The further away we get from September 2008’s financial crisis, the better the stories about it become.
The title for a Bloomberg piece this week by Bob Ivry and Jody Shenn, “How Lou Lucido Let AIG Lose $35 Billion With Goldman Sachs CDOs,” is a little bit misleading. Because the story isn’t only about Mr. Lucido, a 61-year-old bond buyer who likes the guitar, Rolling Stones, and, up until recently, “buying bundles of subprime loans for an investment pool that AIG was bound by contract to insure against failure.” It’s why AIG–and, by extension, the American economy–was driven to the cusp of ruin thanks to a system that incentivized Wall Street to dabble in more and more risk.
The story can get a little complicated, but luckily it’s also about a collection of 12 sexual devices, 34 hardcore porno magazines, 17 sexually explicit DVDs, 19 hardcore videocassettes, plus a “former teen Mr. Connecticut bodybuilder who ran the top-ranked mortgage-bond underwriter in the early 1990s,” hubristic financiers who deny their own hubris, shuffling the deck to hide the bad ace, jumping off a 100-story building and saying everything’s fine when you’re passing floor no. 99, and, of course, Goldman Sachs (and its famous Abacus collateralized debt obligations).