Daniel Lubetzky

Michael Lewis (from "Liar’s Poker") wrote a piece in Portfolio Magazine that is a must reading (this earlier piece is also very good).  It is at once nauseating, chilling, and fascinating to see how our financial system is a house of cards.

A couple years ago I got into a passionate debate with friends from the financial sector about the growing disintermediation between actual products we make in the "real" economy and the derivative products that get packaged and re-packaged and sold – always generating a fee for the financial firms that hawk them – without really creating value.

Michael Lewis explains better than anyone how this came about in the 80′s and how it came about with the current credit crisis.

The saddest thing is that, while there will be some short fixes and a lot of chest-thumping in Congress, by the media, and in the executive corridors, the system is so sick and so rigged by those that benefit from it, that it is unlikely to be structurally fixed.

As Lewis concludes in his piece, it would require that Wall Street firms go back to operating as private partnerships with skin on the game rather than become publicly traded firms where management can pass on long-term risks to shareholders, benefiting from short-term profits even if they are risking the fate of their institutions.  Or it would require enough regulation that really tracks and connects compensation to long-term value creation.

Yet greed and ingenuity are potent combinations.  And the "smart" guys will always find a way to game the system – with your money.

Even as we witness calamitous losses on the market, many insiders are doing quite well for themselves.  They find the way.  They are survivors.  Several of my friends are in this industry.  They are not bad people.  They are just playing by the rules of the system, which banks on our own greed as investors to sustain and legitimate itself.

It is hard not to be tempted to participate in the market once it has been so depressed that it should have nowhere to go but up.  And yet Lewis points out that someone who would have invested in the 80s in the predecessor to Citigroup would have lost more than half the value of the investment – rather accrue growth over a 22 year period!

Buyer beware.

And for the young people out there thinking what to do with their careers – many of whom Lewis laments having misread his book as an alluring tale for an exciting career – find something you can truly CREATE.  There are sooo many opportunities to make this a better world through concrete businesses that truly improve life and society.  There are so many opportunities to make money and do something truly good. To build something that adds value.  Find one that is real.

[Read more →]

Several friends called or emailed to let me know Danny DeVito was hilarious at the Israel Film Festival, where he also encouraged the audience to get involved with OneVoice.  This article will give you an idea…

“Look around. A lot of you are bald,” said the actor, who was introduced by Michael Douglas — DeVito’s oldest show business friend and former roommate in a one-bedroom Manhattan apartment — with a crack about absent hair. DeVito went on to make an earnest plea for support of the grass-roots organization in which he and his wife, actress Rhea Perlman, are involved: the OneVoice Movement, which pushes for peace in the Middle East.

[Read more →]

Ben Stein’s article in the New York Times Wall Street, Run Amok highlights one of the core reasons why our financial system is not working: investment bankers are incentivized to leverage themselves to the sky; the more debt they take, the more their upside from structured deals and the more compensation they get, with the downside severely mollified by the public serving as the unwitting insurer.

[Read more →]

Ovation Cable TV had a special today on Chuck Close, an American artist/painter whose work is extraordinary.  Take a look on google images and in this website.  No less extraordinary is his background and the challenges he overcame along his life, never letting setbacks keep him down, always surmounting tragedies to come out stronger.  This article does a good job describing his life. He is not just an artist on canvas, but a man who exemplifies the triumphs of the human spirit. His work reflects his efforts to push himself to discover new techniques that keep pushing the envelope. 

[Read more →]

Living in NYC you cannot help wonder if you are "keeping up" with the neighbors.  Are you making enough?  I am all for capitalism (to paraphrase, "as the worst system except for all others), but it is definitely unhealthy that we tend to compare ourselves to others and evaluate our "happiness" based on our financial accomplishments.

Now there is a way to keep things in perspective.

Click on this link to get an idea of HOW RICH (and fortunate) YOU ARE!

http://www.globalrichlist.com/

Earlier this week I rode on my first hybrid taxi in NYC and was ecstatic for a few reasons.

• First because this environmental victory for all of us is the work of my friend Jack Hidary, who for years lobbied the NY State and City governments to reverse policies that actually prevented hybrids in the taxi fleets! (go figure!)
• Even once hybrids were approved by the law, there were so many misconceptions and conspiracy theories preventing the taxi drivers from purchasing one, so Jack pulled off a creative guerrilla marketing coup: he hired a bunch of young people to go educate the taxi drivers on the financial benefits of hybrids to them; since time is money and drivers didn’t have time to just sit and chat, Jack handed out wads of $5 bills to his staffers, who’d take short rides on the taxis and strike conversations about the Hybrids…low and behold, it started working

• Now the best part is that drivers are going wild now that they realize the benefits of driving a hybrid over a regular gas guzzler.  On my 10 minute ride one night in NYC, my driver got stopped TWICE by other taxi drivers, who asked him whether the shift to hybrid was worth it.  This was what the conversation was like:

Guzzler: "Hey, are you happy with the hybrid? What do you think? I am thinking about it but need to ask some questions.

Hybrid Driver: "There is nothing to ask"

Guzzler: "Is it worth it?"

H: "There is nothing to ask, I pay $8-10 in gas a shift.  You are paying $40 per shift."

G: "Can I lease your taxi for a shift to check it out?"

H: "There is nothing to check.  There is nothing to wait.  You can buy one of these with the gas you will save in the first year."

It’s funny how you tell yourself you will avoid some of the rites of passage that people go through from living in NYC, thinking you of all people will be impervious to them, and then, before you know it, you realize you have succumbed…

When you first move to NYC, one of the first things you notice is that people walking on the streets don’t look at or greet each other, let alone smile. 

You think to yourself, I will look at people’s eyes, I will say hello, I will make them all smile, I will single-handedly transform NYC into the friendliest of cities. 

And you experiment for the first year or two, even if people think you are crazy – or can tell you are just new.

Then somewhere along the way, it just happens, gradually, till you stop staring into the walker-by’s eyes with a smile.  It’s not that you are rude or mean.  You just go about your business.

You get to NYC thinking you will always have time for everyone, you will always be polite and open doors and be relaxed.  But 15 years later, you are always in a rush, and you sometimes catch yourself in your own bubble.

Then there is NY REAL ESTATE.  Reading the Real Estate Section in the NY Times is a sport in NYC, and everyone talks about it.  Yet you think you will avoid it altogether and won’t be bothered with such obsessions. 

Alas, one day you find yourself reading the Real Estate section, following the market, wondering when it will adjust, becoming an "expert" in square footage, valuations, and all sorts of trends and considerations.  Eventually you are drawn like a magnet to any new piece of input on the real estate.

And then there is the Wall Street Journal, though more than a NY thing, this is more a rite of passage from youth I guess (and regret).  When I was in college, and even during law school, reading the Wall Street Journal was such a bore, while the NYT was so fascinating.  WSJ was numbers.  NYT was people.  WSJ was dry.  NYT was passion. 

I don’t know if it’s that the NYT has gone so down editorially and the WSJ has improved so much, or that as you get older your way of thinking changes, or that the WSJ is more sophisticated or complex, but something about the NYT increasingly bores me, and I find the WSJ far more stimulating…