Russell and Duenes

The Big Short: Evil Flourishes where there is Ambiguity

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Listening to The Big Short on audiobooks has the drawback of requiring me to go on my memory for any review I write (unless I can find an excerpt online, as I did below). That said, my memory is clear on one thing: When people on Wall Street don’t even know what they are buying, selling and betting on, you can be sure there’s going to be a lot of wickedness, ruin and misery coming down the pike. As Lewis weaves together his stories, he returns again and again to the fact that most of the people involved in the financial meltdown had  little or no idea what they were trading on. All sorts phony-baloney names we’re given to credit instruments and assessment tools that were total garbage, yet after awhile, people had no idea what they meant or what was in them. As Lewis writes,

The subprime-mortgage market had a special talent for obscuring what needed to be clarified. A bond backed entirely by subprime mortgages, for example, wasn’t called a subprime-mortgage bond. It was called an “A.B.S.,” or “asset-backed security.” If you asked Deutsche Bank exactly what assets secured an asset-backed security, you’d be handed lists of more acronyms—R.M.B.S., hels, helocs, Alt-A—along with categories of credit you did not know existed (“midprime”). R.M.B.S. stood for “residential-mortgage-backed security.” hel stood for “home-equity loan.” heloc stood for “home-equity line of credit.” Alt-A was just what they called crappy subprime-mortgage loans for which they hadn’t even bothered to acquire the proper documents—to, say, verify the borrower’s income. All of this could more clearly be called “subprime loans,” but the bond market wasn’t clear. “Midprime” was a kind of triumph of language over truth.

Investors were simply betting on the fact that something so big and so complicated couldn’t come crashing down all at once.  But the very ambiguity and foggyness of it all enabled people to buy, package and sell things, not really knowing or caring what was in them, and making a pile of money doing it. People can lie, cheat, steal, run ponzi schemes and ruin people’s lives all under the cover of darkness and ignorance. And none of it was regulated. Who can regulate what they don’t understand?

Make no mistake, all of this murkiness is Satanic. Satan loves to work in the dark, sowing his lies and destruction under the cover of fog. As Jesus himself said, “Light has come into the world, but people loved darkness rather than the light because their deeds were evil. For everyone who does wicked things hates the light and does not come to the light, lest his deeds be exposed.” That Lewis brings all of this to light is utterly jaw-dropping. And this is only one of the lessons to be learned from The Big Short.



Written by Michael Duenes

April 11, 2010 at 10:34 pm

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