Review: The inside story of greed and evasion from prosecution
Rating: 5 out of 5
Date: 05 20, 2011
Jesse Eisinger is a senior reporter at ProPublica, covering Wall Street and finance. He writes a regular column for The New York Times's Dealbook section. This single by Eisinger gives the background of the US housing market downturn. There's information here that I hadn't read and I've read a lot.Magnetar was the name that kept coming up when the reporters begin their investigation about the housing and financial crises in 2008. "Getting to the bottom of what Magnetar actually did in the arcane market for mortgage securities took months," the author says.Magnetar betted against it's own deals and pushing for riskier assets to go into them. This increased the chances the deals would blow up.The author questioned who else was buying these bad assets. "Faced with few real investors, bankers did not stop manufacturing securities. Instead, we discovered, they manipulated the business to make it appear as if there was more demand than there was."Shareholders were not in the loop. Banks "created a daisy chain of interlocking deals" and bought each other' leftovers. They also secretly bought their own deals that they couldn't sell.The author says that decisions made by individuals made the boom last longer and it made the collapse worse. Moreover, few would be held accountable for their actions.If you're interested in the secret manipulations of bankers and the greed that brought down the financial pillars, you'll want to read this exciting single.- Susanna K. Hutcheson