I just finished reading Michael Lewis' new book on the financial crisis: The Big Short. I thought I had understood generally what went on with mortgages and mortgage-based derivatives but once I read Lewis I realized that my knowledge was incomplete. This is far from a complete history of all aspects of the recent financial melt-down but it does a great job explaining the mortgage-based financial instruments, and the ways in which they were traded, that helped to create the whole crisis. Lewis understands Wall Street and the trader mentality well and writes about it better than anyone else that I can think of.
I thought that I was cynical enough about Wall Street after experiencing a small slice of its amorality, arrogance, and greed during the process of taking a company public and then running a public company during the end of the high-tech bubble of the 1990s. After reading Lewis I realize that I was nowhere near cynical enough. If you aren't angry after reading this book, you aren't paying attention. If Bernie Ebbers and Jeff Skilling belong in jail for their misdeeds in the late 90s then there are dozens of executives at Goldman Sachs, Lehman Brothers, Bear Stearns, Merrill Lynch, Citigroup, and on and on that also belong in jail. The damage these greedy, stupid, immoral, and/or amoral shits inflicted and were allowed to inflict on our economy is far worse than anything anyone did in the late 90s. And this book doesn't even begin to touch on the other amoral, stupid, greedy folks at Fannie and Freddie and Congress and the Fed and the SEC that also have fingerprints all over other dimensions of the crisis. Nor, for that matter, does it touch on all of us that leveraged ourselves way beyond our ability to pay and our responsibility towards the crisis as well.