Lehman Brothers, Partner, Goldman Sachs discussed on The Joe Rogan Experience
It's a completely addictive mechanism. Really is people are lost in their phones and lost in their computers when they're checking their social media stuff, and that's one of the war, interesting things about these social media algorithms that it's been determined that when people are upset about things when they're angry about things, they post more, so it's more valuable, so the algorithms favor people being upset, so they'll send you if you if you find abortion, hot topic or environmental issues. They'll start sending you those. That's what's GonNa. Show up on your feet. You're GONNA get more. The is what you engaging. And it's fascinating. Is it's it's not even really. Malicious in that it's just pragmatic because I have a friend who did an experiment, my friend. Ari wanted to find out what would happen if he just looked up puppies. So he just looked up puppies on Youtube and looked up puppies everywhere in his feed overwhelmed by puppies, so it's not like this some vicious plot to only feed you things that you hate just human nature. We tend to look things that piss off. It was joey. And so now we have a very sophisticated machine to drive us in the direction of getting more pissed up, and that's a fisted machine is clearly using the same sort of deceptive deceptive tactics to try to diminish their responsibility for what they're doing. Yeah, exactly and you know when one of the things that makes these tactics I think work so well is that they really are based. In human nature I think that if you are an executive. you know your your instinct is that you are doing fine, and your instinct is that the other side is wrong in that, and that psychological reflex than you know, become a foundation for a corporate strategy, and then that corporate strategy becomes the basis of kind of its own new industry of of Public Relations, folks and advertising people in lawyers, and and think tanks who will promote that, and then that becomes an ideology. That's certainly what we saw the progression for climate, change and I, and I think or climate denial. and that's a dangerous trend. Do you co- you do covers social media, and in this I don't really get into it. I mean I talk a little bit about Yeah, no, it's really not a factor. I mean the more the most recent industry that I talk about the two most recent industries are the fossil fuels denying climate change, and also Wall Street denying the the The. Products and activities and and hazards that led up to the financial crisis of two thousand eight. That's A. Can of worms in and of itself right? You Read Mattei. Read some of his work. Yeah, he's vampire squid. Clamp to the face of humanity. Yeah, that's immortal lines, so his description of Goldman Sachs his work is fascinating and terrifying on. You and he's not a guy with a financial background, so he had to do a deep dive into the all that stuff for years. It's sort of get a grip on how they do things what they're doing. And the the idea that that is the backbone of our civilization can terms. Our economic civilization is. CRAZY WHAT A goofy system! Yeah, and and of course that industry has become. so much bigger as a percentage of GDP and so much more powerful without any evidence, social benefits as far as I can see and. I'm also not a person with a financial background came to this. You know as an environmental lawyer, and not as a particularly naive person, but I have to say I was really astonished at at the depth of the exploitation. I mean just the attitude. It wasn't even like where we think we're trying to do the right thing for our clients or are. We think we're trying to do the? The right thing for you know society it was. It was just this full-on. Take the money and run and and exploitation. I mean there's they have this cute little code on Wall Street that was prominent before the crisis I hope it's not so prominent now it's I. B G Y B G which stands for I'll be gone. You'll be gone. which was the answer when somebody said? Wait a minute were pumping all this risk into the system. This investment products going to fail. This is all gonna hit the fan. This is all going to collapse. I B G Y BG and ends bonuses for selling these crazy risky products We're all frontloaded, so you sell somebody a year product and you get the bonus. Right up front, so you don't care with the long term. Risk is and the attitude toward their clients. In there, there's A. An author in Britain. Who Interviewed? All kinds of people in promise them anonymity from the British. The British financial industry, but it overlaps very much with the US one and the the culture was hey, rip your Clinton's face off. You know you eat lunch or you? be lunch, and I mean a lot of really really vicious stuff going on and. Risks, that? Y- were were so obvious that you can't believe that. They were denying them I mean obviously. When there's a housing bubble, it will burst and there was an obvious housing bubble. It was denied for long long time, and that ultimately became the basis of all of this really toxic debt got magically transformed into AAA investments, and it wasn't I think that the industry was denying that it was going to burst. They just felt they were going to get in and out before it bursts that they get past the risk off to the next party before it happened so I don't know. Do we call that? rationalization is that I mean it's I put it all under the very broad category of denial but It actually the head of J. P.. Morgan later would testify to the financial crisis inquiry. Commission somehow you know. We just missed the fact that housing prices don't go up forever. I don't think they really did miss. That really said that were that what? Said, yeah I. I may have order to off but That's actually what he said I suspect. He regretted. Phrasing it that way because. That's pretty astonishing. How many IB G. Y. BG tattoos are out there. It's a good question. Is probably a lot right disturbing? There's probably a lot. You know. There's one actually one anecdote. In the book that I retold from a book that Mike Hudson wrote called the monster, and he's talking about first of all they we had this new breed of mortgage lenders, the folks who actually went out to sell the subprime subprime mortgages to the low income people who were often defrauded and certainly not the most sophisticated financial consumers, and this one particularly bad company. was without their. Lehman Brothers sent a vice president to visit with this company because he wanted to know how they were doing this was I think in in the Ninety S, and he writes back and says. That this is a sweatshop. It is high pressure sales for people in a weak state, and it is a check your ethics at the door kind of business. And Lehman Brothers writes back, and says we enthusiastically welcomed the opportunity to partner in your future growth, and ended up in fact, partnering with them and financing these these mortgages, and then buying them packaging them up selling them to investors, and then of course, eventually becoming the biggest bankruptcy in history. And getting bailed out well, not Lehman. Brothers three other ones didn't right. That's what it crazy. Just sorta laid it out like that. Well. Yeah, this is a internal stuff that that came out, but yeah the the fact that they they were. So happy to to partner with an unethical business, and in fact there's also a lot of evidence. That Wall Street was just continuing to get the mortgage lenders to reduce their standards even lower because you know you start out with these very very aggressive new companies. These weren't banks were lending companies, and they were new, and they wanted to get huge very quick, and they were super aggressive, but they made so much money that the more traditional banks started following and doing what they had been doing, and so all street gets involved in, and basically they're saying. You don't need tation of income and you know the the banker would say the lender would say well. How do I know they're going to pay it back and Wall Street would say you don't need to worry about that and in fact, they didn't because Wall Street would buy it The the point wasn't will ever be paid back. The point was is the is the interest rate on the surface of the mortgage high enough that we can package it into what looks like a lucrative investment and of course package, lots and lots of these together and then slice dyson and stack them and. Keep rearranging them and and essentially then. Threatened and corrupted the and manipulated the ratings agencies so that they would give them aaa ratings so that your pension fund could buy it..