"The market can remain irrational longer than you can remain solvent."
This quote emphasizes that financial markets, driven by the collective behavior of investors, can behave in ways that are not rational or logical for extended periods, much longer than any individual or institution can afford to withstand such market conditions without facing financial distress. It's a reminder that irrationality in the market should be anticipated and factored into investment strategies, rather than relying solely on rational analysis and long-term forecasting.
"What's going on in the financial markets right now is like a game of global hot potato being played with a flaming potato."
The quote suggests that the financial market dynamics are analogous to a rapidly passing "hot potato" game, but instead of an ordinary potato, it's a flaming one. This implies intense volatility and risk, as if the financial assets are overheated and dangerous to hold onto for long. It also highlights the rapid and unpredictable transfer of responsibility or burden among market participants, reflecting the uncertainty and instability inherent in global financial systems during times of crisis.
"Wall Street is essentially a giant casino and it's always open."
This quote suggests that Wall Street, a symbol for the U.S. financial industry, is fundamentally a gambling establishment where money is continuously traded and invested, much like a casino. The metaphor highlights the risk-taking and speculative nature of financial markets, implying that they function without defined hours or restrictions. This perspective underscores the potential volatility and unpredictability inherent in finance, emphasizing that participants may lose their investments just as easily as they can win.
"In the world of Wall Street, the loudest voices often carry the day."
The quote implies that in the financial world of Wall Street, the opinions or arguments expressed with the most volume or aggressiveness tend to be given significant weight or influence over other, potentially more sound but less vociferous perspectives. This can lead to decisions or trends being driven by influential figures or entities rather than by the best interests or informed judgement of all parties involved. It suggests a system where power and influence can sometimes overshadow reason and fairness.
"The markets are a voting machine in bull markets and a weighing machine in bear markets."
This quote suggests that financial markets, when performing well (bull markets), behave like a voting system where investors are more likely to buy based on optimism or popular opinion. In contrast, during downturns (bear markets), the markets function more like a weighing scale, with investors carefully evaluating and assessing the value of their investments before making decisions. The implication is that market sentiment plays a significant role in bull markets, while fundamentals and intrinsic values become more important in bear markets.
Here's the perversity of Wall Street's psychology: The more Wall Street is convinced that Washington will act rationally and raise the debt ceiling, most likely at the 11th hour, the less pressure there will be on lawmakers to reach an agreement. That will make it more likely a deal isn't reached.
- Andrew Ross Sorkin
Corporate tax reform is nice in theory but tough in practice. It most likely requires lower tax rates and the closing of loopholes, which many companies are sure to fight. And whatever new, lower tax rate is determined, there will probably be another country willing to lower its rate further, creating a sad race to zero.
- Andrew Ross Sorkin
No one suggested Lehman deserved to be saved. But the argument has been made that the crisis might have been less severe if it had been saved, because Lehman's failure created remarkable uncertainty in the market as investors became confused about the role of the government and whether it was picking winners and losers.
- Andrew Ross Sorkin
Hank Paulson, obviously, had spent his career on Wall Street, had a deep knowledge of the Street, and also was a very forceful personality, had a very good relationship with the president, and was in a very different place, for example, than Ben Bernanke, who is an academic, quiet guy: spent most of his time thinking about monetary policy.
- Andrew Ross Sorkin
Under the Foreign Corrupt Practices Act, a company is not allowed to provide a personal benefit to a decision maker in return for business. But hiring the sons and daughters of powerful executives and politicians is hardly just the province of banks doing business in China: it has been a time-tested practice here in the United States.
- Andrew Ross Sorkin
The moment a large investor doesn't believe a government will pay back its debt when it says it will, a crisis of confidence could develop. Investors have scant patience for the years of good governance - politically fraught fiscal restructuring, austerity and debt rescheduling - it takes to defuse a sovereign-debt crisis.
- Andrew Ross Sorkin
Bringing back something akin to Glass-Steagall would clearly help limit risk in the system. And that's a very good and worthy goal. Letting banks sell securities and insurance products and services allowed them to grow too big too fast and fueled a culture that put profit and pay over prudence.
- Andrew Ross Sorkin
What if the slowdown in merger activity isn't cyclical, but secular? What if corporations have learned the lessons of so many companies before them that the odds of a successful merger are no better than 50-50 and probably less? Is it possible that the biggest deals have already been done?
- Andrew Ross Sorkin
In truth, in the fairy-tale version of bailing out Lehman, the next domino, A.I.G., would have fallen even harder. If the politics of bailing out Lehman were bad, the politics of bailing out A.I.G. would have been worse. And the systemic risk that a failure of A.I.G. posed was orders of magnitude greater than Lehman's collapse.
- Andrew Ross Sorkin
In September 2008 - as Lehman Brothers filed for bankruptcy and AIG, the world's biggest insurance company, accepted a federal bailout - Senator John McCain of Arizona, in what was widely viewed as a political move, suspended his presidential campaign and called on Obama to rush back to Washington for a bipartisan meeting at the White House.
- Andrew Ross Sorkin
TARP became so politicized that having money from it was almost like a scarlet letter. There were debates over compensation, worry that the rules were going to get changed. All the banks were desperately rushing to get that money back as soon as possible - in part, so they could pay themselves bonuses without any government restrictions.
- Andrew Ross Sorkin
Before the web and these highly focused entities, journalists got to decide what was important to tell their audience and educated their readers. Now, journalists have to try and understand what their consumer actually wants to read and what angle they are looking for in order to keep audiences engaged in a highly competitive world.
- Andrew Ross Sorkin
The genre of narrative business books that I love so much - the ones that have a you-are-there quality - was invented, or so it is said, in 1982 by David McClintick, who wrote 'Indecent Exposure,' a rollicking good read about a Hollywood scandal and the ultimate boardroom power struggle at Columbia Pictures.
- Andrew Ross Sorkin
Unfortunately, I think it's very difficult to separate policy from politics. In a perfect world, in some instances, you probably would want to. In other instances, you'd probably say that the political element is important because it should, in a perfect world, match what the stakeholders need or want, or what the public is after.
- Andrew Ross Sorkin
I think, with Hank Paulson, the concept of a bailout was anathema to him from day one. He was a Republican; he's a free marketeer. He believes in capitalism, and part of capitalism is believing in failure. And so the idea of bailing out an institution, I think, went against every part of him.
- Andrew Ross Sorkin
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