... skepticism about past returns is crucial. The truth is, much as you may wish you could know which funds will be hot, you can't - and neither can the legions of advisers and publications that claim they can. That's why building a portfolio around index funds isn't really settling for average. It's just refusing to believe in magic.

Bethany McLean

Categorized in : Past Believe Average

Home ownership was the fig leaf for the rise in subprime lending. But that was really about cash-out refinancings, not buying homes.

Bethany McLean

cash buying home

I think synergies are a lot like UFOs: Lots of people claim to have seen them, but few can actually prove they exist.

Bethany McLean

claims people thinking

So Merrill Lynch has launched its first campaign in years to advertise the accomplishments of its investment banking business. The ads feature things like Merrill's recapitalization of Sierra Pacific. I guess including "helping Enron achieve its earnings goals in 1999" might be a little awkward given that Merrill Lynch bankers are currently on trial in Houston for that "accomplishment."

Bethany McLean

accomplishment goal years

The last and most painful irony is that the two longtime rival armies in the securitization market - the investment banks and the GSEs - would end up magnifying each other's sins rather than keeping each other in check.

Bethany McLean

rivals army two

Building a portfolio around index funds isn’t really settling for the average. It’s just refusing to believe in magic.

Bethany McLean

magic average believe

No city embraced privatization more eagerly than Chicago, where I live.

Bethany McLean

privatization chicago cities

Capital isn't this pile of money sitting somewhere; it's an accounting construct.

Bethany McLean

somewhere accounting money sitting

Privatization of assets that most of us consider public goods - like airports and highways - has a long, often-uncontroversial history.

Bethany McLean

us like long history

The big banks advise cities about whether privatization is a wise choice. They also control the ability of states and cities to access the market for their financing needs.

Bethany McLean

control choice ability wise

When Warren Buffett invests in a company, he is conferring upon that company something very unique: his credibility.

Bethany McLean

something company credibility unique

In capital we trust. Capital is our savior, our holy grail, our fountain of youth, or at least health, for banks.

Bethany McLean

fountain youth trust health

Fixing Fannie Mae and Freddie Mac in isolation, without looking at the big picture, would be short-sighted.

Bethany McLean

picture looking big isolation

What's good for the financial industry probably isn't good for you.

Bethany McLean

good you industry financial

Proponents of privatization argued that cities and states needed private capital to fund all the upgrades that our decaying infrastructure so desperately needed.

Bethany McLean

our privatization infrastructure fund

Choices of right or wrong are not presented to you in black and white. If they were, I'm sure most people would choose white.

Bethany McLean

you black-and-white black people

The worst story I ever wrote was after the conviction of Jeff Skilling and Ken Lay. My co-author and I wrote a piece for 'Fortune' saying everything's going to be different now.

Bethany McLean

be-different saying story everything

I'm not a big believer in the power of more regulation to fix things. I think it can almost be more dangerous because it provides the illusion that things have been fixed without the substance.

Bethany McLean

think illusion dangerous power

Before Enron, I think people were a bit more naive about the way things worked, and I think Enron pulled the curtain back on unsavoury practices that turned out to be a lot more widespread.

Bethany McLean

back think people way

Google worries - and rightly so - about how hard it is for a big company to come up with the next hot thing.

Bethany McLean

google company hard hot