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| | Location: Home » Real Estate » Economics » Financial Shock: A 360 Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis | December 1, 2008 |
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| Financial Shock: A 360 Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis | 
 enlarge | Author: Mark Zandi
Publisher: FT Press
Category: Book
List Price: $24.99
Buy New: $15.18
You Save: $9.81 (39%)
Buy New/Used from $14.39
Avg. Customer Rating:  (82 reviews)
Sales Rank: 10561
Languages: English (Original Language), English (Unknown), English (Published)
Media: Hardcover
Edition: 1
Number Of Items: 1
Pages: 288
Shipping Weight (lbs): 1.7
Dimensions (in): 9.1 x 6.1 x 0.9
ISBN: 0137142900
Dewey Decimal Number: 332.7220973
EAN: 9780137142903
ASIN: 0137142900
Publication Date: July 19, 2008
Availability: Usually ships in 1-2 business days
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| Editorial Reviews:
Product Description
"In Financial Shock, Mr. Zandi provides a concise and lucid account of the economic, political and regulatory forces behind this binge." --The Wall Street Journal "Aggressive builders, greedy lenders, optimistic home buyers: Zandi succinctly dissects the mortgage mess from start to (one hopes) finish." --U.S. News and World Report "If you wonder how it could be possible for a subprime mortgage loan to bring the global financial system and the U.S. economy to its knees, you should read this book. No one is better qualified to provide this insight and advice than Mark Zandi." -- Larry Kudlow, Host, CNBC's Kudlow & Company "Every once in a while a book comes along that's so important, it commands recognition. This is one of them. Zandi provides a rilliant blow-by-blow account of how greed, stupidity, and recklessness brought the first major economic crises of the 21st entury and the most serious since the Great Depression." --Bernard Baumohl,Managing Director, The Economic Outlook Group and best-selling author, The Secrets of Economic Indicators "Throughout the financial crisis Mark Zandi has played two important roles.He has insightfully analyzed its causes and thoughtfully recommended steps to alleviate it. This book continues those tasks and adds a third--providing a comprehensive and comprehensible explanation of the issues that is accessible to the general public and extremely useful to those who specialize in the area." --Barney Frank, Chairman, House Financial Services Committee The subprime crisis created a gigantic financial catastrophe. What happened? How did it happen? How can we prevent similar crises from happening again? Mark Zandi answers all these critical questions--systematically, carefully, and in plain English. Zandi begins with a fast-paced overview and then illuminates the deepest causes, from the psychology of homeownership to Alan Greenspan's missteps. You'll see the home "flippers" at work and the real estate agents who cheered them on. You'll learn how Internet technology and access to global capital transformed the mortgage industry, helping irresponsible lenders drive out good ones.Zandi demystifies the complex financial engineering that enabled lenders to hide deepening risks, shows how global investors eagerly bought in, and explains how flummoxed regulators failed to prevent disaster, despite crucial warning signs. Most important, Zandi offers indispensable advice for investors who must recognize emerging bubbles, policymakers who must improve oversight, and citizens who must survive whatever comes next. *Liar's loans, flippers, predatory lenders, delusional homebuilders How the housing market came unhinged, and the whirlwind came together*Alan Greenspan's trillion-dollar bet Betting on the boom, ignoring the bubble*The subprime market goes global Worldwide investors get a piece of the action--and reap the results*Wall Street's alchemists: conjuring up Frankenstein New financial instruments and their hidden contents*Back to the future: risk management for the 21st century Respecting the "animal spirits" that drive even the most sophisticated markets
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| Customer Reviews: Read 77 more reviews...
 Cogent Explanation November 20, 2008
This was a cogent explanation of the various factors that went into the ongoing subprime debacle. It struck a midpoint between a facile explication of the causes and more rigorous analytics for the quant-jocks.
I would have prefered more detail... but then again, I'm a bit of a quant jock.
 Excellent overview of how we got where we are November 20, 2008
Written so even someone as financially ignorant as myself gets a perspective on what happened in the global market. Talks about the incentives that led to the subprime crisis, the unregulated markets that allowed the derivatives trading that amplified the problem. Very timely and intriguing read.
