I just finished Gasperino's book, "Blood on the Street", and it convinced me that most of the big brokerage houses should not be in business. Certainly anybody who expects an honest opinion from an analyst working for somebody like Merrill Lynch is likely to be disappointed.Their role in the Enron thing ("The Smartest Guys in the Room") was absolutely contemptable. But they were not alone.When I hear of problems at hedge funds, I remember Mandelbrot's book, "The Misbehavior of the Markets." They were discussing LTCM on CNBC yesterday. Seems that they were leveraged 100 to 1. So how much money did they actually make? Well, I have heard 40% per year in the beginning. But if you are leveraged 100 to 1, to make 40% you only have to have real profits of .04% approximately. So if you lose .04% you lose 40%. Did I do the math right? Crazy stuff.So what are the odds that there would be a tender offer for GM and a downgrade of their bonds to junk the next day? But it happened.Every time I go to Amazon to buy a book they tell me I should buy Reminiscences of a Stock Operator, so maybe I will do it.Joel Williams
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