All the Devils Are Here
According to the authors, both business journalists, no one has put all the pieces of the financial crisis together. This title explores the motivations of everyone from CEOs and politicians to anonymous lenders, borrowers and Wall Street traders. It goes back more than twenty years to reveal, how Wall Street, the mortgage industry, and the government conspired to change the way Americans bought their homes, creating a perfect storm. The authors take us inside elusive institutions such as Goldman Sachs, AIG, and Fannie Mae, to reveal who changed the game and why.
Stats for nerds
10recommend
13mentions
12people
2010–2026years
85% recommend15% neutral
Mentions per year
What Hacker News says
- Bethany McLean is great. I also enjoyed "All The Devils Are Here"
- > Are we in a bubble?
Yes, clearly, but no one knows when or if it will burst, or how much higher the market can go.
One of the key indicators is the Schiller PE ratio, which compares company stock prices to their profits. It is very high right now: https://www.multpl.com/shiller-pe
Other good indicators are that inexperienced investors are making a lot of money in meme stocks (AMC, GameStop), and cryptocurrencies or NFTs, classic indicators of a bubble.
Many people agree that the reason this is happening is the US federal reserve has kept interest rates too low for too long. This helps stock and home prices, but can also lead to a bubble. The Fed has indicated that they will raise interest rates soon.
To protect yourself first educate yourself on 2008 and the Dot com bubble, read Irrational Exuberance, All the Devils are Here, or watch Money Power and Wall Street, The Big Short, or Inside the Federal Reserve.
Hedging this bubble is extremely difficult but physical assets are nice to have. Cash is losing value more quickly than normal because of high inflation. As always diversifying is the best way to manage risk. This is not financial advice, just my personal opinion.
- "Money Stuff" is excellent. I also recommend the FT. Their Alphaville section is very good. One of my favorite classic Levine articles is "Regulators Want to Slow Runs on Derivatives."
Some other resources I came across via those and friends:
• "Other People's Money" by Kay
• "Zombie Banks"
• "The Money Problem"
• This NY Fed study of shadow banking: https://www.ft.com/content/1a222bf4-f33d-11df-a4fa-00144feab...
• "All the Devils are Here"
- > I don't know about your industry but the abiding memory i have from before the financial crisis of 2009 was of economists fanning the property bubble with the mantra ' the fundamental are sound' and how the worst scanario would be a "soft landing"
If you'd like to read about it, the best contemporaneous piece I've read on it is "All the Devils Are Here" - https://www.amazon.com/All-Devils-Are-Here-Financial/dp/1591...
- If you want to understand the student debt bubble, you need to understand financial bubbles. Take any commodity that "everyone knows is valuable", figure out how to turn it into a financial instrument and re-sell it to a third party investor who has no relationship with either consumer or lender and knows nothing about the product, and then you can create a speculative bubble because everyone starts trading in derivatives of the commodity without knowing anything about it, the level of risk involved, or even who ows them money. This happened with Tulips, it happened with Mortgages, and now its happening with Education. There are a lot of good books on bubbles if you dig for them. All the Devils are Here is a good one. The Big Short is good too - once you realize some of those people who got rich betting against housing bubble, are now betting against the education bubble, and have been for 8 years but nobody listened to them (again).
- There are some really good suggestions here about the economics and finance in general. I think having a good solid understanding of the financial crisis is valuable in today's world. I recommend "All the Devils are Here" by Bethany McLean. It offers a well rounded, facts-first approach to explaining the crisis. It does not point fingers or assess blaim, which is a valuable perspective.
