Janet M. Tavakoli

This book has a very intriguing title, but that is about it. Tavakoli is an expert on credit derivatives and early notices how debt speculation was leading into a big black hole. This book, written shortly after the stabilizing after the 2007-2008 crash, is mostly a long "I told you so". And she may be right, and she may be very smart, but you don't need 350 pages to say "I told you so".

I was hoping to read a bit more about Warren Buffet but though his involvement is frequent it's also frequently repeated and in the form of "Warren thinks this" with very little explanation and background. Tavakoli clearly gives the impression of the greatest respect for Warren Buffet but it's not very interesting without background. I almost get the feeling Tavakoli wants the world to know that she's in contact with him more than actually convey any information from him.

There is also a theme of "let them have it" when banks are starting to collapse. In reality the American (and other) government intervened, and the only major player that died, Lehman Brothers, caused huge problems for innocents and guilty both, so her standpoint is understandable from a morale perspective, but dangerous too. Nobody (I hope) is happy that many of the speculators that caused the problems came out mostly unscathed while millions of poor people in the US went bust. I think everyone can agree that there is no fairness in that, but again, repeating something enough times doesn't make it a more interesting read.

The book has one redeeming feature, it bashes speculative fund managers and bankers hard. They can take it and they deserve everything they get, so I hope the one thing people reading this book remember is that if someone wants to sell you a financial product really badly, it's because they are to gain from it, not you. And bankers and fund managers live on money churn, not gains. Avoid fees like plague since in our low interest, low growth world, any fees will completely wipe out your possible gain. Also, stay away from "financial products" that you don't understand. If the water has been muddied it's because what's hidden is scary.

Finally I think the book could have used a proper editorial overview. There are sentences and paragraphs repeated in different chapters in a way that makes it look very rushed. I do wonder if it was more important to publish "the first" book on the crash, rather than publishing a good book.… (plus d'informations)

Quote from a review by Dynamic Duo on Amazon: "For example, the chapter about the backdating of stock options scandal, although not strictly related to the credit crisis, makes you wonder about the character of the people running corporate America: in the 2006-2007 timeframe more than 120 U.S. companies were under investigation for accounting irregularities; 85 ended up amending their earning statements. She is very critical of the role played by the Office of the Comptroller of the Currency (OCC), which invoked an obscure 1862 provision to undermine the states' ability to police predatory lending. This decision, she believes, had a very negative effect on mortgage origination standards and their subsequent re-packaging by investment bankers. Additionally, she castigates the Securities and Exchange Commission (SEC) for failing to oversee the investment banks. And when it comes to the rating agencies, which blessed some of these securitizations with AAA ("very safe") ratings, she employs the term "financial astrology". Enough said! Ironically, Mr. Buffett, who through its investment company (Berkshire Hathaway) owns almost 20% of Moody's stock, has admitted to her that this is one investment he is not proud of."

Brian Lamb's interview with the author is excellent and can be found at: http://www.youtube.com/watch?v=WA20Am0pwtA Tavakoli has an interesting background. She was trained as a chemical engineer and is now an expert in credit derivatives, etc. Her comments in the interview about crony capitalism made me sad and depressed, not to mention that basically we have a congress on the take.… (plus d'informations)