The Lemon Fool

Hi,
Can anyone recommend a good, readable account of the 2008 crisis and subsequent bail out?
Thanks
LTB

Stress Test by Timothy Geithner. A touch on the long side but he was right in the thick of it - he was president of the Fed until 2009 and then Secretary of the Treasury under Obama until 2013.

A colossal failure of common sense covering the fall of Lehman Brothers is a fascinating read.

Pendrainllwyn

The Big Short (M Lewis) and Fool's Gold (G Tett) are ones i've mentioned on another thread recently - certainly good for 'background'

AleisterCrowley wrote:The Big Short (M Lewis) and Fool's Gold (G Tett) are ones i've mentioned on another thread recently - certainly good for 'background'

I'd second Gillian Tett's book, Fool's Gold, it's a very good account IMO.

RC

Yes, Big Short is very good. Highly readable.

Thanks for the info

I'm doing a lot of shredding prior to moving and have just dealt with my Kaupthing Edge statements... Remember them?
I did OK out of them actually - massive interest rates, and when they went bust it all ended up in ING nice and safe.
Not sure where ING went - they did have a big office in Reading on my commute route, near Oracle and Microsoft

Hi,
Can anyone recommend a good, readable account of the 2008 crisis and subsequent bail out?
Thanks
LTB

Boomerang by Michael lewis , who also wrote The Big Short. Boomerang looks at the effects of the debt bubble and resulting crash for ordinary people in different counties. i found it more entertaining than The Big Short. Weird times, Icelandic fisherman becoming currency traders with no idea of what they were doing, that sort of thing.

AleisterCrowley wrote:Not sure where ING went

I think Barclay's took them over. They certainly took over an account I had with them.

My ex -Kaupthing ING accounts certainly ended up with Barclays, until I transferred..erm, somewhere else
Looks like ING are still going, having looked at Wikipedia
(Going off topic, but I was surprised to see a branch of Handelsbanken AB In Windsor..Didn't realise they had UK branches)

There was an excellent (BBC World Service) radio program yesterday on the 2008 financial crisis. It is still available online at https://www.bbc.co.uk/programmes/w3cswkdn. "How Lehman's Collapse Changed the World"

scotia wrote:There was an excellent (BBC World Service) radio program yesterday on the 2008 financial crisis. It is still available online at https://www.bbc.co.uk/programmes/w3cswkdn. "How Lehman's Collapse Changed the World"

Thanks for that. I will give it a try, having been disappointed by a R4 programme on Saturday 'Lehmans: A Backwards Collapse'

Expecting a documentary I got a collection of end-to-end sound clips of BBC News from the period. After a few minutes I turned off.

Leothebear wrote:
Can anyone recommend a good, readable account of the 2008 crisis and subsequent bail out?

Just to let you know that 'The Big Short' is currently on the Amazon 'Daily Kindle Deal' for just 99p if that would suit your reading situation -

https://www.amazon.co.uk/Big-Short-Insi ... B004JXXKWY

I've not read the book, but did see the film and really enjoyed it - a tricky subject entertainingly told....

Cheers,

Itsallaguess

Though covering a longer period than just 2008, and concentrating solely on HBOS, Ray Penman's "Hubris" is an interesting take on how Bank of Scotland got to where it did.

Have also read "Making it Happen", Iain Martin, re RBOS, and "Shredded", Ian Fraser, re same,but imho "Hubris" is a better read than either.

Not as a criticism, but to aid anyone searching for it, the author is Ray Perman (not Penman).

I haven't read it yet, but am now tempted. I was lucky/unlucky enough to be employed at a sufficiently senior enough level in the Bank to have an amount of inside knowledge of what was going on. I suspect I will get angry about some of the things he has got wrong in equal measure to the anger at those making the decisions he reports correctly.

Anyway with a decade having passed maybe now is the time to read the book with sufficient deep breathing to counter the spleen venting I know I will be putting myself through.

