Bethany McLean Quotations

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.

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

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

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

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

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.

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

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

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

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

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

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.

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.

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

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.

the powerful lesson from Enron for me is the power of self delusion and how people rationalise and deceive themselves. And I think when Ken Lay and Jeff Skilling say they are innocent now, as they do with their trial approaching in early 2006, they mean it on a certain level. One smart financial observer said to me that he's never met the CEO of a fraudulent company who didn't come to believe in what he'd created.

There is an advantage to size. It gets you noticed.

It doesn't really change anything. It's not like people will get their jobs back or their retirement savings back. But I do think the trial is important. It will set a precedent of what's acceptable corporate conduct. Is it OK for executives to do anything so long as it's technically legal?

... 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.

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

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.

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

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."

The story took on an importance later that it did not deserve originally. Whether I wrote that story or not, Enron would have gone bankrupt, investors would have lost billions of dollars and thousands of people would have lost their jobs. I just picked up on an underlying skepticism. If you had told me then that the company would go under by the end of the year, I would have never believed it. I was as naive as the rest of us.

It was actually in retrospect a pretty meek story. It didn't say that the company is a fraud and going to go bankrupt in nine months. In fact, if you had said to me at the time that Enron is going to go under, I'd have said, 'Are you kidding?' It just didn't quite make sense. In retrospect I fault myself for not questioning it more than I did.

Small cap companies complain constantly that they are neglected. They have a very tough time getting Wall Street research analysts to follow them, to pay attention to them. There are small companies that will say that I have grown my earning at 20 percent over the last five years and no one will pay attention to me.