The era that defined Wall Street is finally, officially over. Michael Lewis, who chronicled its excess in Liar's Poker, returns to his old haunt to figure out what went wrong. To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital-to decide who should get it and who should not. Believe me when I tell you that I hadn't the first clue. I'd never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon ...

This is no ordinary slump, says Bill Bonner. We face a “balance sheet recession”, where banks, businesses and investors are forced to cut back after suffering huge losses. Bill says this will take years to sort out. And government efforts to delay the inevitable will just draw out the ordeal.

This from The Daily Reckoning:

Obama is lucky he wasn’t elected a year ago. At least now it is clear that he’s innocent. He comes to the office facing problems not of his own making. Instead, they were made by his predecessors – notably, Alan Greenspan and George W. Bush. Working together, the two bumblers squandered America’s fortune, drove off her industry, and put just about everyone deeper in debt than ever in history. Did two more hapless, more incompetent, more conniving half-wits ever before conspire to create such a mess?

Alan Greenspan courted power and fame. He got

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Hedge Fund DiscussionHedge Fund Discussion PieceI can't tell if Mr. Berko is for or against hedge funds, I will leave it up to you to decide....Dear Mr. Berko: There's big trouble in the $3 trillion hedge fund industry. Many have lost massive amounts of money because the market has gone against them and thousands of hedge fund employees are losing their jobs. The Hedge Fund Sector is a very vital sector of our economy and I've not heard a word from the Department of Treasury or the Federal Reserve about helping the hedge fund industry in this economic crisis. In 2000, then Federal Reserve Board Chairman Alan Greenspan rescued Long Term Capital Management and saved it from complete collapse. Many hedge-fund investors can't get their investments back because the hedge funds can't get the credit they need to finance their ...

The $800 billion bailout, and billions more being pumped less obviously into the global economy, will cure nothing. Americans are clamoring for a savior. No one is willing to believe that the party is over. In the past, someone always came to our rescue.

Like a parent dispelling a childhood nightmare, FDR soothed the masses with the assurance that they had nothing to fear but fear itself. To this day, he is revered for turning a depression into the Great Depression. In the aftermath of the dot-com bubble, Fed Chairman Alan Greenspan came to the rescue with a brand-new bubble in real estate.

Even if there was someone out there who could pull off one more illusionary rescue, it would only delay the inevitable and worsen the pain. Pain now or more pain later. The compassionate solution is to let Adam Smith’s invisible hand guide us, as should have been happening all

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The $800 billion bailout, and billions more being pumped less obviously into the global economy, will cure nothing. Americans are clamoring for a savior. No one is willing to believe that the party is over. In the past, someone always came to our rescue.

Like a parent dispelling a childhood nightmare, FDR soothed the masses with the assurance that they had nothing to fear but fear itself. To this day, he is revered for turning a depression into the Great Depression. In the aftermath of the dot-com bubble, Fed Chairman Alan Greenspan came to the rescue with a brand-new bubble in real estate.

Even if there was someone out there who could pull off one more illusionary rescue, it would only delay the inevitable and worsen the pain. Pain now or more pain later. The compassionate solution is to let Adam Smith’s invisible hand guide us, as should have been happening all

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Quote of the Week 1: “He was born to be a senator. He never said anything important, and he always said it sonorously.” - Sinclair Lewis, Elmer Gantry

Quote of the Week 2: “Why reasonable people go stark raving mad when anything involving a Negro comes up, is something I don’t pretend to understand.” - Harper Lee, To Kill a Mockingbird

Nine thoughts on week 44.

1) It’s weird, you can go to Harvard, spend hundreds of hours in pursuit of clearer thinking, then run across something that ties it all together. It’s what you’ve been hearing for years. But it comes out of left field, in a different contextual setting and wham…

So what follows here is thanks to Bob Sutton, author of The No Asshole Rule and a brilliant blog called Work Counts.

I’ve been pretty obsessed about the

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Like many people, I have been looking at the price disparity between the market prices of gold and silver bullion (averaging about $1,000 an ounce for gold and $16.50 an ounce for silver) versus the prices of gold and silver futures (about $730 and $8.90 respectively).

I am thinking to myself that I would love to get a piece of that luscious arbitrage action where I buy the gold and/or silver futures at a low price while simultaneously selling the same gold and/or silver bullion at a higher price, telling the buyers that they must pay in advance and then wait up to a few months for me deliver their gold and silver, pocketing a hell of a lot of money on the buy-sell spread and the interest the money earns until the futures contract matures so that I can take delivery and settle up, and then spend the rest of

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The headlines are awash today with the dramatic quotes from the former Federal Reserve Bank Chairman Alan Greenspan, who in simple and unequivocal language directly assumed some responsibility for the current financial crisis: "I made a mistake." It takes a big man to admit he is wrong, and I think it is commendable to see Greenspan not shy away from accountability. It strikes me as very poignant to think of the deep impossibility of ever seeing Vladimir Putin or any other high ranking Russian official take a similar action, be it for Yukos, the Kursk, Beslan, Nord Ost, the crisis, or any other major problem of contemporary Russia. It would just simply never happen with this administration, and that, in and of itself, is worrying.

Former Federal Reserve Chairman Alan Greenspan, the man who many have blamed for the current financial crisis, appeared before the House Oversight Committee on Thursday enduring a barrage of questioning from lawmakers. Greenspan, who was once lauded as the nation’s premier authority on monetary policy, was all but attacked by incensed legislators. Committee chairman Henry Waxman ignored Greenspan’s explanations stating: “You had the authority to prevent irresponsible lending practices that led to the subprime-mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price.”

Let us hear your thoughts below:

“The Master,” Alan Greenspan, yesterday admitted he made a “mistake.” We wonder if this is the first of such admissions from the former Fed head. Speaking to Congress, the one-time gold bug and Ayan Rand acolyte, said he had found “a flaw in the model” that he perceived “is the critical functioning structure that defines how the world works.”

– Greenspan said it was a “mistake” to believe that banks operating in their self-interest would be enough to protect their shareholders and themselves. He also called the current crisis “once in a century credit tsunami” that he and other policy makers didn’t see coming.

– Isn’t that the problem with policy makers in the first place? They never see things coming. That Greenspan claims not to understand the cause and effect relationship between artificially low interest rates over protracted periods of time and asset bubbles simply isn’t believable.

– The

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