An Inside Look into Wall Street Culture – In the Midst of Morgan Stanley’s Near-Collapse

So I’m enjoying the heck out of this Vanity Fair article from the November issue.  It really manages to highlight the chaos of the time, the impotence of the leading government authorities (able to only make uncompelling and rather simplistic recommendations… Think of a basketball fan e-mailing Bryan Colangelo ESPN Trade Machine links to get Andrew Bogut on the Raptors…  Not that I’ve been trying to or anything), some of the rather obvious personal concerns of the parties concerned (think Paulson’s relationship with Goldman Sachs), and the degree that the big investment banks were at the whim of momentum.  And the investment bank’s exposure to an unconventional bank run of hedge fund withdrawals.

Fascinating stuff with the usual classy photos that make Tim Geithner look like an angry loaner with a blog, and Henry Paulson look like the goddamn devil himself.

All the names and characters are presented in a manner (whether accurately or not, I have no idea) that leaves them practically interchangeable… save one: Citi’s CEO Vikram Pandit.  Please read the whole article if you have an interest, but here is one caption that captures Pandit’s oddly logical thinking, lacking in some of the bravado and personality-infusion that characterizes much of the utterances of the other major players [all emphasis mine]:

““I haven’t been able to reach you for four hours,” Geithner barked into the phone. “That’s unacceptable on a day like today!”

Apologizing, Pandit explained that he had been talking to his team about the Goldman proposal, which they had ultimately rejected. “We’re concerned about taking on Goldman,” Pandit said, trying to explain his rationale for turning them down. “I don’t need another trillion dollars on my balance sheet.”

Geithner could only laugh to himself—Pandit should have been so lucky as to own Goldman. “This is a bank,” Pandit said. “And a bank takes deposits and a bank has a prudency culture. I cannot envision a bank taking its deposits and investing them all in hedge funds. I know that’s not what Goldman is, but the perception is that they’d be taking deposits and putting them to work against a proprietary trade. That can’t be right philosophically!””

I think his bank is a monumental failure, but this Pandit guy I feel I can understand.  Lord knows how he managed to get where he is with that kind of thinking though.

[I should add the article is actually an excerpt from Andrew Ross Sorkin's book, Too Big to Fail.  Interesting stuff in a diary-of-a-mad-man sorta way.]

… and the cow goes moo