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Fascinating interview with Michael Lewis..

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topgun
Super Contributor
author of Liar's Poker on Bloomberg last night. Yesterday he released his new book "The Big Short - inside the doomsday machine" which details the unravelling of the sub-prime mortgage debacle and the CDO's that led to the meltdown on Wall Street. His book deals with 3 obscure characters who he describes as all suffering from Asperger's syndrome to some extent (people suffering from this can be said to lack both social and emotional reciprocity and are introverted) - and who picked up on the impending mess individually between the end of 2005 and 2007 while the financial world chose to ignore or failed to come to the same conclusions from the same data set - probably owing to their financial rewards being tied to the continuance of the Ponzi scheme inside the financial markets. Of the main street broking houses, only Jamie Dimon from JP Morgan made the call to completely rid their books of all exposures well in advance while Goldman Sachs did so just before the implosion. The latter managed to reverse their long positions into net short ones owing to their integrated systems while many of their competitors operated silos and only realised the extent of their exposures once the losses started cascading. Another observation is the relative slowness with which the catastrophe unfolded as it literally took several months into 2008 for the market to fathom the extent of the potential fallout notwithstanding the widespread availability of information on defaulting mortgages. Naturally, the 3 individuals never have to work again. Definitely getting a copy.
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