Courtesy of Pam Martens.
(This column, with updates, runs periodically at Wall Street on Parade. Please consider emailing it to friends and family members.)
Yesterday, while at the grocery store, I noticed a large, attractive display of unused hardcover books with a big sign reading: “3 for $10.” As I drew closer, my eye fell on All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera. I swooped up a copy even though I knew I already had one sitting in my bookcase at home.
When I arrived home, I went to the bookcase and looked at the price I had paid when the book first case out in 2011. The price was $32.95.
In my early years on Wall Street, when it actually functioned as an allocator of capital to worthy enterprises, we were trained to look for opportunity by zeroing in on pricing anomalies. Yesterday, in a grocery store, I found such an anomaly. All the Wall Street devils from the crash of 2008, and quite a few new ones, are still with us and yet the public perception is that this book is ancient history worthy of a drastic haircut. The value of the stock market has inflated this year while the value of the knowledge of its inherent, non remedied corruption has deflated by 90 percent.
What does this all mean? It means there is still more serious pain ahead.
Writing in his book, “The Worldly Philosophers,” Robert Heilbroner explained the situation leading up to the depression of the 1930s:
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