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I am a recovering quant, and let me say that this book explains the financial crisis that we are still in more precisely and cohesively than any other book besides maybe "The Big Short" (although this book is much more technical and precise).
In particular, the book explains how traders and quants think, how the regulators got confused by both economic theories and pervasive opacity, and how the hedge fund Magnetar managed to set up enormous bombs (in the form of synthetic CDOs which were constructed to fail) that blew up the entire system.
A must-read for anyone seriously interested in knowing how this all happened and how we can keep it from re-occurring.
 

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Published two years ago, Econned is even more relevant today, and it will remain so until the next financial crash or until we've done something about it.
This the story of how our financial system
has become a mass ruse, allowing Wall Street and the largest banks to become predatory, treating their clients as lambs to be fleeced and fatted calves to be slaughtered. It is the story of how a very small group of people gained complete control over the American, and much of the global economy, driving it into the ground, then walking away with trillions of more dollars, while the economy remains on life-support.
Econned is an excellent read and needs to be read by all. It is the story of a criminal class, who have separated themselves from the majority to seek their own profits. It is the story of how our political economy is broken. In the end, it is a call to the American people, in the great tradition of this republic, to step-up and fix it.
 

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Outstanding! Yves Smith has provided a well written, fact based and thorough primer for anyone who wants to reach beyond ideology to facts and empiricism.

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Alan Greenspan sheepishly conceded in October `08 that "The whole intellectual edifice...collapsed in the summer of last year."
To help understand what the Oracle might have meant and what it
means to us , Yves Smith examines that edifice, piece by piece, player by player (Fed Treasury, ratings agencies, bankers, think tanks) to describe a kind of con built on flawed psuedo-scientific economic theories that drove monetary and (de)regulatory policy.
Those policy choices had terrible consequences. For example, she describes an underreported strategy that employed some of the derivative `innovations' that accelerated the flood of money into subprime mortgages just at the point where it was becoming obvious to anyone with a pulse, including policymakers, that this ship was going down, and soon. The money needed to keep the lending programs alive was provided by those investors who were clever enough to game the system to pump and dump subprime.
This turns the conventional wisdom that the bubble is the fault of greedy homebuyers on its head and lays responsibility back where it belongs, at the feet of policy makers and the bankers we've protected. That critical point needs to be heard, loudly and frequently as we try to evaluate solutions to both the systemic banking crisis and the foreclosure crisis dumped on the government, and us, as a result of this economic belief system.
 

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A great book. I enjoyed reading this book.

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