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David L. Miller wrote:
> Only problem, of course, is that every one of these people are every bit
> as much to blame as Meriwether for taking such a gamble. Meriwether was
> just the dealer; the Good Ole Boys were the casino; and individual
> investors were unwitting players betting, once more, against an
> already-rigged House...if things went well, everyone would Win Big (the
> Draw); if things turned South, individual investors would bear the brunt
> of the blow (the Rig).
Dave:
You have the right take on this issue--Although Meriwether got caught taking a
roll too large for his capital [by a factor of ten, maybe], the real crime was
committed by the people that put their firm's money and health at risk by not
practicing good risk management. Who was watching the cookie jar?? NO ONE.
If you, as an investor or a lender, are going to give a trader enough rope to
hang himself, don't give him enough rope TO HANG YOU.
And you're right: The financial rags that have covered this crisis should be
ashamed for dressing up the scenes with such schlock as: "in a big, wood-paneled
room with pictures of past Federal Reserve presidents on the wall." They should
have told the truth. I've been in those meetings, and the one thing I remember
is that the people being forced to make career-threatening decisions usually are
soaking wet with sweat. Perhaps they could have reported that, 'Each of the
managers sat hunched over the burled walnut antique table, a puddle of water
pooled just below their chins from the constant drip of sweat...'
Best,
Tim Morge
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