Michael Lewis' "Beware of Greeks Bearing Bonds"

"THESE Guys are Good for $250k Apiece?? C'mon" *

Like a lot of people who come to Vatopaidi, I suppose, I was less than perfectly sure what I was after. I wanted to see if it felt like a front for a commercial empire (it doesn’t) and if the monks seemed insincere (hardly). But I also wondered how a bunch of odd-looking guys who had walked away from the material world had such a knack for getting their way in it: how on earth do monks, of all people, wind up as Greece’s best shot at a Harvard Business School case study?

--Michael Lewis, "Beware of Greeks Bearing Bonds"; (Vanity Fair, October, 2010)

It takes away nothing (OK, just a little) from Lewis' insight-filled take on an obscure group of Greek monks living in a remote Greek monastery called "Vatopaidi" to give away the answer.

Namely, the reason the monks warrant an HSB case study is, they amassed a real estate empire by learning comproming things about high-placed Greek officials, then leveraging that knowledge --plus possibly some bribes -- into a string of sweetheart government deals.

Not much more to it than that.

But how Lewis lays bare Greek culture, and in particular how it was perverted by the world boom in cheap credit, is certainly worth the trip.

Plus, lots of piquant Lewis-ism's like the following:

The monks eat like fashion models before a shoot. Twice a day four days a week, and once a day for three: 11 meals, all of them more or less like this. Which raises an obvious question: Why are some of them fat?

If you want to find out the answer to that one . . . you'll have to read the full article.

*That's how much Greece's $1.2 trillion national debt come to per person.

How to Read Vanity Fair

(Pretty) Picture Book

Before I bought the current issue of Vanity Fair (to read Michael Lewis' new article), I never understood why the cover included not just the featured articles, but their page numbers: because the cover is also the table of contents.

Or more accurately, it's one of two tables of contents; the second one appears literally 45 pages into the magazine, preceded by 44 pages of various beautiful people modeling lots of beautiful clothes.

Then, you discover that the interior table of contents is divided into pieces, with still more advertising squeezed in between.

Finally, somewhere around page 100 -- the actual articles begin.

It's annoying only until you realize that the editors have given readers a way to circumvent all those ads, via their cover/table of contents.

But I've got a guess, they don't (skip all those beautifully shot, fetching ads -- that is).

Next: Michael Lewis' article: all journey, no destination

Vanity Fair on Goldman Sachs

Recessions Happen, Crashes Have Causes

Here are my thoughts/reactions after reading "The Bank Job: Goldman's Elite on the Crisis and Bonus Rage," by Bethany McLean in the January, 2010 issue of Vanity Fair (it's online now).

That is, once I gargled to get the bad taste out of my mouth.

One. If your agenda is to rebut the (now widely held) notion that Goldman Sachs exerts altogether too much influence over U.S. fiscal and monetary policy -- with highly placed alumni in (or heading!) virtually every significant regulatory or policy-setting body (Treasury, Federal Reserve, New York Fed, Securities & Exchange Commission, Commodity Futures Trading Commission, the New York Stock Exchange, etc.) -- you might want to commission an article written by someone . . . OTHER THAN A FORMER GOLDMAN SACHS EMPLOYEE! (true -- McLean used to be an analyst there).

Two. Give McLean her due: she knows what makes these guys tick (or at least sounds like she does).

According to her, senior Goldman Sachs executives actually feel they're underpaid.

Why is that?

Not because their frame of reference is the millions of Americans who've lost their homes (due in good measure to a credit bubble Goldman Sachs helped inflate -- and profited from hugely).

Nor is it the tens of millions of Americans on food stamps, in the toughest economy since The Great Depression.

(Sorry, I'm not buying "The Great Recession." I prefer "The Crash of '08." Recessions happen, like the weather. By contrast, crashes have causes (and perpetrators, and abettors, and . .)

"Goldman Pay Offensive'

Rather, Goldman Sachs' senior executives feel that getting anywhere from $20 million to more than triple that, apiece(!), this year -- this year, 2009 -- is defensible, appropriate, and even justified because . . . the biggest hedge fund guys are making $500 million or even $5 billion apiece. This year.

The really rich part? (sorry, bad pun)

In many cases, they made those billions by shorting -- betting against -- the housing market.

Need to cancel lunch yet?

P.S.: For a second this morning, I thought it must be April Fool's Day, or that I grabbed the wrong newspaper (The Onion, maybe, instead of The Wall Street Journal); after all, the headline read "Goldman Pay Offensive."

Well, not exactly. I have (very) mild dyslexia, and in my quick-browse mode transposed the actual headline:

"Goldman Seizes the Offensive on Pay"

Hamptons for $375k!

How the Upper .25% Live

I quickly browse a lot of real estate-related material, but when I came across "Hamptons" and "$375,000" in the same sentence, I slowed down.

If you don't know, the Hamptons in Long Island is (summer) home to Wall Street's -- and Manhattan's -- rich and famous, and home prices there routinely trip eight figures (as in $10M-plus). Or did.

Which was the import of the article ("The Hamptons Stress Test" - Vanity Fair). Not so surprisingly, Wall Street's crash has hit Long Island real estate; as a result, prices (and deals) have plummeted.

Still, "Hamptons" and "$375,000" simply don't go together.

The catch?

That's not a sale price. It's a rental price. For one month.

To be fair, the property (pictured at top) fronts the ocean, and the month in question is August.