Monday, September 12, 2011

My Big Short

From my dad's suggestion, I started The Big Short, by Michael Lewis. It's about these guys who predicted the stock market crash of 2008 and found out that a lot of subprime lending companies committed fraud. It's kind of interesting because you get to see these guys' personality flaws and irregularities. These 'weird' characteristrics allow them to focus on something, and be really brilliant, but weird in social situations. My dad really liked this because he's a commodities trader and he says he's really good at it because he's a little weird (I agree). Unfortunately I was struggling with the vocabulary because it was a lexicon of a profession that I am not a part of. I knew the definitions of the words, but I didn't understand how they were applied, and the motives of companies for doing things a certain way. I told my dad of my problem and he told me to read it beside him and ask questions as they formed. This is how it went:
I read: "Subprime mortgage lending was still a trivial fraction of th U.S. credit markeets-a few tens of billions in loans each year-but its existence made sense, even to Steve Eisman."
I asked, "Dad, what does that mean?"
Next sentence: "I thought it was partly a response to growing ineuality. The distribution of income in this country was skewed and becoming more skewed, and the result was that you have more subprime customers."
I asked, "Dad, what does that mean?"
I did learn a lot, but because it happened about every sentence, I only got to page 30 in 3 days. I'd like to read it sometime, maybe when I'm not under an obligation to read 100 pages a week. Also I would like to have finished economics so I can be familiar with the voabulary.
I quit. Sorry :(

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