Longreads + Open Thread

Courses, Banks, Banks Again, Shorts, FTX, MBS, JPM



Open Thread

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In last week's open thread, Philo drops some book recommendations:

The Lost Bank, about the rise and collapse of Washington Mutual, still the largest bank failure ever. This one got lost a little among all of the other books about the financial crisis at the time but it was really well done. This was about bad credit rather than duration risk but in general rhymes a lot with SVB - got really big really fast (never ends well in finance) and clueless leadership.
Fatal Risk, which is about the rise and fall of AIG. Also one that got a little lost with the other financial crisis failures but it was interesting to read about how AIG came to be, and how it all fell apart.
A Piece of the Action, which is about how modern consumer finance came to be - Visa, money market funds, credit cards, mutual funds, discount brokerages. It's from 1994 but holds up very well today. Joe Nocera is a great writer and this is an exceptional business book.
Fiasco, a mid-90s classic about the MS derivatives desk. One theme here is how a lot of money in the world is controlled by people who are apt get in over their heads with financial bets they don't understand. Sometimes they get "get their face ripped off" by people selling derivatives and sometimes they just pile into risky bets without understanding them. In the mid-90s you had a lot of high profile cases of huge losses from rising rates (P&G, Orange County) which comes up in this book and that is playing out again now, in a different way.

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