In Michael Lewis’s The Big Short, one of the few Wall Street analysts to bet against the US housing market explains his decision to short Merrill Lynch:
We have a simple thesis. There is going to be a calamity, and whenever there is a calamity, Merrill is there.
Sure enough, Merrill was there when the housing market crashed. Merrill was so there, in fact, that it ceased to exist as an independent company. The smart guys weren’t as smart as they thought they were.
I think of that anecdote every time it becomes clear that HM Treasury has been interfering in affairs that are, properly speaking, none of its business. Like trains, for instance.
You and the other average man on the 8.22 to Euston might think that the decision on who should operate the West Coast Mainline franchise ought to be a matter for the Department of Transport.
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