohammed Bouazizi, Mother of all demos, Narrative Science, new economy, Occupy movement, old-boy network, peer-to-peer, period drama, Peter Thiel, pirate software, publication bias, Robert Metcalfe, Ronald Reagan, Ronald Reagan: Tear down this wall, sharing economy, Silicon Valley, Skype, social web, Steve Jobs, Steve Wozniak, Stewart Brand, Stuxnet, Ted Nelson, Telecommunications Act of 1996, telemarketer, The Wisdom of Crowds, transaction costs, uranium enrichment, Whole Earth Catalog, WikiLeaks, Zipcar

We have frequently in our history relied upon high-quality, big productions to help us work through pressing social and political issues. The 1967 film Guess Who’s Coming to Dinner offered a compelling view of interracial marriage, which at the time was intensely controversial (the year of the film’s release, interracial marriage was illegal in seventeen U.S. states). Oliver Stone’s 1987 movie Wall Street opened up a public discussion about corporate greed, so much so that the lead character, Gordon Gekko, is frequently mentioned in the context of the current financial crisis. Films and books (like Harper Lee’s To Kill a Mockingbird) and songs (like Creedence Clearwater Revival’s “Fortunate Son”) that offer a meaningful critique of our culture help us progress and push the ball forward. Radical connectivity allows creative criticism of our culture to “go viral,” but such criticism doesn’t have the staying power of a big, blockbuster film or novel that changes the way a generation thinks about a subject or a topic.


pages: 252 words: 78,780

Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us by Dan Lyons

Airbnb, Amazon Web Services, Apple II, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, business process, call centre, Clayton Christensen, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, cryptocurrency, David Heinemeier Hansson, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, full employment, future of work, gig economy, Gordon Gekko, greed is good, hiring and firing, housing crisis, income inequality, informal economy, Jeff Bezos, job automation, job satisfaction, job-hopping, John Gruber, Joseph Schumpeter, Kevin Kelly, knowledge worker, Lean Startup, loose coupling, Lyft, Marc Andreessen, Mark Zuckerberg, McMansion, Menlo Park, Milgram experiment, minimum viable product, Mitch Kapor, move fast and break things, move fast and break things, new economy, Panopticon Jeremy Bentham, Paul Graham, paypal mafia, Peter Thiel, plutocrats, Plutocrats, precariat, RAND corporation, remote working, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, Ruby on Rails, Sam Altman, Sand Hill Road, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, Skype, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, Stanford prison experiment, stem cell, Steve Jobs, Steve Wozniak, Stewart Brand, TaskRabbit, telemarketer, Tesla Model S, Thomas Davenport, Tony Hsieh, Toyota Production System, traveling salesman, Travis Kalanick, tulip mania, Uber and Lyft, Uber for X, uber lyft, universal basic income, web application, Whole Earth Catalog, Y Combinator, young professional

The movement represents a counterweight to the shareholder-centric ideas that Milton Friedman proposed in his essay in the New York Times Magazine back in 1970 and aims to undo a half century of corporate capitalism that has produced so many toxic, dysfunctional outcomes. Oddly enough, the social enterprise movement originated in business schools—the same places that were preaching the bible of Milton Friedman and producing miniature Gordon Gekkos for investment banks and management consulting firms. Terms like social enterprise and social entrepreneurship started kicking around in the 1970s, which was just as the Friedman doctrine began to be taught in business schools. That is probably not a coincidence. Nor is the fact that interest in social enterprise has suddenly soared in the past ten years, a period when the problems created by shareholder capitalism have become acute.


pages: 296 words: 78,112

Devil's Bargain: Steve Bannon, Donald Trump, and the Storming of the Presidency by Joshua Green

4chan, Affordable Care Act / Obamacare, Ayatollah Khomeini, Bernie Sanders, business climate, centre right, Charles Lindbergh, coherent worldview, collateralized debt obligation, conceptual framework, corporate raider, crony capitalism, currency manipulation / currency intervention, Donald Trump, Fractional reserve banking, Goldman Sachs: Vampire Squid, Gordon Gekko, guest worker program, illegal immigration, immigration reform, liberation theology, low skilled workers, Nate Silver, Nelson Mandela, nuclear winter, obamacare, Peace of Westphalia, Peter Thiel, quantitative hedge fund, Renaissance Technologies, Robert Mercer, Ronald Reagan, Silicon Valley, social intelligence, speech recognition, urban planning

Thirty years later, Bannon could still summon the details of Kennedy’s no-bullshit pitch to the HBS students for a Goldman Sachs that was then still a close-knit, privately held partnership. “He says, ‘We’re a very hard-working place. There are no stretch limos outside. We’re very middle class. We work very hard. It’s all about the firm. It’s about partnership. It’s about teamwork. What we’re going to do is have an open bar, and we’d like all of you to come and have a drink with us.’ It sounded perfect to me. It wasn’t Gordon Gekko. I thought to myself, I gotta do this.” The next day, Bannon put on his best suit and headed over to the Goldman recruiting party, hoping to somehow inveigle his way into getting an interview. “I get there, and there’s like seven hundred people jammed into this tent,” he said. “I said, ‘Fuck it. There’s no chance.’” With practically his entire class jockeying to make an impression on the recruiters, Bannon calculated that the odds were impossible for him.


pages: 289 words: 87,292

The Strange Order of Things: The Biological Roots of Culture by Antonio Damasio

Albert Einstein, biofilm, business process, Daniel Kahneman / Amos Tversky, double helix, Gordon Gekko, invention of the wheel, invention of writing, invisible hand, job automation, mental accounting, meta analysis, meta-analysis, microbiome, Norbert Wiener, pattern recognition, Peter Singer: altruism, planetary scale, profit motive, Ray Kurzweil, Richard Feynman, self-driving car, Silicon Valley, Steven Pinker, Thomas Malthus

Those cells that really succeed in life are good at generating positive energy balances, that is, “profits.” But the fact that profit is natural and generally beneficial does not make it necessarily good, culturally speaking. Cultures can decide when natural things are good—and determine the degree of goodness—and when they are not. Greed is just as natural as profit but is not culturally good, contrary to what Gordon Gekko famously affirmed.2 — The most strangely ordered emergences of high faculties are probably feeling and consciousness. It is not unreasonable—just incorrect—to imagine that the mental refinement we know as feelings would have arisen from the most advanced creatures in evolution, if not from humans alone. The same applies to consciousness. Subjectivity, the hallmark of consciousness, is the ability to own one’s mental experiences and endow those experiences with an individual perspective.


pages: 280 words: 82,623

What Got You Here Won't Get You There: How Successful People Become Even More Successful by Marshall Goldsmith, Mark Reiter

business process, cognitive dissonance, financial independence, fixed income, Gordon Gekko, high net worth, knowledge worker, loss aversion, shareholder value, zero-sum game

But it’s also possible that it’s true, that you’re saying something piercingly honest about yourself which you’re not yet admitting: You don’t thank well. As I say, I don’t want to twist every comment we hear and make into knots. But self-deprecation, pseudo or otherwise, can be one of those honest feedback moments that makes a signal sound in our brain. “Pay attention,” it tells us. “This might be something worth observing.” 5. Look homeward. Remember the movie Wall Street and the character Gordon Gekko? Michael Douglas won an Academy Award for Best Actor for his portrayal of this rude, larcenous wheeler-dealer. Well, I worked with a real-life investment banker who could have inspired the Gekko character. The man I coached—let’s call him Mike—wasn’t amoral and unethical like Gekko, but he had some competitive fires burning within his soul that made him treat people like gravel in a driveway.


pages: 274 words: 81,008

The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything by Jason Kelly

activist fund / activist shareholder / activist investor, barriers to entry, Berlin Wall, call centre, carried interest, collective bargaining, corporate governance, corporate raider, Credit Default Swap, diversification, Fall of the Berlin Wall, family office, fixed income, Goldman Sachs: Vampire Squid, Gordon Gekko, housing crisis, income inequality, late capitalism, margin call, Menlo Park, Occupy movement, place-making, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Rubik’s Cube, Sand Hill Road, shareholder value, side project, Silicon Valley, sovereign wealth fund

Initially, Schwarzman asked Hill to conduct a search for a new person to run what was then known as Blackstone Alternative Asset Management, or BAAM. He gave him six months. After three, Hill realized it could be a big business and told his boss so. Schwarzman asked Hill if he wanted to just run it himself. Hill, with his Harvard credentials and Lehman pedigree, looks the part of an investment banker. There’s long been a rumor on Wall Street that at least the physical elements of the Gordon Gekko character in the seminal movie Wall Street were based on Hill, who is an impeccable dresser and slicks his hair back to this day. He has built a similarly pedigreed group—seeing them in a room is like walking into a living Brooks Brothers calendar—that is charged with taking big slugs of money for clients and picking hedge funds based on their appetite for risk. Blackstone has access to managers across the spectrum of hedge funds, from so-called macro funds to those who describe themselves as “event driven,” that is, focused on trades around something like a merger or acquisition.


pages: 336 words: 90,749

How to Fix Copyright by William Patry

A Declaration of the Independence of Cyberspace, barriers to entry, big-box store, borderless world, business cycle, business intelligence, citizen journalism, cloud computing, commoditize, creative destruction, crowdsourcing, death of newspapers, en.wikipedia.org, facts on the ground, Frederick Winslow Taylor, George Akerlof, Gordon Gekko, haute cuisine, informal economy, invisible hand, Joseph Schumpeter, Kickstarter, knowledge economy, lone genius, means of production, moral panic, new economy, road to serfdom, Ronald Coase, Ronald Reagan, semantic web, shareholder value, Silicon Valley, The Chicago School, The Wealth of Nations by Adam Smith, trade route, transaction costs, trickle-down economics, winner-take-all economy, zero-sum game

Copyright Office observed, “licensors have rarely turned down the opportunity in the digital age to seek royalties, even when the basis for their requests is weak at best. Online music companies rightly complain that they need certainty over what rights are implicated and what royalties are payable so that they can operate without fear of being sued for copyright infringement.”15 Greed is not good, as Michael Douglas’s character Gordon Gekko once argued in the movie Wall Street. Obstructionists in the music industry would do well to follow the advice of another movie character: actor Alec Baldwin’s character’s Blake in David Mamet’s 1992 film Glengarry Glen Ross. Sent in by corporate headquarters to motivate real estate salesmen, he harangues them about going after prospective buyers: “They’re sitting out there waiting to give you their money.


pages: 318 words: 87,570

Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street Are Destroying Investor Confidence and Your Portfolio by Sal Arnuk, Joseph Saluzzi

algorithmic trading, automated trading system, Bernie Madoff, buttonwood tree, buy and hold, commoditize, computerized trading, corporate governance, cuban missile crisis, financial innovation, Flash crash, Gordon Gekko, High speed trading, latency arbitrage, locking in a profit, Mark Zuckerberg, market fragmentation, Ponzi scheme, price discovery process, price mechanism, price stability, Sergey Aleynikov, Sharpe ratio, short selling, Small Order Execution System, statistical arbitrage, stocks for the long run, stocks for the long term, transaction costs, two-sided market, zero-sum game

Considering that exchanges are based around the world, a recent MIT study found that the ultimate site may be in the middle of the Atlantic Ocean.14 Some exchanges make sure that each colocated customer receives equal amounts of connecting cable so that a server at the northeast corner of a facility has the same latency as one at the southwest.15 It appears that “fairness” and the equalization of market data speed among colocated firms is a critical “must” for the exchanges, but not so when it comes to institutional and retail investors. Private Data Feeds In the 1987 movie Wall Street, insider trader Gordon Gekko tells aspiring broker Bud Fox that “the most valuable commodity I know of is information.”16 This is still true today, particularly for the stock exchanges. Private data feeds consolidate an enormous amount of information and transmit it at speeds faster than the consolidated quote system. Exchanges say they make these feeds available to everyone. Realistically, only those with the most sophisticated technology and programmers can use them.


Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi

addicted to oil, affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, Bretton Woods, buy and hold, carried interest, clean water, collateralized debt obligation, collective bargaining, computerized trading, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, desegregation, diversification, diversified portfolio, Donald Trump, financial innovation, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, illegal immigration, interest rate swap, laissez-faire capitalism, London Interbank Offered Rate, Long Term Capital Management, margin call, market bubble, medical malpractice, money market fund, moral hazard, mortgage debt, obamacare, passive investing, Ponzi scheme, prediction markets, quantitative easing, reserve currency, Ronald Reagan, Sergey Aleynikov, short selling, sovereign wealth fund, too big to fail, trickle-down economics, Y2K, Yom Kippur War

A being who does not hold his own life as the motive and goal of his actions, is acting on the motive and standard of death. Such a being is a metaphysical monstrosity, struggling to oppose, negate and contradict the fact of his own existence, running blindly amuck on a trail of destruction, capable of nothing but pain. This is pure social Darwinism: self-interest is moral, interference (particularly governmental interference) with self-interest is evil, a fancy version of the Gordon Gekko pabulum that “greed is good.” When you dig deeper into Rand’s philosophy, you keep coming up with more of the same. Rand’s belief system is typically broken down into four parts: metaphysics (objective reality), epistemology (reason), ethics (self-interest), and politics (capitalism). The first two parts are basically pure bullshit and fluff. According to objectivists, the belief in “objective reality” means that “facts are facts” and “wishing” won’t make facts change.


pages: 265 words: 93,231

The Big Short: Inside the Doomsday Machine by Michael Lewis

Asperger Syndrome, asset-backed security, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, diversified portfolio, facts on the ground, financial innovation, fixed income, forensic accounting, Gordon Gekko, high net worth, housing crisis, illegal immigration, income inequality, index fund, interest rate swap, John Meriwether, London Interbank Offered Rate, Long Term Capital Management, medical residency, money market fund, moral hazard, mortgage debt, pets.com, Ponzi scheme, Potemkin village, quantitative trading / quantitative finance, Robert Bork, short selling, Silicon Valley, the new new thing, too big to fail, value at risk, Vanguard fund, zero-sum game

Still, if a team of experts had set out to create a human being to maximize the likelihood that he would terrify a Wall Street customer, they might have designed something like Lippmann. He traded bonds for Deutsche Bank, but, like most people who traded bonds for Deutsche Bank--or for Credit Suisse or UBS or one of the other big foreign banks that had purchased a toehold in the U.S. financial markets--he was an American. Thin and tightly wound, he spoke too quickly for anyone to follow exactly what he was saying. He wore his hair slicked back, in the manner of Gordon Gekko, and the sideburns long, in the fashion of an 1820s Romantic composer or a 1970s porn star. He wore loud ties, and said outrageous things without the slightest apparent awareness of how they might sound if repeated unsympathetically. He peppered his conversation with cryptic references to how much money he made, for instance. People on Wall Street had long ago learned that their bonuses were the last thing they should talk about with people off Wall Street.


pages: 354 words: 93,882

How to Be Idle by Tom Hodgkinson

Albert Einstein, Alexander Shulgin, Bertrand Russell: In Praise of Idleness, call centre, David Attenborough, David Brooks, deskilling, financial independence, full employment, Gordon Gekko, James Hargreaves, James Watt: steam engine, Lao Tzu, liberal capitalism, moral panic, New Urbanism, PIHKAL and TIHKAL, spinning jenny, Torches of Freedom, trade route, wage slave

As well as considerations of a humanitarian nature, he should recognize that the function of food is to give the worker' s body an injection of energy which will allow him to replenish that consumed by physical and mental effort, and to achieve and maintain as high a point as possible in the production curve, which as we know descends quickly when the worker has exhausted his reserves of energy. The sacrifice of food to work reaches its apotheosis in the 1 980s. In Oliver Stone ' s movie Wall Street, thrusting broker Gordon Gekko utters the immortal line: ' Lunch? You gotta be kidding. Lunch is for wimps. ' Lunch meant wasting an hour which could be better spent working. Sociability and pleasure were off the menu. Lunch had been sacrificed to the great gods of work, progress and ' beating the other guy ' . No one has the time to eat at leisure, it seems. It' s a common sight to see people snaffling down a burger or sandwich between stops on the underground.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

activist fund / activist shareholder / activist investor, Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, God and Mammon, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, labour market flexibility, liberal capitalism, light touch regulation, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, mass immigration, means of production, Menlo Park, money market fund, moral hazard, moveable type in China, Myron Scholes, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Paul Samuelson, plutocrats, Plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, Veblen good, We are the 99%, Wolfgang Streeck, zero-sum game

It suffered from the flaw that in a society marked by an uneven distribution of income favouring a numerically small elite, the rich had plenty of spending power to satisfy their desires, but not enough buying power to dynamise the economy to its full potential to raise real incomes.8 The German sociologist and economist Werner Sombart nonetheless argued two centuries later that luxury played an important part in the development of capitalism. 9 And Mandeville’s point has trickled down through history. To name just one example, Gordon Gekko’s ‘greed is good’ speech in the film Wall Street clearly descends in a direct line from the author of the fable. The Fable of the Bees was not universally admired by other Enlightenment thinkers. Adam Smith could not bring himself to accept the extremity of Mandeville’s paradox, in which vice was a necessary condition of prosperity. In his justly celebrated redefinition of the boundaries of the argument about business and morality, he emphasised self-interest rather than vice, with his statement in The Wealth of Nations that ‘it is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard for their own interest’. 10 In much the same vein, he added: ‘I have never known much good done by those who affected to trade for the public good.’11 Yet, as the author of The Theory of Moral Sentiments, he also emphasised the need for markets to operate within a moral context and believed that the act of engaging in market exchange entailed a discipline that encouraged good individual behaviour as well as the good of wider society.


pages: 312 words: 93,836

Barometer of Fear: An Insider's Account of Rogue Trading and the Greatest Banking Scandal in History by Alexis Stenfors

Asian financial crisis, asset-backed security, bank run, banking crisis, Big bang: deregulation of the City of London, bonus culture, capital controls, collapse of Lehman Brothers, credit crunch, Credit Default Swap, Eugene Fama: efficient market hypothesis, eurozone crisis, financial deregulation, financial innovation, fixed income, game design, Gordon Gekko, inflation targeting, information asymmetry, interest rate derivative, interest rate swap, London Interbank Offered Rate, loss aversion, mental accounting, millennium bug, Nick Leeson, Northern Rock, oil shock, price stability, profit maximization, regulatory arbitrage, reserve currency, Rubik’s Cube, Snapchat, the market place, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, Y2K

‘Many people, not only traders, can relate to the drama and characters in these stories, otherwise they would not be such universally popular films. They deal with power, guilt, humanity and morality, as in much of literature – in Dostoyevsky, Kafka … or in Heinrich Böll’s books, to mention one of my favourite German writers.’ To me, asking traders or rogue traders whether they identified themselves with Bud Fox or Gordon Gekko was like asking a policewoman whether she identified herself with Sarah Lund in The Killing or a policeman with Kurt Wallander in one of Henning Mankell’s crime novels. The interview never made it to print. I could have elaborated much more in my answer to the question, which was cleverly phrased to prompt me into explaining what really goes on in the mind of a rogue trader. Who do rogue traders see as their mentors, sources of inspiration and role models?


pages: 269 words: 104,430

Carjacked: The Culture of the Automobile and Its Effect on Our Lives by Catherine Lutz, Anne Lutz Fernandez

barriers to entry, car-free, carbon footprint, collateralized debt obligation, failed state, feminist movement, fudge factor, Gordon Gekko, housing crisis, illegal immigration, income inequality, inventory management, market design, market fundamentalism, mortgage tax deduction, Naomi Klein, Nate Silver, New Urbanism, oil shock, peak oil, Ralph Nader, Ralph Waldo Emerson, ride hailing / ride sharing, Thorstein Veblen, traffic fines, Unsafe at Any Speed, urban planning, white flight, women in the workforce, working poor, Zipcar

Meanwhile, Cerberus Capital, the private equity firm that bought Chrysler in 2007, escapes,49 while the American public is likely on the hook for ten billion or more.50 And the much larger and far more costly General Motors restructuring resulted in the U.S. taxpayers’ owning a majority of the company’s stock, a $50 billion investment so risky no one else would take it. HEDGE FUND HANDS IN OUR POCKETS In the auto sector, as elsewhere in American business, manufacturing is no longer seen as the royal road to riches. Eerily echoing the reviled Gordon Gekko of Oliver Stone’s morality tale Wall Street, Ray Diallo, founder of hedge fund Bridgewater Associates, noted, “The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around.” 2007 was the year many first learned 124 Carjacked the terms “predatory lending” and “hedge fund,” both of which have come to hit American car owners, not just home owners, with a vengeance.


pages: 353 words: 98,267

The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

Alvin Roth, Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, longitudinal study, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Monkeys Reject Unequal Pay, new economy, New Urbanism, peer-to-peer, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

Today, they get to take home almost a quarter. That amounts to very few elephant seals eating all the fish. FARMERS AND FINANCIERS The biggest seals work for banks. Banks pay enormous bonuses to draw the brightest MBAs or quantum physicists. These bright financiers, in turn, invent the fancy new products that make banking one of the most profitable endeavors in the world. Remember the eighties? Gordon Gekko sashayed across the silver screen. Ivan Boesky was jailed for insider trading. Michael Milken peddled junk bonds. In 1987 financial firms amassed a little less than a fifth of the profits of all American corporations. Wall Street bonuses totaled $2.6 billion—about $15,600 for each man and woman working there. Today, this looks like a piddling sum. By 2007 finance accounted for a full third of the profits of the nation’s private sector.


pages: 336 words: 95,773

The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future by Joseph C. Sternberg

Affordable Care Act / Obamacare, Airbnb, American Legislative Exchange Council, Asian financial crisis, banking crisis, Basel III, Bernie Sanders, blue-collar work, centre right, corporate raider, Detroit bankruptcy, Donald Trump, Edward Glaeser, employer provided health coverage, Erik Brynjolfsson, eurozone crisis, future of work, gig economy, Gordon Gekko, hiring and firing, Home mortgage interest deduction, housing crisis, job satisfaction, job-hopping, labor-force participation, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, minimum wage unemployment, mortgage debt, mortgage tax deduction, Nate Silver, new economy, obamacare, oil shock, payday loans, pension reform, quantitative easing, Richard Florida, Ronald Reagan, Saturday Night Live, Second Machine Age, sharing economy, Silicon Valley, sovereign wealth fund, TaskRabbit, total factor productivity, Tyler Cowen: Great Stagnation, uber lyft, unpaid internship, women in the workforce

Despite a bumper year in 1983 as the economy roared back from its recessionary malaise, fixed investment grew by an average of only 4.1 percent per year between 1983 and 1990—higher than the doldrums of the late 1970s and early ’80s, to be sure, but far off America’s mid-century investment peak. Output per hour worked grew a relatively sluggish 1.9 percent per year during this span.18 Instead, falling borrowing costs, as America emerged from the stagflationary 1970s and the high interest rates of the early 1980s, and low taxation on capital created a new boom in financial engineering: leveraged buy-outs, mergers and acquisitions, and other Gordon Gekko–like techniques. The basic principle was that companies would use cheap credit to borrow heavily against their assets and expected future revenue and then use the money either to buy other companies or to buy back the company’s own stock. Interest payments on the debt would then become tax-deductible, reducing the company’s effective tax burden under America’s relatively high corporate tax rates.


pages: 417 words: 97,577

The Myth of Capitalism: Monopolies and the Death of Competition by Jonathan Tepper

Affordable Care Act / Obamacare, air freight, Airbnb, airline deregulation, bank run, barriers to entry, Berlin Wall, Bernie Sanders, big-box store, Bob Noyce, business cycle, Capital in the Twenty-First Century by Thomas Piketty, citizen journalism, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, computer age, corporate raider, creative destruction, Credit Default Swap, crony capitalism, diversification, don't be evil, Donald Trump, Double Irish / Dutch Sandwich, Edward Snowden, Elon Musk, en.wikipedia.org, eurozone crisis, Fall of the Berlin Wall, family office, financial innovation, full employment, German hyperinflation, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, Google bus, Google Chrome, Gordon Gekko, income inequality, index fund, Innovator's Dilemma, intangible asset, invisible hand, Jeff Bezos, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Rogoff, late capitalism, London Interbank Offered Rate, low skilled workers, Mark Zuckerberg, Martin Wolf, means of production, merger arbitrage, Metcalfe's law, multi-sided market, mutually assured destruction, Nash equilibrium, Network effects, new economy, Northern Rock, offshore financial centre, passive investing, patent troll, Peter Thiel, plutocrats, Plutocrats, prediction markets, prisoner's dilemma, race to the bottom, rent-seeking, road to serfdom, Robert Bork, Ronald Reagan, Sam Peltzman, secular stagnation, shareholder value, Silicon Valley, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, undersea cable, Vanguard fund, very high income, wikimedia commons, William Shockley: the traitorous eight, zero-sum game

