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“Ghosts of Manhattan” author Douglas Brunt gives a behind the scenes look at Wall Street and what lead to the financial collapse in 2008.
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The salad days the good times and Wall Street before the 2008 financial collapse.
Well the new blood -- of Manhattan takes readers back -- events taking place at a C.
Unstoppable Bear Stearns.
Well before Dodd-Frank her Occupy Wall Street.
It is a look inside -- gilded but also jaded lifestyle -- experience or even know much about.
Joining me now is author Douglas -- thanks so much coming on the show.
I read book I love it's.
It say it seemed real inside a Wall Street account of the access in the lifestyle.
That I think a lot of people who are outside even lower Manhattan.
Don't necessarily know about how do you -- so much about it.
I have.
I did both primary and secondary research that -- -- -- primary through much of friends who are on Wall Street many in sales and trading -- they recognize themselves in this book are you in trouble now now I didn't and it none of the characters in the book are.
The you know associated directly with any of my friends -- -- I know it's just an amalgamation of stories that these guys helped me shape and that I've.
Had this front row seat for -- the last decade plus in and.
Talking huge have a direct line between that you know the lifestyles.
And even the values the folks that are trading bonds and what happened in even though you do say there's a lot of blame to go around here there's people who bought houses they couldn't afford it.
You know there's the government you know pushed loans on people are promoted.
Homeownership as a value.
But doesn't doesn't -- to go back and sort of vilified folks.
So it after the fact is we're trying to clean up the mess.
-- -- -- -- The system much more so than any individuals if there's a line in the novel from a character who says that if you compensate a person based on volume.
He's going to give you volume and it's the same as their greed is good.
Argument greed is good because it creates a predictable behavior and executives can manage.
Predictable behavior to a successful outcome.
And what if you look at all the players leading up a financial collapse here yet wait.
Everyone acted exactly as you would predict except for Moody's and standard and poor who were you know out to -- -- -- -- all the traders at Bear Stearns all the folks at AIG under rating underwriting derivatives and so in terms.
All acted exactly according to their job descriptions in a way to maximize.
Their bonus and see you can't fault.
-- for -- of the system it's supposed this is a must I don't I don't wait several behavior that failed.
That -- that -- a very obvious question has anything changed since the financial -- do you think the system has changed.
-- the behavior has changed.
No to both I think that.
They're making some efforts a minute -- that the main problem with compensation is that there's this.
Lack of alignment are insufficient alignment between the time horizon for Howard trader's activities are compensated which is an annual generate -- -- First at the time horizon for the effects those activities have on the longer view of -- company's health.
So for example 20062007.
-- years of record bonuses on Wall Street and Lehman Brothers paid out record rate bonuses.
And -- much of those bonuses paid out were on trading activity that led to the firm blowing up in the following year.
Yeah.
What you wanna fictionalized.
What happened in real life for me now that's what I think is most -- about this book because there's so many accounts out there right now of the actual time that are kind of boring and this is a great way of learning about what happened and really understanding it.
But getting wrapped up in a fiction where I read it you know basically overnight it's one of those books that grabs you -- -- doing a fictionalized it.
Whether it is a personal story it's it's not about to collapse its paper is about a bond salesman's personal journey during that period of collapse I think when people read fiction now they want to also learn something yeah.
That era is fascinating and I think for the first time.
You know if you looked at 2007 number of people who had even heard the name Bear Stearns -- we -- -- this or that there's this thing called the Fed can do things.
And then looked at that same thing in 2009 it was tenfold more in our.
The these issues became headlines on not just business news but all news after the 08 collapse.
As -- people want to learn more about it and it's interesting to take eight.
You know personal journey that anyone of -- could have.
And said it within this context.
Douglas brown author of ghost of Manhattan thanks for coming on it was a great read really enjoyed and -- -- eight.
Well it is it.
