"The Big Short" ---> Puts a face on Credit Derivatives

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The Righteous H

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I had really struggled with the credit derivatives section out of everything else in the material. This book, by the guy who did “Liar’s Poker” is all about how these guys basically created the crisis providing all sorts of liquidity in credit default swaps backed by mortgages.
I really felt like night and day as I reread the section as I was able to put a face on all this seemingly useless jargon. Give it a try. Book is a fun and easy read. Took me one day.
 
Totally agree - one of my favourite books. You can check out his column on BBCO on Bloomberg, always an interesting read.
 
brewey Wrote:
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> Totally agree - one of my favourite books. You
> can check out his column on BBCO on Bloomberg,
> always an interesting read.
Liar’s Poker is one of my favourite books i mean, but the Big Short is a good read too. Micheal Lewis (and Tom Wolfe) both have good style and interesting stories to tell in my opinion. Maybe once i finish taking exams i’ll get more time to read more!
 
Basically follows the story of a few different groups and people who all decided the subprime market was going to collapse and decided to short it. They managed to get the banks and AIG to give insurance using CDSs and as a result created the liquidity that hastened the bursting of the bubble.
 
I guess I was looking for the clear understanding you found with derivatives. Is this something you could sum up quickly. Personally I struggle with all the various products as well. Though when I took L1, it was only 10% of the exam so I punted most of it and still passed with ease.
 
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