The stock market boomed as it had not since the 1920s, and not even the 1987 Crash could contain the enthusiasm for deals. The Reagan presidency let loose the animal spirits in markets. Diana Vreeland, the stylish editor of Harpers Bazaar and friend of Nancy Reagan, said of the times, “Everything is power and money and how to use them both … We mustn't be afraid of snobbism and luxury.”60 Right around the time of the Crash, the film Wall Street captured the feeling of the era. In a memorable scene, Gordon Gekko wants to buy a company and rises to speak to the shareholders: The point is, ladies and gentleman, that greed – for lack of a better word – is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind. And greed – you mark my words – will not only save Teldar Paper, but that other malfunctioning corporation called the USA.


pages: 383 words: 108,266

Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions by Dan Ariely

air freight, Al Roth, Bernie Madoff, Burning Man, butterfly effect, Cass Sunstein, collateralized debt obligation, computer vision, corporate governance, credit crunch, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, endowment effect, financial innovation, fudge factor, Gordon Gekko, greed is good, housing crisis, IKEA effect, invisible hand, lake wobegon effect, late fees, loss aversion, market bubble, Murray Gell-Mann, payday loans, placebo effect, price anchoring, Richard Thaler, second-price auction, Silicon Valley, Skype, The Wealth of Nations by Adam Smith, Upton Sinclair

The scary thought is that if we did the experiments with nonmonetary currencies that were not as immediately convertible into money as tokens, or with individuals who cared less about their honesty, or with behavior that was not so publicly observable, we would most likely have found even higher levels of dishonesty. In other words, the level of deception we observed here is probably an underestimation of the level of deception we would find across a variety of circumstances and individuals. Now suppose that you have a company or a division of a company led by a Gordon Gekko character who declares that “greed is good.” And suppose he used nonmonetary means of encouraging dishonesty. Can you see how such a swashbuckler could change the mind-set of people who in principle want to be honest and want to see themselves as honest, but also want to hold on to their jobs and get ahead in the world? It is under just such circumstances that nonmonetary currencies can lead us astray.


pages: 414 words: 108,413

King Icahn: The Biography of a Renegade Capitalist by Mark Stevens

corporate governance, corporate raider, Donald Trump, Gordon Gekko, Irwin Jacobs, laissez-faire capitalism, old-boy network, Ponzi scheme, profit motive, shareholder value, yellow journalism

Stathakis Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book. “I create nothing, I own.” - Gordon Gekko in the film “Wall Street,” 1987 Table of Contents FORWARD: THE BATTLE TO WRITE THIS BOOK THE BILLION DOLLAR EPIPHANY FROM BAYSWATER TO PRINCETON MY SON, THE OPTIONS BROKER FIRST STRIKES: CONTROLLING THE DESTINY OF COMPANIES TALK LIKE A POPULIST, ACT LIKE A RAIDER “FEAR OF GOD” GAMBIT MEETS THE “STIFF-ARM DEFENSE” GETTING RICH IN THE EIGHTIES: LIKE “TAKING CANDY FROM A BABY” PHILLIPS PETROLEUM MEETS THE “BARBARIANS FROM HELL” ICAHN VS.


pages: 407 words: 104,622

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman

affirmative action, Affordable Care Act / Obamacare, Albert Einstein, Andrew Wiles, automated trading system, backtesting, Bayesian statistics, beat the dealer, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, blockchain, Brownian motion, butter production in bangladesh, buy and hold, buy low sell high, Claude Shannon: information theory, computer age, computerized trading, Credit Default Swap, Daniel Kahneman / Amos Tversky, diversified portfolio, Donald Trump, Edward Thorp, Elon Musk, Emanuel Derman, endowment effect, Flash crash, George Gilder, Gordon Gekko, illegal immigration, index card, index fund, Isaac Newton, John Meriwether, John Nash: game theory, John von Neumann, Loma Prieta earthquake, Long Term Capital Management, loss aversion, Louis Bachelier, mandelbrot fractal, margin call, Mark Zuckerberg, More Guns, Less Crime, Myron Scholes, Naomi Klein, natural language processing, obamacare, p-value, pattern recognition, Peter Thiel, Ponzi scheme, prediction markets, quantitative hedge fund, quantitative trading / quantitative finance, random walk, Renaissance Technologies, Richard Thaler, Robert Mercer, Ronald Reagan, self-driving car, Sharpe ratio, Silicon Valley, sovereign wealth fund, speech recognition, statistical arbitrage, statistical model, Steve Jobs, stochastic process, the scientific method, Thomas Bayes, transaction costs, Turing machine

Junk-bond king Michael Milken pocketed over one billion dollars in compensation between 1983 and 1987 before securities violations related to an insider trading investigation landed him in jail. Others joined him, including investment banker Martin Siegel and trader Ivan Boesky, who exchanged both takeover information and briefcases packed with hundreds of thousands of dollars in neat stacks of $100 bills.1 By 1989, Gordon Gekko, the protagonist in the movie Wall Street, had come to define the business’s aggressive, cocksure professionals, who regularly pushed for an unfair edge. Berlekamp was an anomaly in this testosterone-drenched period, an academic with little use for juicy rumors or hot tips. He barely knew how various companies earned their profits and had zero interest in learning. Approaching his forty-ninth birthday, Berlekamp also bore little physical resemblance to the masters of the universe reaping Wall Street’s mounting spoils.


pages: 380 words: 109,724

Don't Be Evil: How Big Tech Betrayed Its Founding Principles--And All of US by Rana Foroohar

"side hustle", accounting loophole / creative accounting, Airbnb, AltaVista, autonomous vehicles, banking crisis, barriers to entry, Bernie Madoff, Bernie Sanders, bitcoin, book scanning, Brewster Kahle, Burning Man, call centre, cashless society, cleantech, cloud computing, cognitive dissonance, Colonization of Mars, computer age, corporate governance, creative destruction, Credit Default Swap, cryptocurrency, data is the new oil, death of newspapers, Deng Xiaoping, disintermediation, don't be evil, Donald Trump, drone strike, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Etonian, Filter Bubble, future of work, game design, gig economy, global supply chain, Gordon Gekko, greed is good, income inequality, informal economy, information asymmetry, intangible asset, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, Kenneth Rogoff, life extension, light touch regulation, Lyft, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Menlo Park, move fast and break things, move fast and break things, Network effects, new economy, offshore financial centre, PageRank, patent troll, paypal mafia, Peter Thiel, pets.com, price discrimination, profit maximization, race to the bottom, recommendation engine, ride hailing / ride sharing, Robert Bork, Sand Hill Road, search engine result page, self-driving car, shareholder value, sharing economy, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, smart cities, Snapchat, South China Sea, sovereign wealth fund, Steve Jobs, Steven Levy, subscription business, supply-chain management, TaskRabbit, Telecommunications Act of 1996, The Chicago School, the new new thing, Tim Cook: Apple, too big to fail, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, Upton Sinclair, WikiLeaks, zero-sum game

If the 1980s began the age of greed, then the late 1990s cemented it. It was the age of Clinton and Blair, who continued much of the market deregulation that had started under Reagan and Thatcher. It was a period when the last vestiges of the labor movement and the old-fashioned notion of retiring comfortably with a gold watch and a pension began to slip away, replaced by the glamorization of Gordon Gekko and soccer moms reading Money magazine and hoping to become stock-picking millionaires overnight. Wall Street guys were raking in money, but not nearly as much as the Silicon Valley geeks who had the trappings of money, and yet also somehow a greater sense of having earned it, by creating real value in the form of their companies. Yet most of that value would prove to be on paper only. Sand Hill Road venture capitalists were pouring millions into Silicon Valley’s dot-com companies; British investors tried to emulate them.


pages: 416 words: 108,370

Hit Makers: The Science of Popularity in an Age of Distraction by Derek Thompson

Airbnb, Albert Einstein, Alexey Pajitnov wrote Tetris, always be closing, augmented reality, Clayton Christensen, Donald Trump, Downton Abbey, full employment, game design, Gordon Gekko, hindsight bias, indoor plumbing, industrial cluster, information trail, invention of the printing press, invention of the telegraph, Jeff Bezos, John Snow's cholera map, Kodak vs Instagram, linear programming, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Metcalfe’s law, Minecraft, Nate Silver, Network effects, Nicholas Carr, out of africa, randomized controlled trial, recommendation engine, Robert Gordon, Ronald Reagan, Silicon Valley, Skype, Snapchat, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, Steven Pinker, subscription business, telemarketer, the medium is the message, The Rise and Fall of American Growth, Uber and Lyft, Uber for X, uber lyft, Vilfredo Pareto, Vincenzo Peruggia: Mona Lisa, women in the workforce

So the screenwriter is encouraged to include several scenes where the female executive’s steely exoskeleton cracks and audiences can glimpse the vulnerable softness underneath. Miranda Priestly, the Machiavellian editor in chief played by Meryl Streep in The Devil Wears Prada, has a visible breakdown over her marriage before ultimately triumphing in the film. Compare that with another ethically dubious boss, Gordon Gekko, the oily financier played by Michael Douglas in Wall Street, who enjoys cult worship despite being a relentless and unrepentant crook. Alec Baldwin’s “Always Be Closing” speech from Glengarry Glen Ross is one of the most glorious asshole moments in film history. But according to Bruzzese’s research, audiences would be less inclined to embrace a foulmouthed woman from downtown. If Bruzzese is right, Hollywood storytellers are caught in a trap of their own design.


pages: 300 words: 106,520

The Nanny State Made Me: A Story of Britain and How to Save It by Stuart Maconie

banking crisis, basic income, Bernie Sanders, bitcoin, Boris Johnson, British Empire, cognitive dissonance, collective bargaining, Corn Laws, David Attenborough, Desert Island Discs, don't be evil, Downton Abbey, Elon Musk, Etonian, failed state, Francis Fukuyama: the end of history, full employment, G4S, Gordon Gekko, greed is good, helicopter parent, hiring and firing, housing crisis, job automation, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, North Sea oil, Own Your Own Home, plutocrats, Plutocrats, rent control, Right to Buy, road to serfdom, Silicon Valley, The Chicago School, universal basic income, Winter of Discontent

So delete your Facebook account, turn off your phone, and come with me for some fresh air. CHAPTER 10 I LOOK FORWARD ‘SELLING ENGLAND BY THE POUND’ ‘It is difficult, if not impossible, to combine the citizens’ rights and interests and the private enterprise’s interests, because the private enterprise aims at its natural and justified objective, the biggest possible profit.’ Joseph Chamberlain ‘Greed is good.’ Gordon Gekko The Upper Derwent Valley, Derbyshire. A fine, calm, April evening, the air warm and still, the kiss of breeze very welcome. The journey up here out of Manchester through the city’s weekday rush hour is never something you’d call pleasant; smothered in the damp armpit or bulky backpack of a fellow traveller on a stifling privatised train, or tail to tail in the fuming cars that crawl through the winding bottlenecks of the A57 to Glossop and Sheffield.


pages: 913 words: 265,787

How the Mind Works by Steven Pinker

affirmative action, agricultural Revolution, Alfred Russel Wallace, Buckminster Fuller, cognitive dissonance, Columbine, combinatorial explosion, complexity theory, computer age, computer vision, Daniel Kahneman / Amos Tversky, delayed gratification, double helix, experimental subject, feminist movement, four colour theorem, Gordon Gekko, greed is good, hedonic treadmill, Henri Poincaré, income per capita, information retrieval, invention of agriculture, invention of the wheel, Johannes Kepler, John von Neumann, lake wobegon effect, lateral thinking, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, Mikhail Gorbachev, Murray Gell-Mann, mutually assured destruction, Necker cube, out of africa, pattern recognition, phenotype, plutocrats, Plutocrats, random walk, Richard Feynman, Ronald Reagan, Rubik’s Cube, Saturday Night Live, scientific worldview, Search for Extraterrestrial Intelligence, sexual politics, social intelligence, Steven Pinker, theory of mind, Thorstein Veblen, Turing machine, urban decay, Yogi Berra

One subtext is, Don’t hate the wolf that just ate Bambi; he’s acting for the greater good. The other is, Protecting the environment is nature’s way; we humans had better shape up. The opposing theory of the selfish gene has been bitterly attacked out of the fear that it vindicates the philosophy of Gordon Gekko in Wall Street: greed is good, greed works. Then there are those who believe in selfish genes but urge us to face up to the sad truth: at heart, Mother Teresa is really selfish. I think moralistic science is bad for morals and bad for science. Surely paving Yosemite is unwise, Gordon Gekko is bad, and Mother Teresa is good regardless of what came out in the latest biology journals. But I suppose it is only human to feel a frisson when learning about what made us what we are. So I offer a more hopeful way of reflecting on the selfish gene.


Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America by David Callahan

affirmative action, Albert Einstein, American Legislative Exchange Council, automated trading system, Bernie Sanders, Bonfire of the Vanities, carbon footprint, carried interest, clean water, corporate social responsibility, David Brooks, demographic transition, desegregation, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Thorp, financial deregulation, financial independence, global village, Gordon Gekko, greed is good, high net worth, income inequality, Irwin Jacobs: Qualcomm, Jeff Bezos, John Markoff, Kickstarter, knowledge economy, knowledge worker, Marc Andreessen, Mark Zuckerberg, market fundamentalism, medical malpractice, mega-rich, Mitch Kapor, Naomi Klein, NetJets, new economy, offshore financial centre, Peter Thiel, plutocrats, Plutocrats, profit maximization, quantitative trading / quantitative finance, Ralph Nader, Renaissance Technologies, Richard Florida, Robert Bork, rolodex, Ronald Reagan, school vouchers, short selling, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, stem cell, Steve Ballmer, Steve Jobs, unpaid internship, Upton Sinclair, Vanguard fund, War on Poverty, working poor, World Values Survey

Given these promises, Jones’s mansion should well have been empty that night. It wasn’t. More than three hundred people showed up, each contributing $2,300. The event included a private reception with Obama for another dozen people who had raised more than $25,000 each for his campaign. That Paul Tudor Jones would be shaking the Greenwich money tree for Obama is not as odd as it looks. Jones isn’t a Gordon Gekko c02.indd 34 5/11/10 8:51:53 AM what’s the matter with connecticut? 35 kind of Wall Streeter. He has long been involved in social causes and in more than a passing way. He was a cofounder of the Robin Hood Foundation, one of the largest antipoverty groups in New York City. He personally underwrote many of Robin Hood’s administrative expenses, so that the group could claim that 100 percent of the contributions would go directly to help New Yorkers in need.


pages: 476 words: 118,381

Space Chronicles: Facing the Ultimate Frontier by Neil Degrasse Tyson, Avis Lang

Albert Einstein, Arthur Eddington, asset allocation, Berlin Wall, carbon-based life, centralized clearinghouse, cosmic abundance, cosmic microwave background, dark matter, Gordon Gekko, informal economy, invention of movable type, invention of the telescope, Isaac Newton, Johannes Kepler, Karl Jansky, Kuiper Belt, Louis Blériot, low earth orbit, Mars Rover, mutually assured destruction, orbital mechanics / astrodynamics, Pluto: dwarf planet, RAND corporation, Ronald Reagan, Search for Extraterrestrial Intelligence, SETI@home, space pen, stem cell, Stephen Hawking, Steve Jobs, the scientific method, trade route

I, for one, want to live in a nation that values dreaming as a dimension of that spending. Most, if not all, of those dreams spring from the premise that our discoveries will transform how we live. Recently I had a depressing revelation. It was about firsts. The first cell phone looked like a large brick. You see it and you think, Did people actually hold this up to their ear? Remember the 1987 movie Wall Street, with Gordon Gekko, the rich guy, at his beach house in the Hamptons, talking on one of those phones? I remember thinking, Wow, that’s cool! He can walk on the beach and speak to somebody on a portable phone! But now when I look back, all I can think is, How could anybody have ever used such a thing? This is the evidence that we’ve moved on: you look at the first thing—the brick-size cell phone, the car with the little crank, the airplane that looks like a cloth-wrapped insect—and you say, “Put it in a museum.


pages: 402 words: 110,972

Nerds on Wall Street: Math, Machines and Wired Markets by David J. Leinweber

AI winter, algorithmic trading, asset allocation, banking crisis, barriers to entry, Big bang: deregulation of the City of London, business cycle, butter production in bangladesh, butterfly effect, buttonwood tree, buy and hold, buy low sell high, capital asset pricing model, citizen journalism, collateralized debt obligation, corporate governance, Craig Reynolds: boids flock, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Danny Hillis, demand response, disintermediation, distributed generation, diversification, diversified portfolio, Emanuel Derman, en.wikipedia.org, experimental economics, financial innovation, fixed income, Gordon Gekko, implied volatility, index arbitrage, index fund, information retrieval, intangible asset, Internet Archive, John Nash: game theory, Kenneth Arrow, load shedding, Long Term Capital Management, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, market fragmentation, market microstructure, Mars Rover, Metcalfe’s law, moral hazard, mutually assured destruction, Myron Scholes, natural language processing, negative equity, Network effects, optical character recognition, paper trading, passive investing, pez dispenser, phenotype, prediction markets, quantitative hedge fund, quantitative trading / quantitative finance, QWERTY keyboard, RAND corporation, random walk, Ray Kurzweil, Renaissance Technologies, risk tolerance, risk-adjusted returns, risk/return, Robert Metcalfe, Ronald Reagan, Rubik’s Cube, semantic web, Sharpe ratio, short selling, Silicon Valley, Small Order Execution System, smart grid, smart meter, social web, South Sea Bubble, statistical arbitrage, statistical model, Steve Jobs, Steven Levy, Tacoma Narrows Bridge, the scientific method, The Wisdom of Crowds, time value of money, too big to fail, transaction costs, Turing machine, Upton Sinclair, value at risk, Vernor Vinge, yield curve, Yogi Berra, your tax dollars at work

Don worked some kind of deal with Quotron,12 then the major market data vendor and conveniently located down the street, that allowed us to use actual market data to try out our wacky ideas. This might have been one of the first times anyone actually tied the consolidated feed to an expert system. Lew Roth joined me in trying to get this collection of buggy stuff to do something useful. Our modest efforts at a prototype were immodestly called the ART Quotron Universal Investment Reasoning Engine—AQUIRE, which had a nice Gordon Gekko feel to it (even though the actual Gordon was a year away, in 1987). As it turned out, the “Universal Investment Reasoning” demonstrated in AQUIRE consisted of variations on xxx Introduction crossover rules—comparisons of moving averages. These seemed to be a favorite of the New York visitors, and were easy to program. Many of the traders had their own secret sauce variations on this theme, combining different averaging intervals and lags.


pages: 412 words: 113,782

Business Lessons From a Radical Industrialist by Ray C. Anderson

addicted to oil, Albert Einstein, banking crisis, business cycle, carbon footprint, centralized clearinghouse, clean water, cleantech, corporate social responsibility, Credit Default Swap, dematerialisation, distributed generation, energy security, Exxon Valdez, fear of failure, Gordon Gekko, greed is good, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), intermodal, invisible hand, late fees, Mahatma Gandhi, market bubble, music of the spheres, Negawatt, new economy, oil shale / tar sands, oil shock, old-boy network, peak oil, renewable energy credits, shareholder value, Silicon Valley, six sigma, supply-chain management, urban renewal, Y2K

I suggest—and I know this is heresy—that Milton Friedman was at the heart, along with a generation of economists and bankers who have blindly followed his mantra: “Business exists to make a profit.” Really? This credo is at the heart of the world view that I’ve already written about—the fundamentally flawed paradigm, the mind-set that underlies the industrial system—and I suggest that that same mind-set also underlies the global financial system. I further suggest that Gordon Gekko’s fictional proclamation in the film Wall Street, “Greed is good,” is as widely accepted as Friedman’s credo, one hand-in-glove with the other, throughout the high-flying financial world. That’s a real double whammy! So, with trillions of dollars seeking instant gratification in short-term profits, with the financial industry coming up with ever-more esoteric and risky ways of satisfying that demand, with a ratings industry turning a blind eye to risk and stamping triple-A on too many pieces of paper (because if one agency didn’t, another would), something had to give, and it did.


pages: 426 words: 115,150

Your Money or Your Life: 9 Steps to Transforming Your Relationship With Money and Achieving Financial Independence: Revised and Updated for the 21st Century by Vicki Robin, Joe Dominguez, Monique Tilford

asset allocation, Buckminster Fuller, buy low sell high, credit crunch, disintermediation, diversification, diversified portfolio, fiat currency, financial independence, fixed income, fudge factor, full employment, Gordon Gekko, high net worth, index card, index fund, job satisfaction, Menlo Park, money market fund, Parkinson's law, passive income, passive investing, profit motive, Ralph Waldo Emerson, Richard Bolles, risk tolerance, Ronald Reagan, Silicon Valley, software patent, strikebreaker, Thorstein Veblen, Vanguard fund, zero-coupon bond

Every time that increasing sense of something missing would overtake her, out she’d go to buy an item to “cheer her up.” Perhaps some moments of pleasure came from purchasing each white sweater, a happiness that probably dissipated soon after the sweater had disappeared into the white-sweater drawers. As one wise person said, you can never get enough of what you don’t really want. Greed is another component of our irrational and addictive relationship with money. “Greed,” said Gordon Gekko, the wheeler-dealer in the movie Wall Street, “is good.” It is, indeed, a socially acceptable and even encouraged motivation. Along with its dark cousin, fear, it runs the casino called Wall Street and gets reported on in the most respectable journals and newspapers in the world. Greed is also what possesses so many of us as we shoot right past the peak of the Fulfillment Curve and accumulate clutter (hoarding).


Little Failure: A Memoir by Gary Shteyngart

Albert Einstein, anti-communist, Anton Chekhov, East Village, glass ceiling, Gordon Gekko, greed is good, New Journalism, Ronald Reagan, Yom Kippur War, young professional

The brochure for kindly, progressive Grinnell College in Iowa literally makes me cry. All those morally strong boys and girls, all those international flags hanging amid the Gothic architecture. I curl up in my old Soviet comforter as Mama and Papa launch new fusillades downstairs. What kind of a person would I be if I went to a place like Grinnell? What if I jettisoned all of it, foreigner, Gnu, Gordon Gekko wannabe? What if I started from nothing? Am I crying because of the razvod downstairs? Am I crying because I can’t wait to be loved for the little nub inside me, whatever it may contain? Or am I crying because, in a sense, I know I’m about to commit an act of suicide, an act that will take me fully through my twenties and thirties, fully through a decade of psychoanalysis, to complete? I get into Michigan first.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

"Robert Solow", accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

Few people, even among the most ardent fans of market solutions, will disagree with the proposition that the financial markets have, from time to time, brought scandalous demonstrations of greed. While most traders earning multimillion bonuses no doubt think of themselves as upstanding citizens, the rest of us find it hard to find many shining examples of virtuous behavior on Wall Street or in the City of London. In the notorious words of cinema villain Gordon Gekko (Michael Douglas in Wall Street), “Greed is good” is the motto of the markets, but not of Main Street. Likewise, the cartoon “rational economic man” is a selfish being, whereas real people make choices motivated by the moral sentiments of Adam Smith and illuminated by modern evolutionary biology. But does the immorality of the financial markets and the all-out free market ideology they embody in fact corrupt the rest of the economy?


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

"Robert Solow", affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, business cycle, buy and hold, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, fixed income, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, John Markoff, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, Malacca Straits, market bubble, microcredit, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, Sam Peltzman, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, the rule of 72, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional, zero-sum game

Listing high would mean many weeks of showing the house, holding open houses, and baking cookies to make the place smell good. Lots of work, in other words. Assuming a 3 percent commission, your agent can make $8,400 for doing virtually nothing or $9,600 for doing many weeks of work. Which would you choose? On the buy side or the sell side, your agent’s most powerful incentive is to get a deal done, whether it is at a price favorable to you or not. Economics teaches us how to get the incentives right. As Gordon Gekko told us in the movie Wall Street, greed is good, so make sure that you have it working on your side. Yet Mr. Gekko was not entirely correct. Greed can be bad—even for people who are entirely selfish. Indeed, some of the most interesting problems in economics involve situations in which rational individuals acting in their own best interest do things that make themselves worse off. Yet their behavior is entirely logical.


pages: 1,073 words: 302,361

Money and Power: How Goldman Sachs Came to Rule the World by William D. Cohan

asset-backed security, Bernie Madoff, business cycle, buttonwood tree, buy and hold, collateralized debt obligation, corporate governance, corporate raider, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversified portfolio, fear of failure, financial innovation, fixed income, Ford paid five dollars a day, Goldman Sachs: Vampire Squid, Gordon Gekko, high net worth, hiring and firing, hive mind, Hyman Minsky, interest rate swap, John Meriwether, Kenneth Arrow, London Interbank Offered Rate, Long Term Capital Management, margin call, market bubble, mega-rich, merger arbitrage, moral hazard, mortgage debt, Myron Scholes, paper trading, passive investing, Paul Samuelson, Ponzi scheme, price stability, profit maximization, risk tolerance, Ronald Reagan, Saturday Night Live, South Sea Bubble, time value of money, too big to fail, traveling salesman, value at risk, yield curve, Yogi Berra, zero-sum game

“No mercy for the yuppies,” explained Anthony Scaramucci, one of the forty Goldman associates in the conference room that afternoon. Hour and after hour passed without the partner who had told them all to be there showing up. By 8:30, three of natives were getting restless. “What’s up?” one of them said. “Where is this jerk? I have plans in the Hamptons and want to get going.” After another half hour, the three rebels left. “They were MBAs from top grad schools,” Scaramucci observed. “They were the future Gordon Gekkos.” The rest of the group waited around. At 10:00 p.m., the partner appeared, passed around a sheet of paper, and asked everyone there to sign his or her name on it. With that minor bit of bookkeeping completed—and taking a page from the nineteenth-century French writer, Stendhal, in Lucien Leuwen—he said, “So, today’s lesson is about waiting patiently for those who are more important than you.

