[junkbond]

The article does have some valid points.

Consider this analogy. Wall Street, up until about the end of the last decade, was run by guys like GW Bush. He is personable, a jock, and popular but maybe lacking the soaring “intellect” of the nerds. Most importantly, since he is already well liked (and wealthy) he does not need to demonstrate to others, for his own ego, how successful or smart he is. GW (or an old school Wall Street executive)was comfortable being competent and did not need constant adoration from his peers to stroke his ego.

Beginning in the 90s though, Wall Street began to bring in more Obama types. Sure they might be smart, but they are socially maladjusted. They resented and resent the jocks popularity and pleasing personality. As a result, they put constant pressure on themselves to best the jocks by displaying their intellectual superiority. This display often is manifested in the implementation of academic theories when pursuing profits rather than Wall Street common sense. The theories are arcane, barely-tested under real world conditions, thus subjecting the firm to out-sized risks.

[Jackie]

.

intellectual superiority...

Consists of fraud, corruption and manipulation.

And as I have warned, the gold bubble has not yet burst.

.

[Defiant]

I agree, there is a kernel of truth to this article. The guys from my east coast prestigious school who went to Wall Street were not the smart guys. The smart guys went to law school, med school, or after Business School, went to IBM and other huge corporations. The jocks and salesman types went to Wall Street, where they prospered selling stocks and bonds to individual investors. Being good at sales they got to middle management, by the mid to late 90s, I was hearing stories about how much money these guys were making. I was kicking myself for not going to Wall Street. Around that time, the smart guys from B-school did start going to Wall Street. No one wanted to work at IBM anymore, they wanted to do spin-offs from IBM, or IPOs for companies that would take business from Dinosaur companies like IBM.

The flaw in the theory is that the people at the top on Wall Street were always brilliant. You don't get to be in senior management at the big Wall Street firms while failing to understand what derivatives are. They may have had a lot of middle management that were not very smart, but those in control should have known better. The problem was incorrect risk management assumptions and an addiction to excessive leverage in order to maximize profits and get those big bonuses. That's what did it, and the people who watched it happen were smart enough to know better.