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Debunking Michael Lewis’ Subprime Short Hagiography

1 pointsby dsplittgerberabout 15 years ago

1 comment

dsplittgerberabout 15 years ago
I don't get two parts of Smith's debunking. If someone could explain that to me, I'd greatly appreciate it!<p>- The 'long side' at the time and with hindsight seemed so much larger; blaming the few (known) shorts who ultimately profited for enlarging the market seems counter-intuitive, to say the least. How could they have gone short on dozens of billions of synthetic products? Can anyone confirm her numbers?<p>- Also more philosophically, whose 'fault' is it to profit from madness? The one who recognized it and bet against it, thereby fueling the fire, or the one who invented madness in the first place? She seems to deem the shorts responsible for Wall Street's foolishness not being able to come up with liquidity fast enough and therefore going virtually bankrupt and needing a bail-out, which they undeservingly get. So why exactly does she consider the shorts responsible for Wall Street's failure in foresight/calculation?