The tale was nothing if not sordid: Dorothy Rabinowitz, “A Cautionary Tale,” New York, January 8, 1990. The author has also reviewed numerous documents related to the cases and interviewed Gary Moskowitz and Lew Eisenberg. 9. “This worked because”: Robert E. Rubin, In an Uncertain World (New York: Random House, 2003), p. 99. 10. “Over the years”: Ibid., p. 100. 11. “There was a lot”: Author interview with Steve Friedman. 12. “No mercy for the yuppies”: Anthony Scaramucci, Goodbye Gordon Gekko: How to Find Your Fortune Without Losing Your Soul (New York: Wiley, 2010), p. 141. The entire incident is described well in Scaramucci’s book. 13. “masses of people”: Janet Hanson, More Than 85 Broads: Women Making Career Choices, Taking Risks, and Defining Success on Their Own Terms (New York: McGraw-Hill, 2006), p. 24. 14. “All eyes were on me”: Ibid. 15. “she was subjected to a hostile”: Utley v.


pages: 1,073 words: 314,528

Strategy: A History by Lawrence Freedman

Albert Einstein, anti-communist, Anton Chekhov, Ayatollah Khomeini, barriers to entry, battle of ideas, Black Swan, British Empire, business process, butterfly effect, centre right, Charles Lindbergh, circulation of elites, cognitive dissonance, coherent worldview, collective bargaining, complexity theory, conceptual framework, corporate raider, correlation does not imply causation, creative destruction, cuban missile crisis, Daniel Kahneman / Amos Tversky, defense in depth, desegregation, Edward Lorenz: Chaos theory, en.wikipedia.org, endogenous growth, endowment effect, Ford paid five dollars a day, framing effect, Frederick Winslow Taylor, Gordon Gekko, greed is good, information retrieval, interchangeable parts, invisible hand, John Nash: game theory, John von Neumann, Kenneth Arrow, lateral thinking, linear programming, loose coupling, loss aversion, Mahatma Gandhi, means of production, mental accounting, Murray Gell-Mann, mutually assured destruction, Nash equilibrium, Nelson Mandela, Norbert Wiener, Norman Mailer, oil shock, Pareto efficiency, performance metric, Philip Mirowski, prisoner's dilemma, profit maximization, race to the bottom, Ralph Nader, RAND corporation, Richard Thaler, road to serfdom, Ronald Reagan, Rosa Parks, shareholder value, social intelligence, Steven Pinker, strikebreaker, The Chicago School, The Myth of the Rational Market, the scientific method, theory of mind, Thomas Davenport, Thomas Kuhn: the structure of scientific revolutions, Torches of Freedom, Toyota Production System, transaction costs, ultimatum game, unemployed young men, Upton Sinclair, urban sprawl, Vilfredo Pareto, War on Poverty, women in the workforce, Yogi Berra, zero-sum game

During the 1980s, there was a shift toward Sun Tzu.10 Sun Tzu’s influence was attested to by two references in popular culture. In the movie Wall Street, the villainous Gordon Gekko advises Bud Fox: “I don’t throw darts at a board. I bet on sure things. Read Sun Tzu, THE ART OF WAR. Every battle is won before it is ever fought.” Fox later used Sun Tzu to prevail over Gekko: “If your enemy is superior, evade him. If angry, irritate him. If equally matched, fight, and if not, split and re-evaluate.” Wall Street was a morality tale involving junior stockbroker Bud Fox caught between his blue-collar father, a foreman and trade unionist who represented the virtues of hard and honest labor, and the ruthless, cynical Gordon Gekko, a corporate raider whose motto was “greed is good.” Bud became wealthy by following Gekko’s methods until he realized that a plan to buy the airline where his father worked was all about asset-stripping.


pages: 385 words: 133,839

The Coke Machine: The Dirty Truth Behind the World's Favorite Soft Drink by Michael Blanding

carbon footprint, clean water, collective bargaining, corporate social responsibility, Exxon Valdez, Gordon Gekko, Internet Archive, laissez-faire capitalism, market design, MITM: man-in-the-middle, Naomi Klein, Nelson Mandela, New Journalism, Ponzi scheme, profit motive, Ralph Nader, rolodex, Ronald Reagan, shareholder value, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, Upton Sinclair

Meanwhile, in 1919, in the wake of Candler’s slight, Dobbs became head of the Atlanta Chamber of Commerce, where he got to meet many members of the city’s business elite. Just as Robinson had persuaded Candler to buy up the company decades earlier, Dobbs would persuade one of them, Trust Com­ pany president Ernest Woodruff, to take over the company now. As a business tycoon, Ernest Woodruff was almost a caricature—a cross between Gordon Gekko and the Monopoly Man. His occupation was to make money, mostly through the takeover, restructuring, and sale of real estate and transportation companies. He had a reputation for play­ ing dirty, not above breaking into a rival’s office late at night to steal files. And he was even more of a skinflint than Candler, once supposedly strap­ ping $2 million in bonds to himself and his secretary on a train from Cleveland in order to save $200 in shipping costs.


pages: 458 words: 134,028

Microtrends: The Small Forces Behind Tomorrow's Big Changes by Mark Penn, E. Kinney Zalesne

addicted to oil, affirmative action, Albert Einstein, Ayatollah Khomeini, Berlin Wall, big-box store, call centre, corporate governance, David Brooks, Donald Trump, extreme commuting, Exxon Valdez, feminist movement, glass ceiling, God and Mammon, Gordon Gekko, haute couture, hygiene hypothesis, illegal immigration, immigration reform, index card, Isaac Newton, job satisfaction, labor-force participation, late fees, life extension, low cost airline, low skilled workers, mobile money, new economy, RAND corporation, Renaissance Technologies, Ronald Reagan, Rosa Parks, Rubik’s Cube, stem cell, Stephen Hawking, Steve Jobs, Superbowl ad, the payments system, Thomas L Friedman, upwardly mobile, uranium enrichment, urban renewal, War on Poverty, white picket fence, women in the workforce, Y2K

And he isn’t that interested in telling you how much money he has. Most millionaires would not be caught dead in a limo. It is the antithesis of what they believe in. Even the limo companies have had to shift to SUVs. According to a 2003 survey and analysis by Harris Interactive, there are actually six different kinds of millionaires—and the biggest group is the quietest one. Here are the six: 1. “Deal Masters” (think Gordon Gekko of the movie Wall Street) 2. “Altruistic Achievers” (think Bruce Wayne, the public face of Batman) 3. “Secret Succeeders” (like “Citizen” Charles Foster Kane) 4. “Status Chasers” (Scarlett O’Hara) 5. “Satisfied Savers” (Oliver Wendell Douglas of Green Acres), and 6. “Disengaged Inheritors” (Dudley Moore’s Arthur) While the cliché of the Really Rich is that they are either ambitious and domineering (like Gekko) or petty and spoiled (like Arthur)—it turns out that those two kinds of millionaires actually represent the smallest groups, together making up less than a quarter of all American rich people.


How I Became a Quant: Insights From 25 of Wall Street's Elite by Richard R. Lindsey, Barry Schachter

Albert Einstein, algorithmic trading, Andrew Wiles, Antoine Gombaud: Chevalier de Méré, asset allocation, asset-backed security, backtesting, bank run, banking crisis, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, Brownian motion, business cycle, business process, butter production in bangladesh, buy and hold, buy low sell high, capital asset pricing model, centre right, collateralized debt obligation, commoditize, computerized markets, corporate governance, correlation coefficient, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, discounted cash flows, disintermediation, diversification, Donald Knuth, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial innovation, fixed income, full employment, George Akerlof, Gordon Gekko, hiring and firing, implied volatility, index fund, interest rate derivative, interest rate swap, John von Neumann, linear programming, Loma Prieta earthquake, Long Term Capital Management, margin call, market friction, market microstructure, martingale, merger arbitrage, Myron Scholes, Nick Leeson, P = NP, pattern recognition, Paul Samuelson, pensions crisis, performance metric, prediction markets, profit maximization, purchasing power parity, quantitative trading / quantitative finance, QWERTY keyboard, RAND corporation, random walk, Ray Kurzweil, Richard Feynman, Richard Stallman, risk-adjusted returns, risk/return, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, sorting algorithm, statistical arbitrage, statistical model, stem cell, Steven Levy, stochastic process, systematic trading, technology bubble, The Great Moderation, the scientific method, too big to fail, trade route, transaction costs, transfer pricing, value at risk, volatility smile, Wiener process, yield curve, young professional

Don worked some kind of deal with Quotron,6 then the major market data vendor and conveniently located down the street, that allowed us to use actual market data to try out our wacky ideas. This might have been one of the first times anyone actually tied the consolidated feed to an expert system. Our modest efforts at a prototype were immodestly called the ART Quotron Universal Investment Reasoning Engine—AQUIRE, which had a nice Gordon Gekko feel to it (even though the actual Gordon from Wall Street was a year away, in 1987). As it turned out, the “Universal Investment Reasoning” demonstrated in AQUIRE consisted of variations JWPR007-Lindsey 20 May 7, 2007 16:12 h ow i b e cam e a quant on crossover rules—comparisons of moving averages. These seemed to be a favorite of the New York visitors, and were easy to program. Many of the traders had their own secret-sauce variations on this theme, combining different averaging intervals and lags.


pages: 460 words: 130,053

Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice by Bill Browder

Berlin Wall, British Empire, corporate governance, El Camino Real, Gordon Gekko, half of the world's population has never made a phone call, index card, rolodex, Ronald Reagan, transfer pricing, union organizing

I was ready to leave when the door finally opened—only it wasn’t Boris. It was Leonid Rozhetskin, a thirty-one-year-old Russian-born, Ivy League–educated lawyer whom I’d met on a few occasions (and who would, a decade later, be murdered in Jurmula, Latvia, after a spectacular falling-out with various people he did business with). Leonid, who’d clearly watched the film Wall Street one too many times, had slicked-back, Gordon Gekko–styled hair and sported red suspenders over a custom, monogrammed, button-down shirt. He took the chair at the head of the table and laced his fingers over one knee. “I’m sorry Boris couldn’t make it,” he said in lightly accented English. “He’s busy.” “I am too.” “I’m sure you are. What brings you here today?” “You know what, Leonid. I’m here to talk about Sidanco.” “Yes. What about it?” “If this dilution goes forward, it’s going to cost me and my investors—including Edmond Safra—eighty-seven million dollars.”


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Satyajit Das, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, zero-sum game

Bush tried to institutionalize the transition to an “ownership society” by trying to privatize Social Security (thankfully, that plan was unsuccessful) and increase home ownership by lowering lending standards, which was of course one of the factors that precipitated the housing market collapse in 2007. And throughout the entire period, public obsession with the markets grew. The financial media burgeoned. Traders became stars, shareholder value became the guiding force for corporate America, and, as Gordon Gekko put it so famously in the 1987 movie Wall Street, greed was good. Our economic orbit has been realigned. TOO BIG TO FAIL It was a revolution that benefited financiers the most. Even though Wriston’s blunders in the emerging markets haunted Citi balance sheets for years, requiring the sort of government interventions that Wriston deplored for other industries,65 he retired on a high note in 1984.


