The havoc on Wall Street following the collapse of the subprime-mortgage market boils down to a simple truth: for years, lots of very smart people took lots of very foolish risks, betting borrowed billions on dubious mortgage derivatives, and eventually the odds caught up with them. But behind that simple truth is a more surprising one: the financial whizzes made bad decisions in part because that's what they were paid to do. Full Story »
Posted by Julian Friedland
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Informative piece that doesn't go off the deep end in its critique. Identifies a problem and explains it using seemingly solid academic research.
Incisive, pithy, and frank meditation on the deep ironies of the incentives built into the American high-stakes investment world. Some comparison to European and Japanese alternatives would have been much more enlightening. But this is only a relatively short column.
The statement that the article covering the review of hedge fund manager's performance pay and behavior (witness Cramer) was accurate and complete. The article then tried to apply the same criteria to stock options with little support other than the authors prejudices. The author may have been completely right in this analysis, but had nothing to back it up.
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