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RSSMichaels Lewis was a guest on CBS Networks’ “60 Minutes” yesterday, who’s news book with the name “The Big Short: Inside the Doomsday Machine” is now available on the book stalls.
To pick someone to write an autopsy report on the Wall Street financial collapse 18-months ago, you couldn’t do any better than Michael Lewis. Michael Lewis is one of the county’s preeminent non-fiction writers with a complicated mind numbing material in the fascinating yarns.
Michael Lewis wrote his first best seller “Liar’s Poker’’ about his experiences as a young wall street bond trader, when he was just in his 20’s and since followed with seven more best sellers on subjects ranging from Home Game, Silicon Valley, New New Thing a Big Time Sports, Money Ball and the The Blind Side.
His new book Big Short: Inside the Doomsday Machine that came out last weekend, Michael Lewis explains that how some of Wall Street’s finest minds managed to destroy $1.75 trillion of wealth in this mortgage market.
Michael Lewis in his interview with CBS “60 Minutes” said that this was an episode where capitalist economy was almost demolished just by the capitalist and in the most stunning way they were sort of demolished by their own filing.
“The incentives for people on Wall Street got so screwed up that the people who worked there became blinded by their own long term interests” Michael Lewis said on CBS “60 Minutes”.
It was an interesting interview by the Wall Street veteran Michael Lewis.
A must see interview that will shock, when you hear the dark secrets of Wall Street capitalists.
I wish that I knew about hedge funds betting against the sub-prime market in 05 and 06 as I had investments with Soloman, Smith Barney who upon my request for slightly better returns, my advisor recommended Countrywide bonds paying 6.5% and I asked what are they rated, he replied AAA investment grade. Two months later after I read the perspectus and being a listing agent/broker in North Orange county, Ca. and seeing a trend of 100% financing on homes in the $500,000 to $660,000 in Buena Park being purchased by families making less than $100K per year, I knew a melt down was eminent. I asked my Soloman advisor if he had read the perspectus about the bonds he had sold to me and he replied no, and when I told him how this investment grade, AAA rated bond had only 70 % of the notes rated as “A” paper, while 20 % were Alt-A and the rest was peppered with sub prime coupled with declining standards for qualifying such as “stated Income” loans, I KNEW in 2005 and 2006 that this market would collapse and this bubble would burst…I argued with Gary Watts of Impact Real Estate in e-mails that this was going to collapse and he said that it was just a regional experience and that South Orange County was differst than my market place.
Unfortunately, my advisor never mentioned anything about the ability to bet against the sub-prime market and I promptly asked that they sell my bonds and split any loss incurred with me, which they did (-$2,000) after I signed a letter/ disclaimer form now to the end of time that I could never sue them and they asked me to move my money out of their company which I did. If only I knew about hedge funds….
I even tried to convince my own sister not to sell her modest home in Gilbert AZ., which was close to being paid off, and not buy a very large home at top dollar at the peak of the market, but she did and they are losing the home. I have stories of buyer’s that purchased my lisitng in Buena Park, Ca.that would make you quesy!