The America That Reagan Built by J. David Woodard

affirmative action, anti-communist, Ayatollah Khomeini, Berlin Wall, Bonfire of the Vanities, business cycle, colonial rule, Columbine, corporate raider, cuban missile crisis, Deng Xiaoping, friendly fire, glass ceiling, global village, Gordon Gekko, gun show loophole, income inequality, invisible hand, Jeff Bezos, laissez-faire capitalism, late capitalism, Live Aid, Marc Andreessen, Mikhail Gorbachev, mutually assured destruction, Neil Kinnock, Nelson Mandela, new economy, postindustrial economy, Ralph Nader, Robert Bork, Ronald Reagan, Ronald Reagan: Tear down this wall, Rubik’s Cube, Silicon Valley, South China Sea, stem cell, Ted Kaczynski, The Predators' Ball, trickle-down economics, women in the workforce, Y2K, young professional

Of course there were critics, and for them the era was never that splendid; it was derided for its inbred conformity, flatulent excesses, and materialistic binges. The ‘‘me’’ decade of the 1970s turned into the ‘‘my’’ decade of the 1980s. The faultfinders saw the surge of abundance as a joyless vulgarity. In 1987, filmmaker Oliver Stone released the movie Wall Street. The story involved a young stockbroker, Bud Fox, who becomes involved with his hero, Gordon Gekko, an extremely successful, but corrupt, stock trader. In the most memorable scene of the movie, Gekko makes a speech to the shareholders of a company he was planning to take over. Stone used the scene to give Gekko, and by extension corporate America at the time, the characteristic trait of economic success.5 Gekko: Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents, each making over 200 thousand dollars a year.


pages: 515 words: 143,055

The Attention Merchants: The Epic Scramble to Get Inside Our Heads by Tim Wu

1960s counterculture, Affordable Care Act / Obamacare, AltaVista, Andrew Keen, anti-communist, Apple II, Apple's 1984 Super Bowl advert, barriers to entry, Bob Geldof, borderless world, Brownian motion, Burning Man, Cass Sunstein, citizen journalism, colonial rule, East Village, future of journalism, George Gilder, Golden Gate Park, Googley, Gordon Gekko, housing crisis, informal economy, Internet Archive, Jaron Lanier, Jeff Bezos, jimmy wales, Live Aid, Mark Zuckerberg, Marshall McLuhan, McMansion, Nate Silver, Network effects, Nicholas Carr, placebo effect, post scarcity, race to the bottom, road to serfdom, Saturday Night Live, science of happiness, self-driving car, side project, Silicon Valley, slashdot, Snapchat, Steve Jobs, Steve Wozniak, Steven Levy, Ted Nelson, telemarketer, the built environment, The Chicago School, the scientific method, The Structural Transformation of the Public Sphere, Tim Cook: Apple, Torches of Freedom, Upton Sinclair, upwardly mobile, white flight, zero-sum game

After years of building the AOL brand and attracting millions of customers, it was now time to “leverage the asset,” or, in Pittman’s alternative terminology, time to “harvest.” To sell the advertising, AOL tapped an experienced New York adman, Myer Berlow, who like Pittman had no experience with anything computer-related. But arriving in the suburban cubicle-land of AOL in black Armani suits and silver ties, with his hair slicked back à la Gordon Gekko, Berlow did bring with him the culture of Madison Avenue in its more lurid manifestations. Already wealthy, he might fly in the off hours to Las Vegas and park himself at a blackjack table to relax. Consequently, his tenure at AOL, amidst the khaki-clad geeks, had the makings of a fish-out-of-water story television writers used to love. And it wasn’t long before he began to clash with AOL’s programmers, who had the traditional geek’s antipathy to advertising (perhaps because they viewed it as a form of darkish Jedi mind control).


pages: 520 words: 134,627

Unacceptable: Privilege, Deceit & the Making of the College Admissions Scandal by Melissa Korn, Jennifer Levitz

"side hustle", affirmative action, barriers to entry, blockchain, call centre, Donald Trump, Gordon Gekko, helicopter parent, high net worth, Jeffrey Epstein, Maui Hawaii, medical residency, Menlo Park, performance metric, rolodex, Ronald Reagan, Sand Hill Road, Saturday Night Live, side project, Silicon Valley, Snapchat, stealth mode startup, Steve Jobs, telemarketer, Thorstein Veblen, unpaid internship, upwardly mobile, yield management, young professional, zero-sum game

They listen all day, every day. And sometimes, they strike gold. * * * • • • LATE MORNING JUNE 15, Singer took a call from a potential client, a bigwig from New York. A third person on the call—the guy who connected Singer and the prospect—primed the pump a bit, introducing Singer as “the Godfather” as he patched them all together. Singer’s opening line fell flat. “Is this Gordon Gekko of Wall Street?” “No,” came the reply. “It’s Gordon Caplan, how are you?” Caplan wasn’t in a joking mood. He apologized to Singer for being so direct, but he wanted to talk about college and his daughter, a ranked tennis player who wanted to keep up the sport in college, maybe even at a Division I program. Federal authorities looking at the transcript later must have been trading high-fives.


pages: 476 words: 139,761

Kleptopia: How Dirty Money Is Conquering the World by Tom Burgis

active measures, Anton Chekhov, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Boris Johnson, British Empire, collapse of Lehman Brothers, coronavirus, corporate governance, COVID-19, Covid-19, credit crunch, Credit Default Swap, cryptocurrency, do-ocracy, Donald Trump, energy security, Etonian, failed state, Gordon Gekko, high net worth, Honoré de Balzac, illegal immigration, invisible hand, Julian Assange, liberal capitalism, light touch regulation, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Mohammed Bouazizi, Northern Rock, offshore financial centre, Right to Buy, Ronald Reagan, Skype, sovereign wealth fund, trade route, WikiLeaks

He wore bow ties and spectacles and thought profoundly about the meaning of the law. Felix himself was not short of material from which to compose the autobiography he would place before the judge. After public school in Brooklyn he had put himself through college at Pace University on Manhattan, studying accounting. A few blocks south of the campus lay Wall Street. This was the 1980s, the Wall Street of Gordon Gekko. Greed was good. Felix qualified as a broker and was soon making money at Bear Stearns, then at Lehman Brothers. He was still only twenty-five when, one night in 1991, as men of Wall Street do, he went out to a bar in Midtown – El Rio Grande – and drank too much. A fellow drinker got into an argument with Felix about a woman. Felix seized a margarita glass and smashed it into the man’s face.


pages: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

"Robert Solow", 23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, Flynn Effect, food miles, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, hedonic treadmill, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, Kickstarter, knowledge worker, Kula ring, Mark Zuckerberg, meta analysis, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, plutocrats, Plutocrats, Ponzi scheme, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, Thales and the olive presses, Thales of Miletus, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, Vilfredo Pareto, wage slave, working poor, working-age population, Y2K, Yogi Berra, zero-sum game

Mercantilism said that exports made you rich and imports made you poor, a fallacy mocked by Adam Smith when he pointed out that Britain selling durable hardware to France in exchange for perishable wine was a missed opportunity to achieve the ‘incredible aug mentation of the pots and pans of the country’. Marxism said that capitalists got rich because workers got poor, another fallacy. In the film Wall Street, the fictional Gordon Gekko not only says that greed is good; he also adds that it’s a zero-sum game where somebody wins and somebody loses. He is not necessarily wrong about some speculative markets in capital and in assets, but he is about markets in goods and services. The notion of synergy, of both sides benefiting, just does not seem to come naturally to people. If sympathy is instinctive, synergy is not. For most people, therefore, the market does not feel like a virtuous place.


pages: 519 words: 155,332

Tailspin: The People and Forces Behind America's Fifty-Year Fall--And Those Fighting to Reverse It by Steven Brill

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, airport security, American Society of Civil Engineers: Report Card, asset allocation, Bernie Madoff, Bernie Sanders, Blythe Masters, Bretton Woods, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, collapse of Lehman Brothers, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, Credit Default Swap, currency manipulation / currency intervention, Donald Trump, ending welfare as we know it, failed state, financial deregulation, financial innovation, future of work, ghettoisation, Gordon Gekko, hiring and firing, Home mortgage interest deduction, immigration reform, income inequality, invention of radio, job automation, knowledge economy, knowledge worker, labor-force participation, laissez-faire capitalism, Mahatma Gandhi, Mark Zuckerberg, mortgage tax deduction, new economy, obamacare, old-boy network, paper trading, performance metric, post-work, Potemkin village, Powell Memorandum, quantitative hedge fund, Ralph Nader, ride hailing / ride sharing, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, telemarketer, too big to fail, trade liberalization, union organizing, Unsafe at Any Speed, War on Poverty, women in the workforce, working poor

Since then, Unilever has repeatedly been rumored to be the target of raiders salivating over how they might “unlock value.” In April 2017, the conservative National Review—reacting to Polman’s rejection of the Kraft-Heinz takeover, which had caused Unilever stock to fall back after the announcement of the bid had seen it jump 14 percent—channeled Milton Friedman in an article titled “Multinational Boss Fashions Himself King of the World.” “CEOs need not aspire to be Gordon Gekko,” wrote Deroy Murdock. “But they need not strive to be Mahatma Gandhi, either. Polman fancies himself as the latter.” The magazine quoted a shareholder as saying, “I would prefer if Mr. Polman furthered his societal ambitions using his own rather than his shareholders’ money,” adding, “Paul Polman could satisfy many people, not least himself, by standing down as Unilever CEO and announcing his candidacy for secretary general of the United Nations.”


Investment: A History by Norton Reamer, Jesse Downing

activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, asset allocation, backtesting, banking crisis, Berlin Wall, Bernie Madoff, break the buck, Brownian motion, business cycle, buttonwood tree, buy and hold, California gold rush, capital asset pricing model, Carmen Reinhart, carried interest, colonial rule, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, debt deflation, discounted cash flows, diversified portfolio, dogs of the Dow, equity premium, estate planning, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, family office, Fellow of the Royal Society, financial innovation, fixed income, Gordon Gekko, Henri Poincaré, high net worth, index fund, information asymmetry, interest rate swap, invention of the telegraph, James Hargreaves, James Watt: steam engine, joint-stock company, Kenneth Rogoff, labor-force participation, land tenure, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, margin call, means of production, Menlo Park, merger arbitrage, money market fund, moral hazard, mortgage debt, Myron Scholes, negative equity, Network effects, new economy, Nick Leeson, Own Your Own Home, Paul Samuelson, pension reform, Ponzi scheme, price mechanism, principal–agent problem, profit maximization, quantitative easing, RAND corporation, random walk, Renaissance Technologies, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, Sand Hill Road, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spinning jenny, statistical arbitrage, survivorship bias, technology bubble, The Wealth of Nations by Adam Smith, time value of money, too big to fail, transaction costs, underbanked, Vanguard fund, working poor, yield curve

It is thus critical not only to be vigilant about overseeing this behavior and administering punishment accordingly but also to be creative about redesigning contracts that are prone to manipulation so that the allure is reduced in the first place. 184 Investment: A History INSIDER TRADING Using large buying power or collusion to influence the price of the market is certainly not the only way to get ahead in the market illicitly. This chapter concludes by exploring cases of insider information, where individuals quietly attempt to exploit knowledge of corporate events, earnings, mergers and acquisition activity, or other material and nonpublic knowledge to get ahead. Ivan Boesky We begin with Ivan Boesky, the man whose likeness was caricatured as Gordon Gekko in the acclaimed film Wall Street.126 He was the man who famously proclaimed, “Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.” The comment was met with some chuckling and an ovation when Boesky made it at the University of California, Berkeley, School of Business Administration in 1986.127 Looking back, however, it is difficult to see precisely what “good” Ivan Boesky’s greed has done society.


pages: 477 words: 144,329

How Money Became Dangerous by Christopher Varelas

activist fund / activist shareholder / activist investor, Airbnb, airport security, barriers to entry, basic income, bitcoin, blockchain, Bonfire of the Vanities, California gold rush, cashless society, corporate raider, crack epidemic, cryptocurrency, discounted cash flows, disintermediation, diversification, diversified portfolio, Donald Trump, dumpster diving, fiat currency, fixed income, friendly fire, full employment, Gordon Gekko, greed is good, interest rate derivative, John Meriwether, Kickstarter, Long Term Capital Management, mandatory minimum, mobile money, mortgage debt, pensions crisis, pets.com, pre–internet, profit motive, risk tolerance, Saturday Night Live, shareholder value, side project, Silicon Valley, Steve Jobs, technology bubble, The Predators' Ball, too big to fail, universal basic income, zero day

Prices were now reflective of the constraints of time and speed, more than any other factor having to do with traditional assessments of value. The squeezing of time had disconnected prices from reality. * * * Managing and refining one’s personal image was another way this desire to control information and perception was manifested. Through the 1980s and into the ’90s, the persona of the “investment banker” became firmly rooted in the public consciousness—spurred on by men real and imagined, like David Wittig and Gordon Gekko; bolstered by books like The Bonfire of the Vanities and Barbarians at the Gate; lionized in the public imagination by their portrayal in films, such as the iconic scene from American Psycho where a bunch of Wall Streeters are sitting around in a conference room trying to one-up one another with the design and quality of their business cards, and the stakes seem murderously high. Through those two decades, a growing majority of bankers came to dress and play the part.


