I presented my synopsis of Boomerang: Travels in the New Third World, for a group of investors last night. Michael Lewis is a great! story teller. Here are some of his highlights, some of the most enlightening parts, of the story he weaves:
Americans wanted to own homes far larger than they could afford, and to allow the strong to exploit the weak. Icelanders wanted to stop fishing and become investment bankers, and to allow their alpha males to reveal a theretofore suppressed megalomania. The Germans wanted to be even more German; the Irish wanted to stop being Irish. All these different societies were touched by the same event, but each responded to it in its own peculiar way. No response was as peculiar as the Greeks’, however…
Here’s a look at the deep hole in Greece:
The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. (and) …more than six hundred Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on.
And here’s the deep corruption in Greece. He described, with great detail, that the corruption in Greece ran deeply through every sector of the society, from the priests and the monks, to the public officials, to the doctors…to everyone.
It’s simply assumed, for instance, that anyone who is working for the government is meant to be bribed. People who go to public health clinics assume they will need to bribe doctors to actually take care of them. Government ministers who have spent their lives in public service emerge from office able to afford multi-million-dollar mansions and two or three country homes.
And in California:
“What all the polls show is that people want services and not to pay for them. And that’s exactly what they have now got.”
So – what is the solution? Here’s a hint, from Iceland – put more women in charge of the money, and keep men away from the purse strings…
What they found, in a nutshell, is that men not only trade more often than women but do so from a false faith in their own financial judgment. Single men traded less sensibly than married men, and married men traded less sensibly than single women: the less the female presence, the less rational the approach to trading in the markets. One of the distinctive traits about Iceland’s disaster, and Wall Street’s, is how little women had to do with it. Women worked in the banks, but not in the risk-taking jobs. Today her firm is, among other things, one of the very few profitable financial businesses left in Iceland. After the stock exchange collapsed, the money flooded in. A few days before we met, for instance, she heard banging on the front door early one morning and opened it to discover a little old man. “I’m so fed up with this whole system,” he said. “I just want some women to take care of my money.”
Boomerang – it’s really worth the time to read this book. Take a look.