The World's Best Book Summaries
Who is The Big Short‘s Dr. Michale Burry? How did he predict the 2008 financial crisis, and what did he get out of it? Dr. Michael Burry of The Big Short fame is a medical doctor by training and an investor and hedge fund manager who predicted and profited from the 2008 subprime mortgage crisis. We’ll cover Dr. Michael Burry’s background, the background of the financial crisis, and how Dr. Burry shorted the housing market.
What events led up to the 2008 bank bailout? Did Wall Street deserve to be bailed out? What was the true bank-bailout cost? Who paid it? We’ll cover the events leading up to the 2008 bank bailout (also known as the Troubled Asset Relief Program, part of the Emergency Economic Stabilization Act) and how it hurt the American taxpayer.
Maybe you’ve heard of mortgage-backed securities in relation to the 2008 financial crisis. But what are mortgage-backed securities? How do they differ from other investments? A mortgage-backed security (MBS) is essentially a bond, or debt instrument, that’s comprised of a bundle of home mortgages (often running into the thousands) that have been packaged together into a tradable asset. Learn the history of mortgage-backed securities and how they infiltrated Wall Street, becoming one of the main contributors to the 2008 financial crisis.
Who is Ben Hockett? How was he involved in the “big short” that profited from the 2008 financial crisis? Ben Hockett is a former Deutsche Bank trader who left Wall Street behind to trade derivatives from his home in Berkeley Hills. In 2006 he worked with investment company Cornwall Capital to short the housing market and profit from the 2007-2008 subprime mortgage crisis. In the movie The Big Short, Brad Pitt’s character Ben Rickert is based on Ben Hockett. We’ll cover Ben Hockett’s background, his major role in getting Cornwall Capital the recognition it needed to be a player on
What is specialty finance? What does it offer, and how is it risky? Did specialty finance loans contribute to the 2008 financial crisis? Specialty finance is the euphemistic name of financial industries that provide financial products and services to the least-creditworthy Americans, people who wouldn’t be able to get a loan from a traditional bank. Learn how the industry of specialty finance became lucrative and how its preying on uncreditworthy Americans contributed to the 2008 financial crisis.
What is a tranche in finance? How did they change the mortgage-backed securities market and make subprime loans desirable to investors? A tranche is a slice or portion of a security sold to investors. Learn how tranches work in finance, what their role in mortgage-backed securities is, and how they revolutionized these securities so quickly and dramatically that they laid the groundwork for the 2008 financial crisis.
Who is Steve Eisman, of The Big Short fame? What is his background in finance, and how did he profit from the 2008 financial crisis? Steve Eisman is an investor best known for having shorted the housing market and profiting from the 2007-2008 financial crisis. In the film The Big Short, Steve Carell’s character Mark Baum was based on Steve Eisman. We’ll cover Steve Eisman’s background, his brash personality, and how he shorted the housing market.
What caused Morgan Stanley’s 2008 crisis, in which the bank almost collapsed? Who paid for Morgan Stanley’s bailout? We’ll cover the events leading up to Morgan Stanley’s 2008 crisis and how its bailout cost American taxpayers bukkuibs.
How did the actions of AIG lead to the 2008 crisis that affected millions of Americans? Did AIG know the role it was playing in the catastrophe, or was it ignorant of the wider implications of its business practices? And who paid the price for AIG’s bailout? We’ll cover how AIG insurance company (American International Group) aided banks in the events that would lead to the 2008 financial crisis and the results of the 2008 AIG bailout.
What is “side pocketing” in relation to hedge funds? Why would a fund manager need or want to “side pocket” investors’ money? Is it legal? Side pocketing is when a hedge fund manager temporarily refuses to let investors withdraw their money. We’ll cover how side pocketing actually benefitted investors in hedge fund Scion Capital, profiled in the book and movie The Big Short.