Whoops!: Why Everyone Owes Everyone And No One Can Pay (2010) - Plot & Excerpts
as an economic graduate I expect to understand everything in this book, but maybe I set my bar too high because some part feels like rocket science. this book is brilliant but i'm too lazy to write a proper review, so here's a few interesting notes from the book:p. 118...a part of my brain follows the explanation. but a larger part is still left reeling with incredulity at the idea that anyone could be so clever/stupid as to believe that human fallibility could be engineered into nonexistence.p. 123credit ratings are all about history. and if you don't have much credit, your credit history can look sketchy: it's not unknown for people in impeccable financial condition to have poor credit ratings because they don't have enough history of debt. welcome to bizzaroworld!p. 155(quoting Nassim Taleb) "you're worse off relying on misleading information than on not having any information at all. if you give a pilot an altimeter that is sometimes defective he will crash the plane. give him nothing and he will look out the window. technology is only safe if it is flawless."p. 179the power to set interest rates had been something of a Holy Grail for those economists who argued that the management of inflation was too important a matter to be left to politicians... another way of thinking of them is in terms of whom they directly benefit and whom they directly punish.p. 217the economic metaphor came to be applied to every aspect of modern life, especially the areas in which simply it didn't belong. in field such as education, equality of opportunity, health care, employees' rights, the social contract, and culture, the first conversation to happen should be about values and principles; then you have the conversation about costs and what you as society can afford. Informative account of how the financial world works, providing an insight into derivatives, securitization, credit default swaps and other peculiarities. It all boils down to a few simple things that I feel we should already know, and probably need to be reminded of frequently:1. Don't lend money to someone who can't afford to pay it back2. Don't borrow money if you can't afford to pay it back3. Don't create a system in which the lender (through securitization) no longer cares if the borrower can't pay it back4. Don't continue to believe your mathematical model if it tells you that three of the things that happened last week were all impossible5. If you're a government, don't deregulate the financial sector just because the financial sector says it's a good ideaThe book is brief and breezy, and I did occasionally laugh out loud.
What do You think about Whoops!: Why Everyone Owes Everyone And No One Can Pay (2010)?
Excellent. Lanchester does a really good job explaining economic phenomena in laymen terms.
—aleinad
