The Big Short: A Movie Every Economic Developer Should See

Much of what occurs on Wall Street and within the global financial world is Enemy #1 of local economic development. Don’t believe me? See the movie The Big Short.  

The Big Short: Inside the Doomsday Machine is a non-fiction book by Michael Lewis about the build-up of the housing and credit bubble during the 2000s. The book was released on March 15, 2010, by W. W. Norton & Company. It spent 28 weeks on The New York Times best-seller list.

The Big Short describes several of the key players in the creation of the credit default swap market that sought to bet against the collateralized debt obligation (CDO) bubble and thus ended up profiting from the financial crisis of 2007–10. The book also highlights the eccentric nature of the type of person who bets against the market or goes against the grain.

The work follows people who believed the bubble was going to burst, like Meredith Whitney, who predicted the demise of Citigroup and Bear Stearns; Steve Eisman, an outspoken hedge fund manager; Greg Lippmann, a Deutsche Banktrader; Eugene Xu, a quantitative analyst who created the first CDO market by matching buyers and sellers; the founders of Cornwall Capital, who started a hedge fund in their garage with $110,000 and built it into $120 million when the market crashed; and Michael Burry, an ex-neurologist who created Scion Capital despite suffering from blindness in one eye and Asperger’s syndrome.[1]

The book also highlights some people involved in the biggest losses created by the market crash: like Merrill’s $300 million mezzanine CDO manager Wing Chau; Howie Hubler, infamously known as the person who lost $9 billion in one trade, the largest single loss in history;[2] and Joseph Cassano‘s AIG Financial Products, which suffered over $99 billion in losses.

 

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