I’ve just finished reading John Lanchester’s account of the credit crunch, the excellently titled “Whoops!”. I’m not particularly up to date with finance, banking or economics but I now understand a lot more about what has happened, why it happened, and why it’ll probably happen again. (In the epilogue, Lanchester sticks his neck out and makes a prediction: within the next 5-10 years, due to either a collapse of the eurozone, automated trading failure, or a bubble bursting in China.)
I really enjoyed reading Whoops! and now understand a bit more about sub-prime, credit default swaps, and international banking reguations. The real genius of the book, for me, is not just the in-depth understanding he manages to convey but also the wonderfully erudite style. There aren’t that many writers who can compare global financial instruments to post-modernism and get way with it. The way he manages to get across the kinds of risk – and the kinds of models of risk – that the banking industry deal with is also remarkably clear. It’s also laugh-out-loud funny in places, particularly if you like that dry, sarcastic humour he does so well. A top book; if you’d like to get a handle on what’s happened, I can’t recommend it enough.Here’s an amazon link, it’s got 4.5 stars there too, so I’m not the only one who likes it.