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Must-read expose/ explanation by Michael Lewis (author of Liar's Poker) of Wall Street's "doomsday machine," as Steve Eisman calls it. Not sure I understand completely all the ins and outs of "selling short" and "shorting," but Lewis articulates it well enough. The first passage I highlighted really captures the "sorcerer's apprentice gone mad" quality: There really weren't enough unqualified mortgage borrowers to satisfy investors' appetite for collateralized debt obligation (CDOs) packages, so "shorts" step in to create a kind of magic alternate -- like the splinters of wood when the apprentice tries to chop the enchanted broom into bits, and thereby just creates more brooms.... So in the end, you have more losses than loans.

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Michael Lewis MichaelLewis finance michael_lewis wallstreet portfolio.com financial_crisis crisis

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Financial Times FinancialTimes FT Willem Buiter WillemBuiter Maverecon fiscal banks banking finance crisis economics politics Europe global

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Paul Kedrosky PaulKedrosky finance investing investment markets mycomments Bretton Woods BrettonWoods BW3

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FT Willem Buiter WillemBuiter Maverecon Iceland banks banking economics finance politics Martin Wolf MartinWolf Europe bailout Euro Financial Times FinancialTimes mycomments

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ping.fm thinktank research reference politics policy international economy europe eu thinktanks think-tank finance economics CEPS European Studies

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humor humour finance bailout internet scam crisis

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Paulson Plan Money WSJ bailout oped opinion Andy Kessler AndyKessler politics government finance economics democracy economy wallstreet

The crucial problem on this side of the Atlantic is that the largest European banks have become not only too big to fail, but also too big to be saved. For example, the total liabilities of Deutsche Bank (leverage ratio over 50!) amount to about €2,000bn

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FT Financial Times FinancialTimes finance Comment analysis Central Bank ECB AIG CDS credit swap regulation European banking Europe crisis arbitrage insurance Deutsche DeutscheBank Fortis

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Bailout House Congress War RoomWarRoom Salon finance politics 538 Alex Koppelman AlexKoppelman

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NPR ThisAmericanLife TAL recession realestate radio podcast news mortgage money subprime this_american_life finance culture housing crisis lending NYT NYTimes

A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without

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NPR ThisAmericanLife TAL recession realestate radio podcast news mortgage money subprime this_american_life finance culture housing crisis lending

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Resolution Trust RTC crisis WSJ regulation realestate politics management government economics finance business policy NICHOLAS BRADY NICHOLASBRADY NICHOLASFBRADY EUGENE LUDWIG EUGENELUDWIG EUGENEALUDWIG PAUL VOLCKER PAULAVOLCKER PAULVOLCKER howto

Forgive me for allowing this to distract me....

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crisis finance WSJ RTC policy economy mortgage credit default swaps creditdefaultswaps CDS

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Bloomberg finance Morgan Stanley MorganStanley Deal Wachovia John Mack JohnMack

Just a bizarre statement from someone like Mack.... Of /course/, this is rational. Come on!... He must not get the math of multi-sigma events.... A scary thought - esp. if you were a recipient of this email.... And "irresponsible?..." Does he not get that

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Deal Journal DealJournal WSJ Morgan Stanley MorganStanley John Mack JohnMack Memo finance bizarre

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Bank America BofA Merrill Lynch MerrillLynch WSJnews merger M&A arb riskarb deal finance BAC merceroak

This (anti-short-selling BS) is so bogus.

www.nytimes.com/...15short.html - Preview

NYTimes NYT finance short short-selling bogus BS policy politics Lehman LehmanBrothers LEH

This kind of amazes me. I always thought of AIG as Super Tough - borderline unethically Tough - but Super Smart. How do we understand this? Is it just (LTCM-like) Hubris?...

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Insurance NYTimes NYT AIG finance credit derivative default swap creditdefaultswap valuation mortgage reinsurance

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Complaint Henry Mckelvey Blodget HenryBlodget SEC litigation securities research Wall Street WallStreet finance investment tech HOMS ATHM LFMN

Sounds reasonable. Who should we bail out? Taxpayers, or equity holders?... That seems like a no-brainer....

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William Bill Ackman WilliamAckman BillAckman finance plan Fannie Freddie MarketWatch mortgage FNM FRE PershingSquare