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Something for Nothing
- Arbitrage and Ethics on Wall Street
- Narrated by: Lisa S. Ware
- Length: 6 hrs and 17 mins
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Summary
In 2001, Goldman Sachs structured a complex financial contract so that its client, the government of Greece, would appear to have far less debt than it actually did. When news of this transaction came out years later, the inevitable question arose: Even though Goldman's actions were legal, were they ethically wrong? Is modern finance itself inherently unethical?
In Something for Nothing, financial economist Maureen O'Hara explains that one of the key innovations of modern finance is its reliance on arbitrage, the practice of taking advantage of a price difference between two or more markets to generate profits and remove inefficiencies. When done correctly, arbitrage can create value at little or no cost (in effect, getting "something for nothing"); but it can also be an exploitative tool.
In a lucid, insightful discussion of the ethics of arbitrage in modern finance, O'Hara reveals how the rules can often be stretched into still-legal yet highly unethical business practices. Examining key cases in clear and persuasive prose, O'Hara illuminates various aspects of financial ethics, from the Goldman Greek transaction to Lehman Brothers' attempt to cover up its debt, JPMorgan Chase's maneuvers in California's energy markets, Bernie Madoff's trading strategies in the 1980s, high-frequency trading practices, and toxic loans in France.