Wednesday, 16 February 2011

big merv

It's not my fault if you haven't read everything Michael Lewis has ever written. His books on high finance, Liar's Poker and The Big Short top-and-tail the mortgage-crisis. The former describes the guys who invented mortgage-derivatives in the 1980s, when Lewis worked briefly in a bank. The latter describes some people who made a fortune by seeing that it was going to implode. This is from Tim Harford's interview with Lewis for the FT:
Although there is outrage in Lewis’s descriptions of high finance, it is muted by the fact that he seems to regard much of life on Wall Street as risible. His former tutor at the London School of Economics, a certain Mervyn King, didn’t always see the funny side.

“Four or five months after I got the job at Salomon, the head of the London office comes over to me and says, ‘We’ve got this guy in the lobby. He’s the academic adviser to the new FSA, and he’s been sent in to see how the markets really work and nobody wants to sit with him. Could you sit with him?’ It was Mervyn.”

After three hours “listening to me selling people stuff”, King asked what Lewis was paid.

“It was two-and-a-half times what they were paying him to teach me at LSE. And he was, ‘This is just criminal, this is outrageous.’ He couldn’t believe it.”

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