From Liar’s Poker by Michael Lewis, pg 302-303
One of the managing directors from London, who happened to be in New York, actually took me aside to practise an argument he planned to put to the Bank of England. He had calculated the sum of the losses of the banks underwriting BP to be 700 million dollars. He said that the world financial system might not withstand this drain of capital from the system. Another panic could ensue. Right? Amazing. He was so desperate to avoid the loss that I think he actually believed his lie. Sure, why not? I said; it’s worth a try. Basically, it was an old ploy. My boss wanted to threaten the British Government with another stock market crash if they didn’t take back their oil company. * (Note to members of all governments: be wary of Wall Streeters threatening crashes. They are tempted to do this whenever you encroach on their turf. But they can’t cause a crash any more than they can prevent one.)
Mark Carrigan 