Fraud or Idiot?
Michael Lewis, one of my all-time favorite writers on Wall Street and high-end finance, has a Vanity Fair article on the fall of AIG that I thoroughly recommend.
And yet the A.I.G. F.P. traders left behind, much as they despise him personally, refuse to believe Cassano was engaged in any kind of fraud. The problem is that they knew him. And they believe that his crime was not mere legal fraudulence but the deeper kind: a need for subservience in others and an unwillingness to acknowledge his own weaknesses. “When he said that he could not envision losses, that we wouldn’t lose a dime, I am positive that he believed that,” says one of the traders. The problem with Joe Cassano wasn’t that he knew he was wrong. It was that it was too important to him that he be right. More than anything, Joe Cassano wanted to be one of Wall Street’s big shots. He wound up being its perfect customer.
Also check out Felix Salmon at Reuters, Bonddad, Robert Reich, the Epicurean Dealmaker, Barry Ritholtz, Paul Krugman in the NYT op-ed area and his NYT blog for other voices worth listening to on high finance and economics.