Product Description

The sub-prime mortgage crisis is only the beginning: A more profound economic and political restructuring is on its way.We are living in the most reckless financial environment in recent history. Arcane credit derivative bets are now well into the tens of trillions.According to Charles R Morris, the astronomical leverage at investment banks and their hedge fund and private equity clients virtually guarantees massive disruption in global markets. The crash, when it comes, will have no firebreaks. A quarter century of free-market zealotry that extolled asset stripping, abusive lending and hedge fund secrecy will come crashing down with it."The Trillion Dollar Meltdown" explains how we got here and what is about to happen. After the crash our priorities will be quite different. But things are likely to get worse before they get better. This book will be indispensable to understanding the gross excess that has put the world economy on the brink - and what the new landscape will look like.

Product Details

• Amazon Sales Rank: #218649 in Books
• Published on: 2008-04-01
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 224 pages

Review
The first big book on the credit crunch saw the crisis coming three years ago ... (Morris s) provocative book is a well-aimed opening shot in a debate that will only grow louder in coming months. --The Economist

(t)his is a scary book for scary times... Morris provides a fascinating and clear chronicle of how a good idea turned into so many bad loans. --Spectator Business

Sunday Times
...a comprehensive and jargon-free description of the hideously complex financial securities that have brought the credit system to collapse.

Review
'(Morris) explain(s) in clear prose, and in a book that is barely more than a monograph, the blow-up in the world's financial markets. Morris traces the origins of the credit bubble to the illusion that clever financial engineering was the same as efficiently managing risk. He is justifiably harsh on the regulatory failures that hastened the crisis, but he is no dogmatist. He acknowledges the merits of financial innovation, and his model for reform is the tough monetary policy that defeated inflation in the 1980s. A similarly painful reckoning now - a huge write-down of assets - is necessary to resuscitate the financial system."

Customer Reviews

Very good coverage of the basics.
If you are buying any other books, or reading any other articles on the recent "credit crunch", you should seriously consider getting this book too. The writer is a lawyer, and in very precise plain clear language, describes how each of the new types of financial instrument, from "put" to "synthetic collateralized debt obligation", works, covering why people originally developed them, and how people have gone on to use and enhance them. It then covers all the risks that have developed as a result of their use in practice, and briefly covers the overall financial consequences, as far as people understand them. This includes talking about various regulatory failures that have contributed to the crisis.

He then makes an overall estimate of the kinds of losses that are likely. Although the real losses are looking even more serious now, several months later, he gives figures and estimates in his reasoning that enable you to get some kind of overall picture of the problems. His focus is almost entirely on the United States, but the financial instruments used elsewhere are the same, and the regulatory failures similar.

If you are reading other accounts of the developing crisis, this is a very good place to get the basic technical information on what everyone is talking about. Some books leap into explanations, with only very brief, and sometimes misunderstood, accounts of the financial instruments involved. Even if you disagree with some of Morris's points of view or conclusions, his clear account of how each financial instrument works is still very helpful.

An excellent, readable account
I found this very short book (169 pages plus notes) very helpful in understanding what the "credit crunch" is about--what caused it, what the current imbalances in the financial system are, and how it may unravel. It starts further back in time than I would have expected (the 1950s to 1970s), but does this to explain the regulatory and financial stage on which the bubble of credit was born. Financial and economic terms are explained, without dumbing things down. Really excellent.

Prescient and a great read
I read this shortly after it was published before many of the events in the current financial & economic crisis unfolded. Over the past few months I have seen its reasoning and predictions born out many times. There are still other predictions which only the future will prove one way or the other but having seemed more fanciful at the time of writing to many mainstream analysts now seem anything but. This is the best book I have read on the credit crisis and, whilst I have some background in finance, unlike a previous viewer I didn't think that it overwhelmed with terminology - I thought it explained complex finance in a very readable manner. I was originally a bit suspicious about a finance book written by a lawyer but I have to concede that this is an impressive account.

Once you've read this, if you haven't read it already and are interested for more, JK Galbraith's account of the Wall Street Crash of the 1930's is great reading and very relevant today.