pages: 498 words: 145,708

Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole by Benjamin R. Barber

addicted to oil, AltaVista, American ideology, Berlin Wall, Bertrand Russell: In Praise of Idleness, Bill Gates: Altair 8800, business cycle, Celebration, Florida, collective bargaining, creative destruction, David Brooks, delayed gratification, Donald Trump, double entry bookkeeping, G4S, game design, George Gilder, Gordon Gekko, greed is good, Hernando de Soto, illegal immigration, informal economy, invisible hand, Joseph Schumpeter, laissez-faire capitalism, late capitalism, liberal capitalism, Marc Andreessen, McJob, microcredit, Naomi Klein, new economy, New Journalism, Norbert Wiener, nuclear winter, Panopticon Jeremy Bentham, pattern recognition, presumed consent, profit motive, race to the bottom, Ralph Nader, road to serfdom, Robert Bork, Ronald Reagan, Saturday Night Live, Silicon Valley, spice trade, Steve Jobs, telemarketer, The Fortune at the Bottom of the Pyramid, the market place, The Wisdom of Crowds, Thomas L Friedman, Thorstein Veblen, trade route, X Prize

They draw absurdist parodies of self-rationalizing solipsism and turn them into a new capitalist ethic. Ayn Rand’s great libertarian egoist Howard Roark, who in The Fountainhead famously declared “I came here today to say that I do not recognize anyone’s right to one minute of my life…that I am a man who does not exist for others,”24 is a rather mild solipsist compared with the moralizing egotists of the new capitalism. A towering example is Oliver Stone’s character Gordon Gekko (played by Michael Douglas in Stone’s 1987 film Wall Street) preaching lustily to a choir of stockholders: “The point, ladies and gentlemen, is that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.” Selfishness no longer cloaks itself in religion: it has become religion. Greed is not merely good for me.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

"Robert Solow", accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Andrei Shleifer, anti-communist, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Berlin Wall, Bob Noyce, Branko Milanovic, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, credit crunch, Credit Default Swap, crony capitalism, currency peg, debt deflation, Deng Xiaoping, discovery of the americas, Donald Trump, Erik Brynjolfsson, European colonialism, eurozone crisis, falling living standards, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, Frederick Winslow Taylor, full employment, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, global supply chain, global value chain, Gordon Gekko, greed is good, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, TaskRabbit, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, Yom Kippur War, zero-sum game

Corporate takeovers, often using borrowed money, were widespread in the 1980s and 1990s. A series of predators, like T. Boone Pickens, Carl Icahn and Ivan Boesky, made headlines by taking significant stakes in businesses in a practice known as “greenmail”; either the existing management would buy them out at a profit, or another predator would use their stake as the basis of a deal. The process was dramatised in the film Wall Street, in which Michael Douglas’s character, Gordon Gekko, proclaims that “Greed is good.” The main function of the takeover wave was to break up conglomerates and force companies to focus on a single industry. (The argument was that conglomerates were inefficient; shareholders could get the benefits of diversification by investing in a wide range of companies.)30 The value of takeover deals in the US in the 1980s was $1.3trn and 28% of the country’s largest 500 companies in 1980 had been bought by the end of the decade.


pages: 540 words: 168,921

The Relentless Revolution: A History of Capitalism by Joyce Appleby

1919 Motor Transport Corps convoy, agricultural Revolution, anti-communist, Asian financial crisis, asset-backed security, Bartolomé de las Casas, Bernie Madoff, Bretton Woods, BRICs, British Empire, call centre, Charles Lindbergh, collateralized debt obligation, collective bargaining, Columbian Exchange, commoditize, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, Doha Development Round, double entry bookkeeping, epigenetics, equal pay for equal work, European colonialism, facts on the ground, failed state, Firefox, fixed income, Ford paid five dollars a day, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gordon Gekko, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, hiring and firing, illegal immigration, informal economy, interchangeable parts, interest rate swap, invention of movable type, invention of the printing press, invention of the steam engine, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeff Bezos, joint-stock company, Joseph Schumpeter, knowledge economy, land reform, Livingstone, I presume, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, moral hazard, Parag Khanna, Ponzi scheme, profit maximization, profit motive, race to the bottom, Ralph Nader, refrigerator car, Ronald Reagan, Scramble for Africa, Silicon Valley, Silicon Valley startup, South China Sea, South Sea Bubble, special economic zone, spice trade, spinning jenny, strikebreaker, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thorstein Veblen, total factor productivity, trade route, transatlantic slave trade, transcontinental railway, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, War on Poverty, working poor, Works Progress Administration, Yogi Berra, Yom Kippur War

While capitalist nations were taking in these troubling facts, capitalism moved into high gear with a cascade of new technologies that brought in the age of the computer, the transistor, and the Internet. Schumpeter’s “perennial gale creative destruction” blew in with a new generation of ingenious devices. Every economic downturn gives critics a chance to draft obituaries for capitalism, but they underestimate the fecundity of capitalism in promoting ingenuity and turning novel prototypes into great cash cows. Contemporary Capitalism and Its Critics Gordon Gekko, the business antihero in the movie Wall Street, said that “greed, for lack of a better word, is good,” but few agree. Alan Greenspan, for one, pointed to the dangers of an “infectious greed” while speaking to Congress in 1997 as chairman of the Federal Reserve Board. Nor is greed the only thing that people hold against capitalism. I’ve made a little list, and it includes such charges as responding to short-term opportunities to the neglect of long-term effects, dispensing power without responsibility, promoting material values over spiritual ones, commoditizing human relations, monetizing social values, corrupting democracy, unsettling old communities, institutions, and arrangements, and rewarding aggressiveness and—yes—greed.20 Two other capitalist responsibilities have cast long shadows forward: intractable poverty and a deteriorating environment.


pages: 598 words: 172,137

Who Stole the American Dream? by Hedrick Smith

Affordable Care Act / Obamacare, Airbus A320, airline deregulation, anti-communist, asset allocation, banking crisis, Bonfire of the Vanities, British Empire, business cycle, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, desegregation, Double Irish / Dutch Sandwich, family office, full employment, global supply chain, Gordon Gekko, guest worker program, hiring and firing, housing crisis, Howard Zinn, income inequality, index fund, industrial cluster, informal economy, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, laissez-faire capitalism, late fees, Long Term Capital Management, low cost airline, low cost carrier, manufacturing employment, market fundamentalism, Maui Hawaii, mega-rich, MITM: man-in-the-middle, mortgage debt, negative equity, new economy, Occupy movement, Own Your Own Home, Paul Samuelson, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Powell Memorandum, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Steve Jobs, The Chicago School, The Spirit Level, too big to fail, transaction costs, transcontinental railway, union organizing, Unsafe at Any Speed, Vanguard fund, We are the 99%, women in the workforce, working poor, Y2K

Since top company executives were privy to inside company information, they could obviously cash in big-time by trading in company stock. But the unwritten code frowned on that. “Were everyone to seek to do so …,” Galbraith wrote, “the corporation would be a chaos of competitive avarice.” By the 1980s, competitive avarice was in. Tom Wolfe captured the winner-take-all creed in his book Bonfire of the Vanities, and so did Oliver Stone’s 1987 movie, Wall Street. “Greed, for lack of a better word, is good,” preached Gordon Gekko, the movie’s mogul investor. “Greed is right, greed works…. Greed, in all of its forms … has marked the upward surge of mankind.” It certainly marked the upward surge in CEO pay, which rocketed from forty times the pay of an average company worker in 1980 to nearly four hundred times by 2000. Stakeholder Capitalism Certainly in the 1980s and ’90s, there were CEOs like David Packard of Hewlett-Packard, who practiced stakeholder capitalism, balancing the needs of various corporate stakeholders—employees, customers, and suppliers as well as shareholders and management.


pages: 561 words: 157,589

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

4chan, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, blockchain, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, corporate governance, corporate raider, creative destruction, crowdsourcing, Danny Hillis, data acquisition, deskilling, DevOps, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, full employment, future of work, George Akerlof, gig economy, glass ceiling, Google Glasses, Gordon Gekko, gravity well, greed is good, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, move fast and break things, Network effects, new economy, Nicholas Carr, obamacare, Oculus Rift, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, strong AI, TaskRabbit, telepresence, the built environment, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

Yes, the speed of trading has increased, so that a human trader not paired with that machine has become prey, not predator. Yes, the market is increasingly made of complex financial derivatives that no human can truly understand. But the key lesson is one we have seen again and again. The design of a system determines its outcomes. The robots did not force a human-hostile future upon us; we chose it ourselves. The 1980s were the years of “corporate raiders” celebrated by Michael Douglas’s character, Gordon Gekko, in the 1987 movie Wall Street, who so memorably said, “Greed is good.” The theory was that by discovering and rooting out bad managers and finding efficiencies in underperforming businesses, these raiders were actually improving the operation of the capitalist system. It is certainly true that in some cases they played that role. But by elevating the single fitness function of increasing share price above all else, they hollowed out our overall economy.


pages: 522 words: 162,310

Fantasyland: How America Went Haywire: A 500-Year History by Kurt Andersen

affirmative action, Albert Einstein, animal electricity, anti-communist, Any sufficiently advanced technology is indistinguishable from magic, augmented reality, back-to-the-land, Bernie Sanders, British Empire, Burning Man, California gold rush, Celebration, Florida, centre right, cognitive dissonance, Columbine, corporate governance, Credit Default Swap, David Brooks, delayed gratification, dematerialisation, disintermediation, disruptive innovation, Donald Trump, Donner party, Downton Abbey, Edward Snowden, Electric Kool-Aid Acid Test, failed state, Ferguson, Missouri, God and Mammon, Gordon Gekko, greed is good, high net worth, illegal immigration, invisible hand, Isaac Newton, John von Neumann, Kickstarter, large denomination, Mark Zuckerberg, market fundamentalism, McMansion, Mikhail Gorbachev, Minecraft, moral panic, mutually assured destruction, new economy, New Urbanism, Norman Mailer, placebo effect, pre–internet, Ralph Waldo Emerson, RAND corporation, Ronald Reagan, Silicon Valley, smart meter, Snapchat, South Sea Bubble, Steve Jobs, Ted Kaczynski, the scientific method, Thomas Kuhn: the structure of scientific revolutions, trade route, transcontinental railway, urban renewal, Whole Earth Catalog, WikiLeaks, Y2K, young professional

For them, the ultraindividualist liberation of the 1960s and ’70s had generated a kind of fundamentalist religious faith in markets, and thus an absolute knee-jerk opposition to any attempts by government to make markets work better or more fairly, and to taxes in general. If the new hypercapitalism was working well for you, even if you had no fervent ideological faith in markets, what had previously come across as simple selfishness could now be cloaked in righteousness. “Greed is good,” the fictional Gordon Gekko declared in 1987, but now real people insisted that their moneymaking lust and skill were not merely useful in the aggregate but made them virtuous individually. The year after Wall Street came out, Reagan was reelected in one of the biggest landslides in history. Oh, Ronald Reagan, lovable, shrewd, twinkly, out-of-it, blithe, brilliant Ronald Reagan. The transmutation of presidential politics and governing into entertainment had started a generation earlier, in the 1960s, with John Kennedy.


pages: 613 words: 181,605

Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to Its Knees by Patrick Dillon, Carl M. Cannon

accounting loophole / creative accounting, affirmative action, Bernie Madoff, buy and hold, collective bargaining, Columbine, computer age, corporate governance, corporate raider, desegregation, energy security, estate planning, Exxon Valdez, fear of failure, fixed income, Gordon Gekko, greed is good, illegal immigration, index fund, John Markoff, mandatory minimum, margin call, Maui Hawaii, money market fund, new economy, oil shale / tar sands, Ponzi scheme, Ralph Nader, rolodex, Ronald Reagan, Sand Hill Road, Silicon Valley, Silicon Valley startup, Steve Jobs, the High Line, the market place, white picket fence, Works Progress Administration, zero-sum game

Lerach took particular pleasure in Obama’s victory over the Clintons, whom he’d helped financially and who’d turned on him, and then over John McCain, the candidate Lerach had once brought to his knees. On a personal note, Lerach managed to lose twenty pounds and, due to a lack of a barber, began slicking back his always unruly mop of hair, transforming him into what one of his visitors described as “the second coming of Gordon Gekko,” the character based on Ivan Boesky played by Michael Douglas in the movie Wall Street. DEBRA W. YANG RESIGNED as U.S. attorney for the Central District of California on November 11, 2006, lured to Gibson, Dunn & Crutcher by a hefty salary and a $1.5 million signing bonus. Yang’s move came less than one month before seven other U.S. attorneys were dismissed—and in the wake of White House counsel Harriet Miers raising the possibility to one pliant Justice Department political appointee of replacing Yang.


