Quotes About Finance

Chop house brokers are nomads. The chop house folds or is shut down by the SEC, and its employees move on in a teeming, peristaltic mass.

The simple reason Goldman wasn't making much of the big money now being made in the stock market was that the stock market had become a war of robots, and Goldman's robots were slow.

The SEC, like the public stock exchanges, had a kind of equity stake in the future revenues of high-frequency traders.

Perhaps because they were so enamored of the official rules of finance, the Germans proved especially vulnerable to a false idea the rules encouraged: that there is such a thing as a riskless asset.

Back in 1921 Veblen had predicted that engineers would one day rule the U.S. economy. He argued that since the economy was premised on technology and the engineers were the only ones who actually understood how the technology worked, they would inevitably use their superior knowledge to seize power from the financiers and captains of industry who wound up on top at the end of the first round of the Industrial Revolution.

There is no such thing as a riskless asset. The reason an asset pays a return is that it carries risk.

There was a vividly clear class distinction between tech guys and finance guys. The finance guys saw the tech guys as faceless help and were unable to think of them as anything else.

One of the distinctive traits about Iceland's disaster, and Wall Street's, is how little women had to do with it. Women worked in the banks, but not in the risk-taking jobs.

The accounting rules allowed them to assume the loans would be repaid, and not prematurely. This assumption became the engine of their doom.

Ronan, for his part, couldn't quite believe how ordinary the people on Wall Street were. "It's a whole industry of bullshit," he said.

We kept saying, 'These banks are out of business.' But the government kept saving the banks," he said. "And right in the midst of this Iceland went broke.

Allan confined himself to one investment decision: whether to buy shares in a new company when it went public.

Glass-Steagall was an act of the US Congress, but it worked more like an act of God. It cleaved mankind in two. With it, in 1934, American lawmakers had stripped investment banking out from commercial banking. Investment bankers now underwrote securities, such as stocks and bonds. Commercial bankers, like Citibank, took deposits and made loans. The act, in effect, created the investment banking profession, the single most important event in the history of the world, or so I was led to believe.

I didn't recognize but now know to be Liar's Poker.

This completed the curious reversal in roles that occurred in the early 1980s, when thrifts became traders and traders thrifts.

The relationship of the big Wall Street banks to the high-frequency traders, when you thought about it, was a bit like the relationship of the entire society to the big Wall Street banks. When things went well, the HFT guys took most of the gains; when things went badly, the HFT guys vanished and the banks took the losses.

The interest rate on the loans wasn't high enough to justify the risk of lending to this particular slice of the American population. It was as if the ordinary rules of finance had been suspended in response to a social problem. A thought crossed his mind: How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.

Whatever that guy is buying, I want to short it.

Fear and, to a lesser extent, greed are what make money move.

The only one among them who wrestled a bit with their role—as the guys who had made a fortune betting against their own society—was Vincent Daniel. "Vinny, being from Queens, needs to see the dark side of everything," said Eisman. To

For though there was no chance of persuading a pension fund manager looking to make a longer-term loan to buy a Freddie Mac bond that could evaporate tomorrow, one could easily sell him the third tranche of a CMO.

No longer were the prices of ordinary mortgage bonds allowed to roam inefficiently, for they were now linked to the CMO market, in much the same way that flour is linked to the market for bread. Fair value for CMOs (the finished product) implied a fair value for conventional mortgage bonds (the raw materials).

If everyone on Wall Street abided by the rule's spirit, the rule would have established a new fairness in the U.S. stock market.

Instead of focusing on profits, trading managers focused on revenues.