Yesterday I read a very well written Fortune magazine article titled “what’s wrong with Wall Street and how to Fix It”. I’m sure by now you’ve read countless press releases on the sub prime debacle which don’t always provide a concise view of the situation we now found ourselves in. Rarely do you find articulation of such a complex topic, in written format, that provides just the right blend of depth to go with simplicity, to ensure it resonates with a broad audience. I believe this article fits that mold and wanted to summarize some of its key points and chime in with some personal commentary of my own.
The author, Shawn Tully, encapsulates Wall Street’s issues into three distinct categories. The first is their unyielding appetite for risky trading as opposed to more traditional and reliable fee based business that commercial banks tend to gravitate towards. The second is the dangerous levels of leverage these firms work with. continue reading »