Web Watch: Michael Lewis, Meredith Whitney, and the End of the World As We Know it

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 By Elizabeth Hemmerdinger

What really started the world-wide financial nuclear reaction?  There’s been no loud explosion, no visible flames, no pore-clogging airborne toxins, but Michael Lewis, the documentarian of Wall Street’s excesses of the ‘80's in his 1990 book Liar’s Poker, offers us an explanation for the recent financial bloodbath. The End of the Wall Street Boom,  on Portfolio.com, is a killer story:  all the more real because it is real, and happening in real time. And the final scene is simply awesome drama – but I won’t spoil it for you.

 It would be easy to turn away from this material as we often have, as seeming to be too complicated for the likes of us.  It isn’t.  Michael Lewis is a great raconteur, and here he makes a long story blunt.   Lewis picks up the narrative of “Liar’s Poker,” which told that John Gutfreund, who took his company, Salomon Brothers (where both Michael Lewis and Michael Bloomberg once worked) public, and sold shares in a company that ought to have stayed private, where the partners would have watched the balance sheet as they traded stocks on our behalf. Instead, with his guidance, they sold shares to people who trusted them, and then soured the holdings for those who held on to them, a faith-based initiative, if ever there was one. Gutfreund and his partners made a killing.  So did the other brokerage houses that followed suit.  And now anyone interested will be able to pick up a bargain suit these characters have consigned to the neighborhood resale shop.  

“The End,” by Michael Lewis, describes in language we can use at the dinner table how greed corrupts not just individuals (remember Michael Douglas as Gekko in “Wall Street?”) but entire cultures — in this case, the culture of financial stewardship. 

And just as young Wall Streeters have seen Gekko as a role model instead of a villain, Lewis writes that "Six months after Liar’s Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They’d read my book as a how-to manual.”

It’s not surprising that  it was a woman who finally blew the whistle: Oppenheimer Funds exec Meredith Whitney, seen below on CNN.

After her July assessment of Citigroup rocked the market, Lewis writes: 

In the nine pages that comprise “The End,” you will know enough to bedazzle at the coffee shop counter and The Four Seasons; no verbal inflation for this writer.  You can read it for free, thanks to the Internet, which is a really good thing, and which even the greed associated with the irrational tech markets couldn’t kill. So we can even wring a wisp of optimism from this dark tale.  

Elizabeth Hemmerdinger is a born-and-bred New Yorker as well as an award-winning playwright and screenwriter. She is the founder of “Behind The Scenes at Tisch,” a program dedicated to developing new works by new writers at New York University, where she received her MFA in 2003. Her plays have been presented in a number of venues in New York and Los Angeles as well as at the Williamstown Theater Festival and The Denver Center. Her full length piece Squall is available through Playscripts, Inc., which is also publishing a volume of her short works this fall. She is currently working with Larry Gatlin on a musical about Rosie the Riveter. Hemmerdinger is a founding board member of Dancing Dreams, a program specially designed for children with physical challenges that focuses on establishing an environment where children, aided by a teenage volunteer, participate in the art of dance, giving them the chance to experience the pure joy of movement. She is affectionately known as “Grambo” to her five delicious grandchildren.