Looking forward to another twenty years time when government records currently covered by the Official Secrets Act are relaxed when I am sure historians and future current affairs aficionados will be rewarded.

I listened to a very interesting podcast the other week called, 'Cassandras of the Crash' on Radio 4 - it was a discussion hosted by Aditya Chakrabortty between four individuals who tried to warn of the impending debt issues in the years before 2008 and were ignored. These four individuals are, Raghuram Rajan (former governor of the Reserve Bank of India), Steve Keen (professor of economics at Kingston University, London), Ann Pettifor (director of PRIME (Policy Research in Macroeconomics) and council member of the Progressive Economy Forum)and Peter Schiff (stockbroker and investor).

They also have some interesting opinions on what's going to happen next...

Cheers, OLTB.

OLTB wrote:
They also have some interesting opinions on what's going to happen next...

Are you in a position where you might be able to tell us what they were?

Cheers,

Itsallaguess

Itsallaguess wrote:

OLTB wrote:
They also have some interesting opinions on what's going to happen next...

Are you in a position where you might be able to tell us what they were?

Cheers,

Itsallaguess

Yes, sorry, re-looking at that last post makes it seems as though I'm keeping it secret - I'm not, it's just that I listen to the podcasts in my car on the way home and sometimes owing to concentration, the details slip by me! I think that all of them were very wary of the amount of debt that has built up again, nothing has changed although the banks are far better capitalised and all (I think) were negative on the US market as they see rising interest rates inevitable. I think I'll have to listen to it again in a dark room. Peter Schiff just thinks we should all buy gold as the US market is going to hell in a handcart but as his website is called, 'schiffgold.com' perhaps he has a motive for thinking this!

It's a really good listen!

Cheers, OLTB.

Arghh - forgot to mention, the podcast is, 'This is Capitalism' and dated 26 September.

Cheers, OLTB.

dealtn wrote:
I haven't read it yet, but am now tempted. I was lucky/unlucky enough to be employed at a sufficiently senior enough level in the Bank to have an amount of inside knowledge of what was going on. I suspect I will get angry about some of the things he has got wrong in equal measure to the anger at those making the decisions he reports correctly.

Anyway with a decade having passed maybe now is the time to read the book with sufficient deep breathing to counter the spleen venting I know I will be putting myself through.

I have just finished the book, and was surprised at how infrequently I was thinking "that's not right" and even fewer the occasions it got my back up.

In general the book is strongest in the period leading up to the crisis, and the creation of HBOS than it is when considering the crisis itself, at least in my opinion. I think some of the book's conclusions suffer a little given the passage of time, but that is inevitable.

The author is a long way from being the worst at making judgements with the benefit of hindsight about decisions made at the time, particularly with respect to lending decisions, and some of the assets purchased, but doesn't avoid that trap entirely. The fact that sufficient time has now passed to reflect that, like a lot of the "bad loan portfolios" at other institutions (B&B, Northern Rock), these assets were far from bad at inception, makes commentary on them when they were still relatively recent history, at the minimum a little premature. You could easily argue the bigger mis-pricing was during the crisis, and the forced(?) selling was the bigger mistake. (Ask the buyers!).

I concede, were the whole experiment re-run to see how markets and governments and regulators would do things a second time round, I doubt much would be different even learning this lessons. It does though rebalance, in my opinion, the arguments that liquidity, or more correctly the lack of it, was the dominant reason for bank failure, rather than the lack of capital "required" to deal with the (mark to market) losses.

That's not to say some of the decisions made by the Directors at the time weren't wrong ones. Like life in general some will make mistakes but be publically judged, sometimes quite savagely, about them. Others will make mistakes and not be either discovered, or rebuked. Frustratingly others will make mistakes, publically, and yet be judged much less harshly despite the mistakes in some cases being worse.

So, in conclusion, I would say it was a decent read, and a good professional attempt by the author to show the inside story of the history of one bank. It isn't a great book though to get an insight into the broader question of the causes, or history, of the financial crisis.