Like millions of other people, I am trying to understand what caused the meltdown on Wall Street. It is hard to comprehend that people with some of the sharpest brains and excellent education can screw up so bad.
Maybe the answer might come from people like Andrew Lahde, the hedge-fund manager who quit after posting an 870% gain last year. For fear of being charged with crimes or being unable to find another job, most Wall St. executives are talking only to trusted friends, but Lahde has gone public with his disdain for the investment banker types.
Here are some excerpts from a letter that he sent out. He thanked stupid traders for making him rich. He told investors last month he was returning their cash because the risk of using credit derivatives — his means of betting on the falling value of bonds and loans, including subprime mortgages — was too risky given the weakness of the banks he was trading with.
Highlighting the greed on Wall Street rather than creation of shareholder value, Lahde writes, “I was in this game for money… The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government…All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God Bless America.”