Watch: The Mass Delusion Of the Sub-Prime Mortgage Crisis
Tags: 60 Minutes, Author, Credit default swap, Financial services, Michael Lewis, Mortgage, Subprime lending
60 Minutes did a fascinating piece on author Michael Lewis, who is a very successful non-fiction writer, that detailed the sub-prime mortgage crisis and the subsequent world wide financial collapse beginning in 2007.
He laments on his research that his biggest fear would be that people look at those who instigated the collapse as merely criminals, instead insisting that it was really mass delusion which led to the current state of events. It was short term gain which deluded everyone, minus the few who figured it out before it happened, and I fully believe that such mass delusions overshadow other aspects of civilization, including our insatiable appetite to buy stuff at the behest of marketers, only to throw whatever it was away and begin the cycle all over again.
Lewis documented the creation of credit default swaps, which are essentially insurance policies that traders could take out as a bet against sub-prime mortgages failing. Even today, it recently came to light that Citigroup, who is loaning money to Greece during it's financial crisis, has taken out huge credit default swaps, betting against the country's ability to repay its debt.
Take a look at the piece below:
He laments on his research that his biggest fear would be that people look at those who instigated the collapse as merely criminals, instead insisting that it was really mass delusion which led to the current state of events. It was short term gain which deluded everyone, minus the few who figured it out before it happened, and I fully believe that such mass delusions overshadow other aspects of civilization, including our insatiable appetite to buy stuff at the behest of marketers, only to throw whatever it was away and begin the cycle all over again.
Lewis documented the creation of credit default swaps, which are essentially insurance policies that traders could take out as a bet against sub-prime mortgages failing. Even today, it recently came to light that Citigroup, who is loaning money to Greece during it's financial crisis, has taken out huge credit default swaps, betting against the country's ability to repay its debt.
Take a look at the piece below:
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