Customer Reviews

How I Caused the Credit Crunch: An Insider's Story of the Financial Meltdown

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Tetsuya Ishikawa provides excellent insights into the dynamics behind the recent - almost as in `of recent memory' - global financial crisis. In the introductory chapter, Ishikawa admits quite openly that he had visions of writing something more serious but was told that he needed to include frequent and salacious accounts of binge drinking and libidinous partying at places like The Spearmint Rhino. Unless the author has a hefty name like George Soros, apparently no one would be willing to plough into an analysis of the causes of and lessons learnt from the most recent worldwide financial meltdown. Setting this aspect aside for the moment, Ishikawa does an admirable job of introducing and explaining the complex world of securitisation - asset-back securities, collateralised debt obligations, even "synthetic arbitrage CDOs" and other curious creatures. The author uses two devices to great advantage: the first person "this is actually how it happened - I was really there" narrative; and explanations of fairly sophisticated comments in the tight, no-nonsense shop talk of investment bankers. (His preferred didactic tool is the character Mike.) Two additional devices help the reader as well: frequent insertions of back-of-the-napkin schematics and the glossary appended to the text. If by chance you happen to have a son, nephew or grandson who can't seem to focus on fixed income instruments without frequent references to the pulchritude and short skirts of hedonistic secretaries and girlfriends, then this book would make an ideal gift - a sneaky way to educate him!

I got this book as I wanted to understand CDOs, CDSs, MBS etc without reading a heavy finance book that will put me to sleep. Heard that this book explains things quite well and I was not dissapointed. Being an ex-investment banker (plain vanilla equities) I knew a little about derivatives as I left the industry as they were taking off. This book gets into how things are originated, sold off to various counterparties and eventually you can clearly see how disaster was inevitable.

The way the book was written makes it easy reading. The author writes from the prespective of Andrew Dover, a young Oxford grad who, with lucky career choices and hard work, wound up extremely successful in securitization. We learn about these products as Andrew learns the ropes in the business. All explanations done in layman terms with some back of the napkin diagrams to help. For once I can keep track! Of course, the story is full of the cliched lifestyle (fast cars, strippers, luxury vacations etc) you hear about, but definitely that is not far from the truth.

These days there is a lot of anger directed at the bankers, who are the easiest targets to lay the blame. This book will give you a much better idea of the machinery that was behind the current financial crisis, and learn to avoid the pitfalls of liquidity and easy money. (if you can resist the temptation)

I found the book somewhat informative on the industry. I thought the Author wooosed out though when leaving real names and real firms and replacing with names like "orrington" and "Irwin May" way too annoying trying to keep up with who was Merrill, Who was Lehman, or Bear Stearns. And gratuitous sex added nothing....a complete waste of money.

I've read a couple of books on the credit crunch and had high hopes on this one but it didn't interest me at all. I read up to about page 32 and it has sat on my shelf since then. As an alternative, I recommend The Big Short: Inside the Doomsday Machine by Michael Lewis.

If you've read any other crisis books, as I have, you'll find this pretty ordinary. If you like tales of banking excess, chock full of steamy sex episodes fueled by $500 bottles of bubbly and "coke", then you may like the book. If you are looking for an anecdotal "insider's view" on how the dynamic on the bank trading desks reacted to the historic events, as I was, you will probably be underwhelmed.

He seems to like casual sex more than ABS anyway.

However, as an American one can only laugh as the the well educated Brit tries unsuccessfully to use metaphors like the "Duracell bunny" and "Jemma Jameson". For a nerdy crisis junkie like me, who is not nearly as promiscuous as our author and protagonist, I must say that I even know about Energizer batteries and Oscar-nominees named Jenna.

Happy reading.