The Big Short by Michael Lewis

Must reading for anyone who cares about the economy, maldestribution of wealth or financial crime in the banking industry. Never mind too big to fail, it's too big to prosecute.

This is about the subprime mortgage scam with an inside look at the greed, the criminal intent and the out of control monstrosity that it created. With the colorful characters, only a handful, who figured it out, this book weaves a tale that in its telling gives some understanding of the Ponzi scheme cooked up by Wall Street banks, too complex to understand, too complex to prosecute.

Michael tells his own tale of disallusionment along with the protagonists who see the certain end point of the Ponzi with disbelief attempting to inform federal prosecutors, SEC, Standard & Poors and Moody's but to no avail while themselves attempting to grasp the opportunity of shorting the subprime pyramid. The story is humerous while at the same time tragic; it gives for once an understanding of the obscene leverage in things like collateralized debt obligations, CDOs, Tranches and credit default swaps.

Lewis exonerates the home owner as victimized by the recruiting practices of the carnavail like mortgage sales organizations. These nieve buyers were manipulated into a mortgage with no down payment, interest only with the option of deferred interest on a variable rate interest arm. There was more which Lewis describes.

What the book does not tell is the number of homeless in the US today, 3.4 million, a number exceeded by the number of empty foreclosed houses. Think what would have happened if the government had supported the real victims of the subprime mortgage fiasco instead of the banks. When the mortgage packages fell to zero value, the mortgages should have been voided. 

Voiding the, what were actually criminal mortgages, would have transferred the ill gotten wealth of the banking industry back into the hands of lower middle class Americans with a boost to the economy; it would have resulted in a complete restructuring of the banking industry, which is desperately needed and shift wealth from the nonproductive hedge fund back out into the economy, the middle class, where it would contribute to jobs and the GDP.