The big short book report. The Big Short 2022-10-02
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The Big Short is a non-fiction book by Michael Lewis, published in 2010. The book tells the story of the events leading up to the 2008 financial crisis, and the individuals who were able to predict and profit from the collapse of the housing market.
At the heart of the book is the concept of the "big short," which refers to a financial bet that something will go wrong in the market. In this case, the big short was made by a group of unconventional investors who saw that the housing market was built on a foundation of subprime mortgages, which were given to borrowers with poor credit. These investors believed that the housing market was going to collapse, and they placed bets against it by purchasing credit default swaps (CDS).
The book follows several key players in the big short, including hedge fund manager Michael Burry and investor Steve Eisman. Burry was one of the first to recognize the potential for a housing market crash, and he began purchasing CDS on mortgage-backed securities in 2005. Eisman, on the other hand, was initially skeptical of the housing market, but eventually came around to the idea that a crash was imminent.
As the housing market continued to boom, these investors faced a great deal of skepticism and ridicule from their peers. However, they were eventually proven right as the housing market did indeed collapse in 2007, leading to the financial crisis of 2008. The big short investors made billions of dollars as a result of their bets against the housing market.
The book is a fascinating and informative look at the events leading up to the financial crisis, and it serves as a cautionary tale about the dangers of financial speculation and the importance of critical thinking. It is a must-read for anyone interested in economics and finance.
The Big Short Chapter 1 Summary & Analysis
In a system in which virtually everyone had an incentive to do the wrong thing, almost everyone did: and almost everyone, from mortgage lenders to the Fed, failed to understand that disaster was imminent. If I was wrong, that would be the end of the career of Steve Eisman. . And why was anyone lending them money? And why was anyone lending them mon Remember that point, in recent years, when we all started to notice something strange? Burry is an investor who saw the bubble in the sub-prime mortgage market, and began to bet against the success of the market. Eisman emerges as a leading skeptic on Wall Street.
I question their necessity. Ultimately, Vinny takes six months to sort through all the data about subprime mortgage loans. He went on to write The Big Short in 2011 to focus on the financial crisis of 2007-2008, which he believes has roots in the 1980s. Steve Eisman was one; the other was Sy Jacobs. Lewis may single-handedly revive stuffing cash in mattresses as a savings option. It was as if he feared that he might not be able to express whatever thought had just flitted through his mind quickly enough before the next one came, and so kept the channel perpetually clear.
Summary and reviews of The Big Short by Michael Lewis
They landed on their feet. Or maybe those guys who made Airplane! Oh yeah, that group of dads from that balmy October afternoon, some lost their homes, others just faded away. . This is a book about many things, but it is particularly a story of incentives, and the calamitous effects of incentivizing irresponsible behavior. The family bolstered security around the property by hiring private armed guards and installing cameras. Eisman, Lippmann, Burry, and Cornwall Capital all made a huge profit off of the crash. He tells the same story from three different points of view, even t It was a good book, but it disappointed.
The Big Short: Inside the Doomsday Machine by Michael Lewis
And it leads you to look at the earlier episodes differently. This proposed case study is on the Global supply chain management of a famous Spanish clothing retailer known as 'ZARA'. Eisman has an epiphany: he realizes that instead of focusing on stock picks, he needs to do something with bonds. While short selling in the stock market may bring equilibrium in day-to-day stock movements, imprudent use of this concept in the long-term debt and bond market perhaps added a deep problem to the system. Yes, launders them like a freaking Mafia drug front. At one time this was the 'it' book to read.
. I need help with numbers. In summary: strongly recommended as a guidebook on the crisis, very entertaining, but maybe not the one-stop shopping it might have been for assigning all warranted blame. He moved to New York for training and witnessed firsthand the cutthroat, scruple-free culture that was Wall Street in the 1980s. As mortgage bonds were a new kind of bond, they needed help understanding them. Banks are using complex practices that obscure even from themselves the fact that these bonds are based on mortgages that have a very high chance of defaulting which, after enough people default, will make the bonds worthless. And where did the real demand for such mortgages come from? When it came to bankrupt Orange County with bad advice, Merrill was there.
The Big Short: Inside the Doomsday Machine Book Report/Review
This all paints him as a true eccentric, someone incapable of being anything but himself. The 1 New York Times bestseller: "It is the work of our greatest financial journalist, at the top of his game. Not surprisingly under the circumstances, a great many of these bonds which increasingly consisted of utterly worthless mortgages were rated triple A, the highest possible rating. Now Original review: May 4, 2010 Lewis has a talent for making his readers feel smart. At the same time Burry was discovering CDSs or subprime mortgage bonds, an insurance company called AIG FP was building and selling what was called collateral debt obligations, or CDOs.
Lewis is no newcomer to Wall Street. But, at the same time, these characters were dismayed that their pessimistic view of Wall Street had been right after all. They have no idea how much they will have paid for that vehicle at the end of seven years. It was as if the ordinary rules of finance had been suspended in response to a social problem. Just as the author contended that the fair city of Düsseldorf in Germany is a Dusseldorf Dunceville , he would have us believe that banks generated flawed mortgages in response to a high demand for such instruments. Success was an individual achievement; failure was a social problem. This made these investments more exciting for buyers and easier to sell.
Mortgage companies then repackage several sets of hundreds of loans from across the country. On top of that, the bank collects additional income from processing such loans. All of this links the health of the U. Strippers in Vegas had 5 multimillion dollar homes. Each of these handful of men have a very odd beginning and has some unusual attribute that led them, either by genius or character flaw, to see that this was the Mother-Of-All-Scams. Unfortunately, none of them worked for the SEC, the Federal Reserve, the FBI or the Wall Street Journal - they all worked for hedge funds. A mortgage bond was a bond that included hundreds of mortgages that were offered to the American public.
Do not invest in thing you do not understand and do your homework when you hire an investment manager. These were a collection of the lowest and riskiest levels of mortgage bonds bundled together. Or, maybe now I do after all. I found the book informative but it did feel kind of dry and boring at points. Now I finally know the sleaziest, oily, untruthful, and arrogant class of people in the US--financial brokers at the big Wall Street investment banks. It is also interesting that no one really seems to care and the Goldman Sachs brand appears to be as strong as ever. .