The responsibility for the financial crisis falls on investment bankers, described as 'lobotomised sharks', who poured money into sub-prime mortgages and over-priced private equity deals in the run up to the start of the crisis last year.
Who are these guys? In his book ‘Valley Boy’, Tom Perkins, co-founder of Silicon Valley’s pre-eminent venture capital firm Kleiner, Perkins, Caufield and Byers, writes: “The term ‘investment banker; is marvelously misleading. The term ‘fee-charging middlemen’ is clearly less attractive, but it’s much closer to an accurate description of their actual function.”
Investment bankers, points out Perkins, are only there to take a fee on money provided to support a buy-out or takeover, and they have no further role once the deal is done. They don't take a risk.
This is why investment bankers seek out deals, push and promote deals and cheer on deals. They want any deal, at any price, because that’s how they earn a fee.
As they all chase deals, a feeding frenzy develops.
Perkins recounts: “As my partner Frank Caufield says: ‘They have all the self-restraint of lobotomized sharks.’”
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