Heidi and I saw the film The Big Short last night. And while we both thought it was an excellent film that cleverly presents a lot of complicated financial information in an entertaining way, as we walked out of the theatre it was obvious we both felt a substantial pang of nausea. It took Heidi over five minutes after walking out of the theatre to comment, and once she did it was only two words: “Pretty disgusting.” And as I walked out, my thoughts were how the film took me back to many moments that frankly don’t seem that long ago to me. For example, I recall in the midst of the financial debacle learning myself what words such as “tranche” and “CDO” and “credit default swap” and “dark market” meant. I recall recognizing how complicated the mess was and how uneducated I felt I was, especially as one who works in one level of that chain of events we call lending.
Watching the film I felt a resurrection of that anger surging inside me that in those days was just a regular part of my day, every day. I recall distinctly the 2008 Obama campaign’s nearly spiritual hymn of hope and change contrasted with the daily collapse of lenders, the plummeting stock market, and the growing fears of those who seemed most informed in both print and television media. I remember wondering why Obama would want to take on this mess at this moment in history.
But as we drove home from the theatre there was a moment or two when I thought of what has happened since then. Indeed, the Dodd-Frank Act actually did make it through congress and became the most significant update to the government’s regulations over (let’s just call it) Wall Street since the 1930s. It’s of course notable that the senator and the congressman whose names are affixed to that act both retired from public service after completing the passage of this legislation; two democrats whom many see as patriots, whom some see as villains, and whom I see as sacrificial lambs. And while the financial industry fought tooth and nail to prevent, curb, and influence Dodd-Frank (over $100 million alone in 2011, see NY Times 2011) some real changes, including a Consumer Financial Protection Bureau, actually became law— though the efforts to repeal and “defang” the law have been ongoing ever since (see Rolling Stone in 2012, The Nation 2013). And according to this article in Think Progress in 2015, “Financial players have spent three-and-a-quarter billion dollars to influence the government since Dodd-Frank was passed.” which by itself informs us beyond any reasonable doubt what sort of challenge the public faces when going toe-to-toe with Wall Street. So unlike football and basketball, there is no game clock in this contest. The public really can’t claim a victory as the time runs out because the proverbial “overtime” is endless when billions of dollars are spent creating the extension to the game. Any of the gains implemented by the public can be reversed by lawmakers willing to act on behalf of big donors. So to think that the biggest reform of financial regulations since the 1930s is anything resembling a done deal is a fallacy, and its opponents absolutely count on the probability of the public’s waning attention to it. If you take anything away from this post, I would humbly ask that you please don’t let your lack of attention be an asset for Wall Street. They have enough assets as it is.
And lastly, the thoughts that followed after coming home from the theatre seemed to all conform to one question: How did Heidi and I survive in this business in such a disastrous climate? A quote from one of the characters in the film (Mark Baum played by Steve Carell) sums it up very well, I think: “We live in an era of fraud in America. Not just in banking, but in government, education, religion, food. Even baseball… For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? I thought we were better than this, I really did.”
We survived in this business in no small part because we did do NOT engage in the rampant, epic, f-ing fraud that Wall Street committed upon this nation. And while we both walked out of that theatre last night feeling no less than infuriated, I can assure you it continues to be our promise to all of our clients that our fiduciary duty to serve the interests of our clients is sacrosanct with us. And it always will be.
Please go see The Big Short. It offers the public a very entertaining AND an extraordinarily valuable insight into the biggest and most powerful player in the world: Wall Street.