archetypes in the financial meltdown

November 22, 2008

Apparently the roles of kids in a neighborhood have alway been a rich source of metaphors in the financial industry. And one of the few activities that haven’t melted away in the current environment. In Michael Lewis’ The End, upon which I commented in an earlier posting:

Goldman Sachs was the big kid who ran the games in this neighborhood. Merrill Lynch was the little fat kid assigned the least pleasant roles, just happy to be a part of things. The game, as Eisman saw it, was Crack the Whip. He assumed Merrill Lynch had taken its assigned place at the end of the chain.

Which reminded me of an earlier example (with illustrations!) from New York Magazine (Sept 21, 2008), The Naughty Child Index:

On his economics blog the Big Picture, Barry Ritholtz differentiated among three of the big financial-firm meltdowns, in layman’s terms:

Lehman Brothers is like the little kid pulling the tail of a dog. You know the kid is going to get hurt eventually, and so no one is surprised when the dog turns around and bites the kid. But the kid only hurts himself, so no one really cares that much.

Bear Stearns is the little pyro—the kid who was always playing with matches. He could harm not only himself, but burns his own house down, and indeed, he could have burned down the entire neighborhood. The Fed stepped in not to protect him but the rest of the block.

AIG is the kid who accidentally stumbles into a biotech- warfare lab … finds all these unlabeled vials, and heads out to the playground with a handful of them jammed into his pockets.
(Illustrations by Jack Unruh)

Recent Posts

About the Cynefin Company

The Cynefin Company (formerly known as Cognitive Edge) was founded in 2005 by Dave Snowden. We believe in praxis and focus on building methods, tools and capability that apply the wisdom from Complex Adaptive Systems theory and other scientific disciplines in social systems. We are the world leader in developing management approaches (in society, government and industry) that empower organisations to absorb uncertainty, detect weak signals to enable sense-making in complex systems, act on the rich data, create resilience and, ultimately, thrive in a complex world.

Cognitive Edge Ltd. & Cognitive Edge Pte. trading as The Cynefin Company and The Cynefin Centre.


< Prev

who will write this stuff ?

A bit more about Clay Shirkey. Observing blogs, wikipedia, and the rest of Web 2.0, ...

More posts

Next >

and who could stand unawed ?

On Thursday night I attended an fundraising art auction for my wife's employer, the Regina ...

More posts

linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram