The Trillion Dollar Meltdown Easy Money High Rollers and the Great Credit Crash review ä 103

summary ✓ eBook or Kindle ePUB ✓ Charles R. Morris

summary ✓ eBook or Kindle ePUB ✓ Charles R. Morris Ite different But things are likely to get worse before they better Whether you are an active investor a homeowner or a contributor to your 401k plan The Trillion Dollar Meltdown will be indispensable to understanding the gross excess that has put the world economy on the brink and what the new landscape will look lik. I borrowed this book from my local libraryTo me Michael Lewis' The Big Short was excellent in its focus on the few individuals who saw the financial crisis of 2007 2008 coming Lewis took a micro approach and focused on those people and their actions He covered a lot of material in a short bookMorris does the same but goes in the opposite direction Starting in the late 1970's and stopping in 2007 he covers how the private and public organizations all played a role in creating the subprime mortgage market catastrophe A good bit of the material from one book crosses over to the other that is to be expected But Morris also goes into detail on how two financial incidents in the 1990's presaged the biggest crisis of the 21st century so far At only 177 pages excluding notes and the bibliography the book was a breeze to read As the 10th anniversary of the financial crisis is already in full swing it's disheartening to note the mindless anti regulatory spiel coming from Washington and New York None of the public policy directives Morris listed at the end of the book have been put into effect I think Morris knew that was going to happen Despite being a decade out from an incident that nearly destroyed the global financial system people in and out of power still have not learned anything from their mistakes The crimes that they commit will be left up to future authors to grimly record

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The Trillion Dollar Meltdown Easy Money High Rollers and the Great Credit Crash review ä 103 Þ We are living in the most reckless financial environment in recent history Arcane credit derivative bets are now well into the tens of trillions According to Charles R Morris the astronomical lev We are living in the most reckless financial environment in recent history Arcane credit derivative bets are now well into the tens of trillions According to Charles R Morris the astronomical leverage at investment banks and their hedge fund and private euity clients virtually guarantees massive disruption in global m. Looking back on my books from 2013 I realized I’d only read one book from the large pile of financial catastrophe related books I’d borrowed from Paul a while ago and figured I’d need to start making better progress than that if I’m going to return them this decade So I picked up a nice slim one Charles R Morris’ The Trillion Dollar Meltdown Easy Money High Rollers and the Great Credit Crash The Trillion Dollar Meltdown chronicles the major developments in the finance industry and in government economic policy from about the 1970s until 2008 when the book was written Towards the end he makes a series of educated guesses about how the next several years could turn out Five years later most of what he says still seems pretty sensible if a bit disheartening we really should have done by now There are two things I particularly appreciated about this book One is that it is very good at concisely explaining how various financial instruments and markets work which is extremely important for me in reading any book about banking or finance because I have no head for dealing with any of the mathy stuff and I sometimes forget things I learned from one finance book to the next The other thing I really appreciated is the discussion of politics and finance as being cyclical and the inevitability of having to continually adjust the way countries and markets are run ie there is no one lastingly perfect system From what I can tell the author comes off as being a moderate an actual moderate not a golden mean type of false euivalence moderate who is currently in the position of pushing left wing views as a direct result of thirty years of free market fundamentalism He gives a brief overview of Arthur Schlesinger’s hypothesis of twenty five to thirty five year shifts in political consensus and posits that we’re probably at the end of a conservative cycle In terms of public political opinion he seems to be spot on—economic populism looks to be making a comeback Whether the government will actually do much about it is obviously another uestionThe earlier part of the book is largely concerned with government monetary policy in recent history discussing inflation stagflation demographics the oil price shocks of the early seventies and Paul Volcker’s victory over inflation I really appreciate that the book despite being very short still touches on demographics; a lot of discussions of economics I’ve seen are surprisingly willing to completely leave out uestions of “how many people are competing for these resources anyway” even though economics is literally the study of allocation of resources among peopleFrom there it goes into the meatiest and most intellectually challenging part of the book walking us through a number of historically and economically significant market failures from the development of asset bubbles and the invention of new complex financial instruments through the profit seeking behaviors of various banks funds and investors and how they ended up collapsing The brief overviews of the 1994 residential mortgage crisis and the 1998 Long Term Capital Management crisis are extremely helpful in understanding foundations of the subprime mortgage crisis the catalyst for the 2008 crash We learn about the derivative financial instruments created out of mortgages and particularly the collateralized mortgage obligations CMOs that allowed large uantities of subprime mortgages to be turned into double and triple AAA rated securities and how this rather suddenly caused banks to not only lose all their prior reluctance to extend mortgages to people deemed to be credit risks but actively develop lending practices designed to get people to sign on for subprime mortgages some of these practices seem to be developed to ensure that the loans would never get paid back and yet the ratings of the derivative instruments based on these loans were determined according to the usual assumptions of the numbers of people who default on their mortgages but finance people get paid than us regular working Joes in other industries because they’re so smart After walking us through the beginnings of the crash Morris identifies other similarly shaky credit markets and why they are shaky shady accounting practices overly optimistic views of the real assets they are based on overleveraging leading to extreme sensitivity to minor market shifts there’s a whole load of unstable things going on in the world of high finance and gives some estimates for what could be affected and how badly in the coming years I haven’t gone and fact checked all of his predictions but I Googled a few of them while I was reading and he seems to have been broadly correct on the ones I was curious about—there was a big spate of bank write offs of consumer credit card debt for instance The fact that this book was rereleased a year or two later with some updates and under the title “The Two Trillion Dollar Meltdown” seems to indicate that he underestimated some things but I’d have to find a copy of the rerelease and look at the new information to see what it is He also points out a couple of areas where he says it is imperative we bring in some reasonable regulation and discusses the issues with the current systems Everything he mention has become a hot button issue in the past few years he talks about our expensive but embarrassingly inefficient healthcare system including our abject failure to apply technology to healthcare administration in anything resembling a sensible way the student loan debt load and the shady practices of loan servicers like Sallie Mae and the need to reinstate some kind of reasonable federal oversight of banking such as reinstating an updated version of the Glass Steagall Act I would definitely recommend this book to anyone who wants to learn some basics on the how and why of the financial crash and I would particularly recommend that you read this book rather slowly at least if you’re not a finance person At less than 200 pages it doesn’t go into too much minor detail on any subject but there’s still a lot of information packed into such a little book While the writing style is blessedly conversational—and occasionally even mildly funny—finance is a world of acronyms jargon and slippery concepts based on other slippery concepts and it’s easy to mix stuff up or forget what a structured investment vehicle is

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The Trillion Dollar Meltdown Easy Money High Rollers and the Great Credit CrashArkets The crash when it comes will have no firebreaks A uarter century of free market zealotry that extolled asset stripping abusive lending and hedge fund secrecy will come crashing down with it The Trillion Dollar Meltdown explains how we got here and what is about to happen After the crash our priorities will be u. You really cannot judge a book by its cover The first couple of chapters start out with a reasoned well toned analysis of the sub prime mortgage collapse and the history that led up to it The it takes a sharp turn left and becomes the soapbox for the authors agenda I could almost swallow it except for the sarcastic condescending and arrogant position from which the author gives his point of view Apparently he had no substance to back up his view because his only devise was to say the reader was stupid if you did not see the obvious truth of his viewpoint I am guessing this bitter childish author also had been personally offended by Alan Greenspan by the way he went after him in his book He did not explain where he disagreed with the Fed Chair's policies he just attacked and insulted him The last three chapters were so filled with inflammatory rhetoric and propaganda language it would have made Joseph Goebbels blush Tripe