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Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America

Book by Matt Taibbi · 8 quotes · Government, Humanity, Ifs

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Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America Quotes

“Greenspan's eventual explanation for the growing gap between stock prices and actual productivity was that, fortuitously, the laws of nature had changed -- humanity had reached a happy stage of history where bullshit could be used as rocket fuel.”

LawUsedHumanityGrowingStageChangedProductivityExplanationFuelGapsBullshitLaws Of NatureRocketsStock Price
Book:Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
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“The basic scam in the Internet age is pretty easy even for the financially illiterate to grasp. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out fiftieth-story windows, and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.”

IfsStoriesAgeGamesEasyInternetWindowPhonesOpeningWinnerIlliterateRibbonsPavementWrappingScamsMelons
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“The mistake our politicians so often make with these industry leaders is in thinking they are interested in, or respectful of, the power of government. All they want is to keep stealing. If you can offer them the government’s seal of approval on that, they’ll take it. But if you can’t, well, they’ll take that too.”

IfsThinkingWantWellsGovernmentMistakeLeaderIndustryPoliticianOffersStealingApprovalRespectfulSeals
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“The new America, instead, is fast becoming a vast ghetto in which all of us, conservatives and progressives, are being bled dry by a relatively tiny oligarchy of extremely clever financial criminals and their castrato henchmen in government, whose job is to be good actors on TV and put on a good show.”

ShowsGovernmentJobsAmericaActorsTvsBecomingFinancialBe GoodCriminalsTinyCleverDryGhettoGood ActorsOligarchyHenchmen
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“To sum it all up, the [Ayn] Rand belief system looks like this: 1. Facts are facts: things can be absolutely right or absolutely wrong, as determined by reason. 2. According to my reasoning, I am absolutely right. 3. Charity is immoral. 4. Pay for your own fucking schools.”

PhilosophyCynicismObjectivismAyn Rand
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“[Obamacare] was almost the perfect example of politics in the Bubble Era, where the time horizon for anyone with real power is always close to zero, long-term thinking is an alien concept, and even the most massive and ambitious undertakings are motivated entirely by short-term rewards. A radical reshaping of the entire economy, for two election cycles’ worth of campaign cash – that was what this bill meant. It sounds absurdly reductive to say so, but there’s no other explanation that makes any sense.”

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“Say Bank A is holding $10 million in A-minus-rated IBM bonds. It goes to Bank B and makes a deal: we’ll pay you $50,000 a year for five years and in exchange, you agree to pay us $10 million if IBM defaults sometime in the next five years—which of course it won’t, since IBM never defaults. If Bank B agrees, Bank A can then go to the Basel regulators and say, “Hey, we’re insured if something goes wrong with our IBM holdings. So don’t count that as money we have at risk. Let us lend a higher percentage of our capital, now that we’re insured.” It’s a win-win. Bank B makes, basically, a free $250,000. Bank A, meanwhile, gets to lend out another few million more dollars, since its $10 million in IBM bonds is no longer counted as at-risk capital. That was the way it was supposed to work. But two developments helped turn the CDS from a semisensible way for banks to insure themselves against risk into an explosive tool for turbo leverage across the planet. One is that no regulations were created to make sure that at least one of the two parties in the CDS had some kind of stake in the underlying bond. The so-called naked default swap allowed Bank A to take out insurance with Bank B not only on its own IBM holdings, but on, say, the soon-to-be-worthless America Online stock Bank X has in its portfolio. This is sort of like allowing people to buy life insurance on total strangers with late-stage lung cancer—total insanity. The other factor was that there were no regulations that dictated that Bank B had to have any money at all before it offered to sell this CDS insurance.”

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