Don't Cry for Me Wallstreet

Let's be clear. Lehman, Washington Mutual, Merrill Lynch, Freddie Mac and Fannie May aren't victims. Their reported demise is not due to a natural disaster, a currency collapse or a terrorist incursion. They all participated in a gamble - a little more complicated but ultimately the same as betting the house in Vegas - and lost.

You know the story of the sub-prime loans mess so I won't bore you and rehash it here. One thing these companies all have in common is that they all participated in the shark-like feeding frenzy of easy money and profits. They all knew the risks - that's why they have analysts and risk management departments - but they chose to ignore them. And now they're paying the price. So are the folks who are left without a home. And in some cases you and I are paying as in the bail-out of Freddie and Fannie.

What's more infuriating is that the leaders of the charge into the tar pits of the sub-prime mess, the CEO's and upper management, will walk away from this relatively unsullied. They'll do so with a fat paycheck in their pockets to ease the pain of retirement or at least keep them in pretzels until they get their next job. No box full of personal items and a security escort to the front door for them. No sir.

The lesson here is this. Bankers are no different to you and I. Despite the appearance of elite qualifications, proprietary investment modeling and analytics, they're driven by one person's decision to take a risk. How do we know that? Because all of those large departments filled with pen-pushers and financial whizzes did warn their masters that the end was neigh but they were ignored, across the industry.

We've all taken risks at some time in our lives. Perhaps we decided on a Pastrami sandwich for lunch or purchased an expensive watch and later regretted it. These guys did it with other people's money (OPM), without personal liability but with far reaching consequences for their industry and for us Joe and Jill Smuck the taxpayer. They get their golden parachute no matter what - it was negotiated when they were hired.

Never underestimate the power of the ego. Lehman CEO Dick Fuld screwed up big time by refusing to make deals with upwards of three suitors, finishing with Barclays over the weekend. "Dick Fuld really blew it," said William Smith, chief executive officer of Smith Asset Management in New York. "How many opportunities did he have to sell Lehman?"

Unlike in Japan where saving-face demands that a failed CEO unzip his tummy with rather sharp steak knife, here in the US we send them on their way with a curt hug and a suitcase full of lucre.

The tears you see in Wall Street today should not be confused with real sadness or grief. Those are crocodile tears shed for a loss of a lifestyle, of a good life, of getting caught along with others chasing a money-making scheme no different to a street-corner scam.

I'm pretty sure they didn't learn that in Wharton business school. Or did they?