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Archive for August, 2010

Too Big Too Fail:
Reading this (technically listening) after listening to The Big Short. In the latter, the author and characters continually observed that the people running the Wall St. investment firms did not understand what their businesses were actually doing, either in scope or in execution. Too Big Too Fail reveals the same insight, though it does so by absence. Rather than highlighting the executives’ ignorance, the author focused on what the executives actually worried about: short-selling, liquidity, raising capital, and the sudden emergence of these issues. If the executives had the insight that Mike Burry or Steve Eisman had – which they got by actually reading what the mortgage investments were – they would have been less surprised by the market’s sudden downturn.

The book also highlights the incredible difficulty of obtaining regulatory concessions from the investment banks. To help lessen the disaster, the Fed, Treasury, and Congress needed to act – basically without haste. Once their actions reduced the turmoil and allowed the investment banks to return to massive profitability, the urgent impetus for reform diminished rapidly. Since reform took significantly longer than the stabilizing actions, Congress operated from weakness.

For a novel, I’m reading The Wind-Up Bird Chronicle. About half way through. So far, the most striking themes represent the nature of reality, which also includes the nature of self. Who are we, and how do we know others? The protagonist frequently mused that he may not have known his wife. Creta talked of having three different personalities, and was unsure if any were the right one. The book contains this subterranean current that each character is more and less than what the author presents.

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