![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
The Big Short
3/5. Nonfiction account of the very small handful of (mostly outsider) financial types who bet against CDO's in 2005-2008. So a slice of the recession story, for those who don't already know what collateralized debt obligations are. Long on personality and short on big firm perspective (see what I did there? okay okay I'm sorry I'm sorry). So it's kind of an unbalanced story – we get a whole lot of perspective from the people who were like 'obviously this sky is going to fall' and almost none from inside Citigroup, Morgan Stanley, UBS, et al. to explain what the fuck they were thinking. Or not thinking. (TBF this is because of confidentiality agreements and lock-up clauses). So it's easy to think that the 2008 collapse was obvious and inevitable, which is true, but also illusory.
Mostly, this book made me think about the profession of risk management. Which is one I am in, when I wear certain hats. And how that function doesn't fucking work when, oh just for an example, your client lies to you. Ahem. Don't ask. Which is fundamentally what happened inside these firms, I think. In the sense that the traders didn't actually understand the assets they were buying, but no one wanted to admit that, so they booked the assets in a completely inappropriate way and risk management couldn't do its job. Makes me wonder how often someone calls me and tells me a story and gets my advice, and I might as well be advising on cinderella.
3/5. Nonfiction account of the very small handful of (mostly outsider) financial types who bet against CDO's in 2005-2008. So a slice of the recession story, for those who don't already know what collateralized debt obligations are. Long on personality and short on big firm perspective (see what I did there? okay okay I'm sorry I'm sorry). So it's kind of an unbalanced story – we get a whole lot of perspective from the people who were like 'obviously this sky is going to fall' and almost none from inside Citigroup, Morgan Stanley, UBS, et al. to explain what the fuck they were thinking. Or not thinking. (TBF this is because of confidentiality agreements and lock-up clauses). So it's easy to think that the 2008 collapse was obvious and inevitable, which is true, but also illusory.
Mostly, this book made me think about the profession of risk management. Which is one I am in, when I wear certain hats. And how that function doesn't fucking work when, oh just for an example, your client lies to you. Ahem. Don't ask. Which is fundamentally what happened inside these firms, I think. In the sense that the traders didn't actually understand the assets they were buying, but no one wanted to admit that, so they booked the assets in a completely inappropriate way and risk management couldn't do its job. Makes me wonder how often someone calls me and tells me a story and gets my advice, and I might as well be advising on cinderella.