So indeed, being a Harvard grad has its potential perks and peaks of power.
Englishman Broughton wrote for a living before stepping into the hallowed foray that is Harvard. As a neophyte to the world of banking, finance, hedge funds and leverage buyouts, he got a crash course in what is the terminology, psychology and manipulations of business numbers, and where it would lead him even before he got started on his two-year trek. As he soon learned, there are no clear answers; just measurements of risk and reward, possibilities defined better, and the balance of what is important to know in business, and in life.
Relating to current financial malaise, a passage from the Ahead of the Curve:
“…I once asked a hedge fund manager in New York about the reckless way credit
was sold to people who could ill afford it. I said they would be ruined. They
would lose their homes and their possessions. Where were the checks on all of
this? What would happen to all these firms lending like crazy when people
stopped paying back their loans? The hedge fund manager looked at me like I was
a madman and said, ‘It’s just economic.’ He meant that over time these borrowers
would learn their lesson. The bankrupted lenders would be bought cheaply by
other investors and turned around. The economic wheel would keep turning, no
matter how many lives had been crushed against it…” (pgs. 232-233)
(2nd aside) How this relates to our current government: During the Bush administration, we have ‘levered up’ the balance sheet of the United States. Taking on more debt, trying (but not succeeding) to trim other programs (those nasty entitlements) while keeping taxes on those multi-millionaires low, even giving a tax holiday to them for a decade. The low-interest rates that spurred out-of-control lending to the non-financially savvy, and the opportunists, that both got caught in the wheels of sub-prime and housing market free falls, has loaded up more debt on the U.S. Treasury balance sheet. We continue to make our interest payments on a $10,000,000,000,000 national debt, of at least $500,000,000,000. But when do we run out of fiat money? (At least if you don’t print and print, devaluing our currency to the point of worthlessness.)
We are now Behind the Eight Ball: What Harvard Business School Did Not Teach President Bush.
With a new President, Obama will have to get well ahead of the curve in order to stave off the impending doomsday scenario discuss on more than one occasion here, and now, at many other media outlets.