maybe this should be titled better late than never. i should have read this book when it first came out but being somewhat of a tightwad i waited to borrow a copy from the public library. i found it to be an excellent read, not too difficult to understand and not too simplistic as to skim over some of the tricky stuff.
the two things that jump out at you are the incompetence and corruption in the financial system. and of course it all comes down to profit. whilst the investment houses were basking in the glory of the huge profits to be made by handing out sub prime loans like halloween candy and then repackaging them as bundles of investment grade bonds it seems those in charge were blinded by the profit. AIG was run by an arrogant fool that didn't give a shit about the details and those that were smart enough to read all the details made a fortune by investing in CREDIT DEFAULT SWAPS. interestingly, a new breed of credit default swaps had to be created to make all this happen.
the big question is what were the regulatory agencies doing while all this was going on? does it take a genius to figure out that self regulation doesn't work? the totally disgusting thing is these large financial institutions have been allowed to carry on with business as usual with no new regulations. the answer to all this is really simple.
big business is the government! democracy is an illusion. profit is the straw than stirs the drink. with all the pension funds invested in the capital markets the beast must be fed! we all felt the pain when the beast missed a few meals and many of us are continuing to feel the pain.
i love you sons of bitches.
19 comments:
I agree that we need better financial regulation, and indeed we need to re-examine things at a basic level.
But, big-picture-wise, the regulators can only enforce laws on the books, and big money will corrupt politics as long as we the people continue to slumber.
It's not like we can rely on a sense of shame or patriotism to keep the banksters under control.
I'm all for digging up Andy Jackson's corpse, hit him with a tazer, give him four shots of bourbon, and turn him loose on Wall Street. He definitely knew how to do it.
i think the problem is you can't regulate what you don't understand. a year after all this happened they still couldn't decipher AIG's books.
But those sub-prime loans weren't really profitable, though, were they? The borrowers defaulted, which is why the banks that lent the money got into trouble. The banks are to blame, but so are the people who borrowed more than they could repay.
gb - the loans were very profitable for lots of people. through hocus pocus the wizards of wall street were able to have triple b mortgages morphed into triple a bonds. it wasn't so much the defaulting loans that sank the investment banks but their selling credit default swaps that blew up in their face.
face it..we're fucked..the Chinese win
yellowdog - the chinese might be doing fine now but they have some pretty dark clouds on the horizon. their ratio of workers to retirees will soon plummet.
I don't think I could read this book. Much too depressing. :(
Greed is a deep rooted and noxious weed. It chokes all in its path, and it's awfully hard to regulate.
big business is the government! democracy is an illusion.
Yup, and is history repeats itself the rich and greedy will start being killed, and I'll approve.
I haven't heard of the book but maybe I don't need to read it, maybe the young do, it's their job to fix this mess.
jayne - it seems the seven deadly sins get no respect these days.
billy - yup, history will repeat itself but infinitely more poor people will pay the price than the rich.
Sounds like a book I need to check out. I admit that I do not understand a great deal about what goes on, who's responsible or even what it means in the long run. Its time to find out.
Hey... love the turtles!
When people ask what were the regulatory agencies doing while Wall Street was raping the refrigerator, I have to remind them that business interests took the cops off the beat with their "less government" mantra. Surely they didn't think the security guards hired by AIG and the others would "police" their own company, did they?
This is why corporate interests are intent on dismantling government because that is their only barrier to untold profits.
ananda - there's just something peaceful about turtles. serenity now!
robert - globalization isn't hurting the investment bankers either.
how can anyone have any faith in moodys or standard and poors after this little fiasco?
They worked it in such a way that they make way more money on a defaulted loan.
Is that right?
(I don't claim to know this stuff, just trying to understand it.)
There is nothing to loan and nothing to borrow!
It's been that way since we were sold the fiat currency bullshit story many moons ago. You can buy the left-wing jingoism if you want, but you're just as owned as the so-called "right" is by the same bankers.
China is becoming a superpower as it abandons spiritualism and communism. We are dying as we ignorantly embrace it...there's a lesson in that if we want to learn!
ted - agreed. while the left an right preen and posture, the system has run amok. free trade is a boon to the corporations that can now shift production where ever they like without worrying about access to the home market.
china and india have been net buyers of gold while most western countries have been net sellers of gold.
whomever has the most gold wins.
It's impossible to have a growth economy go on indefinitely.
One thing I learned about regulation is that some of the folks that regulate are lawyers and just have a checklist to follow so if the company looks good on paper then they sign off on them. Now if these regulators understood more about the business they are suppose to be regulating then maybe some of the crap that we just lived through would not happen.
secret - yes, but our whole economic system is based on growth.
mr shife - we need walter sobchak to enforce the rules.
am I the only one around here who gives a shit about the rules?
There was a rush of books out about the same time as The Big Short, and I bought three of them. I slogged through The End of Wall Street (how'd that work out?) and despaired of ever daring to pick up either of the other two. When I forced myself to open this one, I was gratified by the readability.
I'd already gotten the message that there were crooks and robbers out there who'd been diddling with my retirement portfolio, but I read Michael Lewis for the pleasure of it. And learned one or two new things to piss me off.
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