You may recall that when I got on my high horse about this Friday I insisted you watch a CNBC video that was vastly more of a watershed than the whole Cramer-Stewart thing, or should have been. Perhaps lost in the jawdropping meltdown of the CNBC hosts was the agreement of Roubini and Taleb that compensation based on disastrous short-term risks are at the heart of the crisis.

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It’s impossible to say for sure. But after the epic and then-singular failure of the hedge fund Long Term Capital Management, the people who destroyed the company and who had to go hat in hand to Wall Street under the direction of the Fed almost immediately found more rich people to throw money at their subsequent venture. In fact, LCTM chief John Meriwether not only started his own hedge fund, he brought on Larry Hilibrand and Victor Hagani, who, as Roger Lowenstein details in When Genius Failed, were the two LCTM employees who probably bore the most responsibility for the firm’s collapse.

To wit. Here, frighteningly, is Andrew Sullivan, being, as usual, frightening:

  1. Cf.