Michael Lewis Quotes

I mean, they were getting the mortgage of some guy in Omaha, you know, securitized a couple of times. I mean he had all these - they had all these types from Wall Street, you know, and they had advanced degrees, and they look very alert, and they came with these - they came with these things that said gamma and alpha and sigma and all that. And all I can say is beware of geeks, you know, bearing formulas. They've heard that in Europe.

The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.

Securitization was one of the most brilliant financial innovations of the 20th century. It freed up a lot of capital. If it had been done responsibly, it would have been a wondrous thing because nothing is more stable, there’s nothing safer, than the American mortgage market.... It worked for years. But then people realized they could scam it.

It appears to me that no one has learned a thing; that Wall Street is still operating as if 2008 never happened.

Most people understand that Lehman Brothers didn't collapse because Gordon Brown built too many schools and hospitals.

The people who did the collateralized mortgage obligations, sold them to pension funds, then sold them short, then bought credit default swap insurance on them, are just amazing. They are a law unto themselves.

What the mortgage bubble was all about was big banks like Goldman Sachs taking big bundles of subprime mortgages that were lent out largely to low-income, highly risky borrowers, and applying this kind of magic-pixie-dust math to these bundles of securities and slapping AAA ratings on them.

Let us not forget, the financial crisis had its roots in the decision by Congress to embark on a course of social justice to get everyone that wanted a home into one, regardless of whether or not they could afford it.

Investigating some of the largest subprime lenders - Wells Fargo, Countrywide, Ameriquest, Household Finance - I've seen how their terrible, toxic loans were closed by any means necessary and eventually packaged, sold as securities, and bet upon until they exploded and decimated our economy.

In early 2005, I really studied the prospectuses of these mortgage pools that were tranched out into different-rated slices rated by agencies like S&P and Moody's. They had names like Park Place and People's Choice. It was clear to me that many of the buyers of these repackaged subprime mortgages were doing little analysis.

Prior to the 2008 recession, many financial institutions were engaging in 'proprietary lending,' where a bank would invest funds for its own gain instead of earning revenue through commission by trading on behalf of clients.

Created by Congress as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB was a direct response to the financial crisis and ensuing Great Recession that began with the subprime mortgage debacle and the unraveling of Lehman Brothers investment bank.

There are a lot of ways that investment banking models work, but these risks are not internalized by the people that are taking them.

Wall Street is not being made a scapegoat for this crisis: they really did this.

What caused the economic collapse 2008? It was the subprime mortgage crisis.

The assumption that Washington could and would resolve Lehman Brothers without a bankruptcy, as it had Bear Stearns, was the single biggest mistake in the series of mistakes in 2007 and 2008 that led to the financial panic and the ensuing epidemic of job losses.

In our equities business, 49 of the 50 most important Lehman clients are back doing business with us. The flows are 75 to 80 per cent of what they were prior to the bankruptcy. The issues which damaged Lehman were around commercial mortgages and illiquid private equity assets.

I never once considered that it was appropriate to put taxpayer money on the line in resolving Lehman Brothers.

If there had been a Financial Product Safety Commission in place 10 years ago, the current financial crisis would have been averted.

If nobody can sell mortgage-backed securities based on trillions of dollars of unpayable instruments, there's a lot less risk in the overall system.

We need to hold Wall Street accountable for issuing the kinds of deceptive loans that nearly brought our economy to its knees in 2008.

I represented Wall Street, as a senator from New York, and I went to Wall Street in December of 2007 - before the big crash that we had - I basically said, 'Cut it out! Quit foreclosing on homes! Quit engaging in these kinds of speculative behaviors.'

The real problems of our economy began when the very smart people of our society went to Wall Street.

If the bankers knew so much about capital markets, how come they got into so much trouble.

You had the Crash [Meltdown] of 2008, where the financial system actually collapsed and had to be put on life support, which consisted of substituting sovereign credit for the financial credit that was no longer credible.