- Old-fashioned "character lenders" found that their business was boring and unprofitable, and harder work than "originate and distribute."
- The new logic of diversification/securitization made O&D look respectable.
- Without intending or planning for it, proprietary traders to their stunned surprise found themselves driving the banking bus.
- Michael Milken showed us that you don't have to restrict your corporate loans to Episcopalians.
- Old-fashioned investment bankers, with too much money on their hands, figured out how to go shopping for deals, rather than waiting for deals to shop them.
[Update: You bet. I forgot about incorporation, i.e., limited liability, i.e., heads I win, tails you lose.]
1 comment:
Well yes, you've left out one importanty thing:
Lower tax rates on very high incomes made taking big risks, especially with other peoples' money, vastly more attractive.
If we ever get a 90% bracket, the whole banking/Wall Street insanity syndrome will cease.
Tax the bastards!
Yours very crankily,
The New York Crank
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