The Part of Finance I Don't Trust
From an article in the latest issue of New York Magazine about David Einhorn. He, like a certain breed of financial whizzes, never fully trusted the complicated and shady financial products like CDO's, etc. related to our current financial crisis. This quote below is exactly why I never got why certain people were making an insane amount of money. And slightly related- it's also why I probably wouldn't go into the modern art world. Both areas are based on speculation and perceived value with an esoteric set of qualifications.
"In the larger Wall Street community, however, the view of Einhorn is somewhat less fawning, owing in part to the fact that he has established himself as a critic of contemporary investment-banking practices. “The investment banks outmaneuvered the watchdogs,” he said at Grant’s Spring Investment Conference in April. “With no one watching, the managements of the investment banks did exactly what they were incentivized to do: maximize employee compensation. Investment banks pay out 50 percent of revenues as compensation. So more leverage means more revenues which means more compensation.”