 Get this book to understand out current financial problems !! November 20, 2008
This book is quite the eye opener !
It almost holds your hand--as it takes you step by step thru the maze of our current financial problems.
Perfectly laying out for the readers easy understanding--it shows you the whys..the hows...and some of the whos --that enabeled and/or caused the meltdown in stocks..bonds..sub prime loans and others types of loans and gaurantees as well.
I chose this book because I want to better understand what is really happening to our country right now and more importantly WHY !!!!!!!! This book has explained it to me clearly --in languge that I can understand --and most likely a high schooler...maybe even a smart Jr. High Schooler can understand. For this reason --I give this book a high mark.
If your looking to get a deeper understanding of whats going on in todays financial world...get this book !! You will not be disappointed !! .....and you will understand everything once you've read it through !!
Excellent, very readable primer to mortage backed securities and the mess they created; not enough for those previously educated November 20, 2008
This is a well written, very clear description of the house of cards that goes by the name of mortgage backed securities. As pretty much everyone now knows, it is the collapse of this market that precipitated the current stock market collapse. In this book, the author leads you by the hand and describes how the entire mess was created, specifically how the credit-worthiness of the borrower became disconnected from the market valuation of securities derived from that borrowing.
To anyone who has watched recent financial events unfold and asked "how did this happen?" this book is VERY highly recommended.
That said, I am more reserved with my praise if you are the type of person already familiar with things like derivatives and "liar loans," and who regularly reads, e.g. The Wall Street Journal. I am in that category, and while I still found this book interesting, I found myself more often saying "yes, obviously" than "wow, I didn't know that until now."
One other shortcoming of this book is that it really doesn't offer much meat to gnaw on with respect to 'how do we get ourselves out of the current mess?' That's not surprising, really as this book was written before the current melt down (although the timing of the release could not have been better) and because the answer to that question is one to which a consensus answer has not appeared even among the world's brightest and more learned minds.
Nonetheless, I would VERY strongly recommend this book to financial neophytes and those who simply weren't paying that much attention to the mortgage mess as it was unfolding.
Timely and Prescient November 13, 2008
Could this book be any more timely? Are you wondering how we landed in our current economic predicament? Are you reeling from your last 401(k) statement? This book, written and released prior to the complete meltdown of the equity and credit markets that unfolded in September 2008 ( and continue to), will help explain what led us here, and while the author does indicate his inclination to believe the worst was over (we now know he was wrong), he is also quite prescient as he points to certain steps (by both private and public entities) that must be taken to alleviate the current pain and get us out of this mess, and to address underlying systemic factors to prevent its recurrence. His recommendations look remarkably similar to the actual action plans unfolding in Congress and the Treasury Dept in October/November 2008.
But here is the magic of this book, the author very clearly explains the direct and indirect connections between the inability of a homeowner in Anytown, USA to make his/her mortgage payments, and the subsequent meltdown of the mortgage market, and the resulting impact on the credit markets. Mark Zandi explains the intricate, overlapping role of all of the players here, the homebuyer, the banks, the mortgage brokers, the flippers and speculators, and the creative (i.e., greedy) investment bankers, but he spreads the blame around.
The best thing about this book is that the reader does not need to have a degree in economics to understand the basics of a very complicated industry and how its sophisticated (nontransparent) security manufacturing "creativity" led to a global recession. If you want to understand how big investment banks (Lehman, Bear Stearns) and several other financial institutions (Washington Mutual, Wachovia, etc.) could fail in such spectacular fashion, this book gives you the foundation. On the other hand, there is enough intelligent discussion and cogent explanation here to keep the more sophisticated reader engaged and walking away with a greater understanding of the beginning of the events in the sub-prime mortgage market that continue to unfold across the economy.
I would expect that the author is probably already at work on another chapter addressing market events in the fall of 2008, the government takeover of Freddie Mac and Fannie Mae, TARP and the bailout in general. Stay tuned for an updated edition.
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