pages: 713 words: 203,688

Barbarians at the Gate: The Fall of RJR Nabisco by Bryan Burrough, John Helyar

buy and hold, buy low sell high, corporate raider, Donald Trump, Gordon Gekko, margin call, Ronald Reagan, Rubik’s Cube, shareholder value, South Sea Bubble

If he wasn’t the consummate takeover tactician, Waters’s easygoing manner, forthright attitude, and sincerity—a rarity among his ilk—made him a favorite of Johnson, whom he had known since Standard Brands. J. Tomilson Hill III, Harvard College, Harvard Business School, was the warrior of the pair, a zealot for the Wall Street trenches. To enemies—and he had a few—Tom Hill came across as an oiled-back Gordon Gekko haircut atop five feet, ten inches of icy Protestant reserve. Hill was well tailored and proud of it; “the best-dressed man on Wall Street” a competitor called him, and Hill wore his dark Paul Stuart suits like armor. His office was all cool modern art and Lucite-encased tombstones commemorating past victories. Hill could be charming but rarely glib; sometimes it seemed as if he chose every word from a dictionary.


pages: 677 words: 206,548

Future Crimes: Everything Is Connected, Everyone Is Vulnerable and What We Can Do About It by Marc Goodman

23andMe, 3D printing, active measures, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, algorithmic trading, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, Bill Joy: nanobots, bitcoin, Black Swan, blockchain, borderless world, Brian Krebs, business process, butterfly effect, call centre, Charles Lindbergh, Chelsea Manning, cloud computing, cognitive dissonance, computer vision, connected car, corporate governance, crowdsourcing, cryptocurrency, data acquisition, data is the new oil, Dean Kamen, disintermediation, don't be evil, double helix, Downton Abbey, drone strike, Edward Snowden, Elon Musk, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, future of work, game design, global pandemic, Google Chrome, Google Earth, Google Glasses, Gordon Gekko, high net worth, High speed trading, hive mind, Howard Rheingold, hypertext link, illegal immigration, impulse control, industrial robot, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jaron Lanier, Jeff Bezos, job automation, John Harrison: Longitude, John Markoff, Joi Ito, Jony Ive, Julian Assange, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kuwabatake Sanjuro: assassination market, Law of Accelerating Returns, Lean Startup, license plate recognition, lifelogging, litecoin, low earth orbit, M-Pesa, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Metcalfe’s law, MITM: man-in-the-middle, mobile money, more computing power than Apollo, move fast and break things, move fast and break things, Nate Silver, national security letter, natural language processing, obamacare, Occupy movement, Oculus Rift, off grid, offshore financial centre, optical character recognition, Parag Khanna, pattern recognition, peer-to-peer, personalized medicine, Peter H. Diamandis: Planetary Resources, Peter Thiel, pre–internet, RAND corporation, ransomware, Ray Kurzweil, refrigerator car, RFID, ride hailing / ride sharing, Rodney Brooks, Ross Ulbricht, Satoshi Nakamoto, Second Machine Age, security theater, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, smart meter, Snapchat, social graph, software as a service, speech recognition, stealth mode startup, Stephen Hawking, Steve Jobs, Steve Wozniak, strong AI, Stuxnet, supply-chain management, technological singularity, telepresence, telepresence robot, Tesla Model S, The Future of Employment, The Wisdom of Crowds, Tim Cook: Apple, trade route, uranium enrichment, Wall-E, Watson beat the top human players on Jeopardy!, Wave and Pay, We are Anonymous. We are Legion, web application, Westphalian system, WikiLeaks, Y Combinator, zero day

What the hell just happened? When the news of an explosion at 1600 Pennsylvania Avenue broke, the market suspected a probable terrorist attack and immediately foresaw the profound negative impact it would have; after all, 9/11 was estimated to have cost America $3.3 trillion in economic losses. Traders immediately began dumping their shares, and the exchanges went into free fall. But these traders weren’t the Gordon Gekko, masters-of-the-universe types with slicked-back hair and $10,000 suits of yesteryear. In fact, they weren’t even human. At hedge funds, investment banks, and pension funds across the tristate area and around the world, networks of supercomputers were doing the trading en masse, slaves to their algorithmic programming. Gekko and the majority of his human lot on the trading floors lost out to computers in 1999, replaced by ultrafast electronic high-frequency trading (HFT) platforms.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Basel III, Black Swan, blood diamonds, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Gordon Gekko, hiring and firing, income inequality, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, pension reform, performance metric, pirate software, plutocrats, Plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

Rand urged acolytes to reject as immoral any religious or ethical discomfort they might feel from the ensuing growing disparities in wealth or the human condition, certain to follow from the abandonment of altruism in executive suites or in the public square. Phillips-Fein concludes: “Her work offers a way of making sense of a profoundly unequal society, of making it tolerable, even virtuous.” Ayn Rand’s philosophy spread throughout much of the financial and political elite in the Reagan era. Even many who never heard of Rand came to hear of and embrace her philosophy, as embodied by Gordon Gekko, a character in Oliver Stone’s 1987 film, Wall Street: “The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”


pages: 801 words: 209,348

Americana: A 400-Year History of American Capitalism by Bhu Srinivasan

activist fund / activist shareholder / activist investor, American ideology, Apple II, Apple's 1984 Super Bowl advert, bank run, barriers to entry, Berlin Wall, blue-collar work, Bob Noyce, Bonfire of the Vanities, British Empire, business cycle, buy and hold, California gold rush, Charles Lindbergh, collective bargaining, commoditize, corporate raider, cuban missile crisis, Deng Xiaoping, diversification, diversified portfolio, Douglas Engelbart, financial innovation, fixed income, Ford paid five dollars a day, global supply chain, Gordon Gekko, Haight Ashbury, hypertext link, income inequality, invisible hand, James Watt: steam engine, Jane Jacobs, Jeff Bezos, John Markoff, joint-stock company, joint-stock limited liability company, Kickstarter, laissez-faire capitalism, Louis Pasteur, Marc Andreessen, Menlo Park, mortgage debt, mutually assured destruction, Norman Mailer, oil rush, peer-to-peer, pets.com, popular electronics, profit motive, race to the bottom, refrigerator car, risk/return, Ronald Reagan, Sand Hill Road, self-driving car, shareholder value, side project, Silicon Valley, Silicon Valley startup, Steve Ballmer, Steve Jobs, Steve Wozniak, strikebreaker, Ted Nelson, The Death and Life of Great American Cities, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, trade route, transcontinental railway, traveling salesman, Upton Sinclair, Vannevar Bush, Works Progress Administration, zero-sum game

Family Ties, the second-highest-rated show on television in the mid-1980s, starred Michael J. Fox as Alex P. Keaton, a precocious and charming ball of comically moneyed ambition. Tom Wolfe’s The Bonfire of the Vanities spent several weeks at number one on the New York Times best-seller list in 1988. Its main character was a top-producing bond trader, a “Master of the Universe” in Wolfe’s telling. Oliver Stone’s Wall Street gave American cinema one of its most memorable antiheroes in Gordon Gekko, played by Michael Douglas. The fall of Gekko starts with his attempt to take over an airline, a story line loosely based on Icahn’s efforts at TWA. Douglas would lament the fact that even decades later, men would approach him in restaurants to tell him how inspired they were by his role—to pursue a career on Wall Street. Even romantic films found finance to be fertile ground for character redemption.


pages: 721 words: 238,678

Fall Out: A Year of Political Mayhem by Tim Shipman

banking crisis, Beeching cuts, Bernie Sanders, Boris Johnson, centre right, Clapham omnibus, Corn Laws, corporate governance, Dominic Cummings, Donald Trump, drone strike, Etonian, eurozone crisis, Gordon Gekko, greed is good, iterative process, John Bercow, Kickstarter, kremlinology, land value tax, mutually assured destruction, Neil Kinnock, new economy, non-tariff barriers, offshore financial centre, open borders, quantitative easing, Ronald Reagan, Snapchat, working poor

On a WhatsApp group shared by Eurosceptic MPs, Sir Gerald Howarth wrote with withering sarcasm, ‘A man of his immense ability can surely speak for Cheshire and London before lunch, advise BlackRock over lunch and tender his invaluable advice to the House after lunch before holding a dinner party for the bien pensant remainians of Notting Hill in the evening. Sorted.’ Iain Duncan Smith posted a picture of Michael Douglas’s character from the film Wall Street, the celluloid monument to eighties excess: ‘Hmmm … why do I keep thinking of Gordon Gekko … greed is good.’ Osborne’s reputation for ruthlessness was confirmed when it emerged that he had recommended the political journalist Matthew d’Ancona to Evgeny Lebedev, the owner of the Standard. D’Ancona was on the verge of getting the job when Osborne decided he fancied it himself.1 Seeing the benefit of having a big name in the post, Lebedev was ‘immediately sold on the idea’. The prime minister’s official spokesman, James Slack, was rendered speechless when the news was broken to him in his regular morning briefing.


pages: 827 words: 239,762

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by Duff McDonald

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Albert Einstein, barriers to entry, Bayesian statistics, Bernie Madoff, Bob Noyce, Bonfire of the Vanities, business cycle, business process, butterfly effect, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate raider, corporate social responsibility, creative destruction, deskilling, discounted cash flows, disintermediation, disruptive innovation, Donald Trump, family office, financial innovation, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, global pandemic, Gordon Gekko, hiring and firing, income inequality, invisible hand, Jeff Bezos, job-hopping, John von Neumann, Joseph Schumpeter, Kenneth Arrow, Kickstarter, London Whale, Long Term Capital Management, market fundamentalism, Menlo Park, new economy, obamacare, oil shock, pattern recognition, performance metric, Peter Thiel, plutocrats, Plutocrats, profit maximization, profit motive, pushing on a string, Ralph Nader, Ralph Waldo Emerson, RAND corporation, random walk, rent-seeking, Ronald Coase, Ronald Reagan, Sam Altman, Sand Hill Road, Saturday Night Live, shareholder value, Silicon Valley, Skype, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, survivorship bias, The Nature of the Firm, the scientific method, Thorstein Veblen, union organizing, urban renewal, Vilfredo Pareto, War on Poverty, William Shockley: the traitorous eight, women in the workforce, Y Combinator

Of course, in the mid-1980s, McKinsey had more competition than just other consulting firms at the School. Wall Street was starting to embark on what would prove to be a twenty-year bull market, and the money-seeking missiles that are MBAs were showing their “leadership” in redirecting their job-seeking energies toward investment banking and trading before Michael Douglas had even graced the big screen as Gordon Gekko in 1987. Of the class of 1986, 29.4 percent took jobs on the Street, versus 17.5 percent who went into consulting. The HBS-McKinsey route has produced a number of standouts. A handful of the business world’s most prominent CEOs have made their way to the top right through it. At McKinsey itself, four managing directors have come that way: Marvin Bower, Ron Daniel, Al McDonald, and Rajat Gupta.


pages: 898 words: 266,274

The Irrational Bundle by Dan Ariely

accounting loophole / creative accounting, air freight, Albert Einstein, Alvin Roth, assortative mating, banking crisis, Bernie Madoff, Black Swan, Broken windows theory, Burning Man, business process, cashless society, Cass Sunstein, clean water, cognitive dissonance, computer vision, corporate governance, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, delayed gratification, Donald Trump, end world poverty, endowment effect, Exxon Valdez, first-price auction, Frederick Winslow Taylor, fudge factor, George Akerlof, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, IKEA effect, Jean Tirole, job satisfaction, Kenneth Arrow, knowledge economy, knowledge worker, lake wobegon effect, late fees, loss aversion, Murray Gell-Mann, new economy, Peter Singer: altruism, placebo effect, price anchoring, Richard Feynman, Richard Thaler, Saturday Night Live, Schrödinger's Cat, second-price auction, Shai Danziger, shareholder value, Silicon Valley, Skype, software as a service, Steve Jobs, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, ultimatum game, Upton Sinclair, Walter Mischel, young professional

The scary thought is that if we did the experiments with nonmonetary currencies that were not as immediately convertible into money as tokens, or with individuals who cared less about their honesty, or with behavior that was not so publicly observable, we would most likely have found even higher levels of dishonesty. In other words, the level of deception we observed here is probably an underestimation of the level of deception we would find across a variety of circumstances and individuals. Now suppose that you have a company or a division of a company led by a Gordon Gekko character who declares that “greed is good.” And suppose he used nonmonetary means of encouraging dishonesty. Can you see how such a swashbuckler could change the mind-set of people who in principle want to be honest and want to see themselves as honest, but also want to hold on to their jobs and get ahead in the world? It is under just such circumstances that nonmonetary currencies can lead us astray.