Friday, May 14, 2010

Sex, Drugs and CDOs

This book is a novelization of the events surrounding the credit crisis, as viewed by a junior banker on the rise. In addition to simple introductions to securitization, CDOs, CDS, SIVs, etc. (including figures that might have been drawn on Cristal-stained cocktail napkins) there is plenty of insight into the psychology of bankers and the sometimes tawdry client-banker relationship on the sell side. Amazon: US edition , UK edition (more reviews).

Readers unfamiliar with Wall Street and The City may find the various banker shenanigans depicted surprising. Yes, client meetings really do happen at strip clubs and in the presence of call girls. But the more substantive point that readers should note is just how intense the demand was for CDO products. There are many scenes in the book in which the protagonist's main problem is dealing with incensed clients whose orders for CDO allocations have not been filled due to excess demand. As we heap blame on CDO issuers we might think a bit about the buyers of the securities and why they were so stupid.

The author, Tetsuya Ishikawa, was educated at Eton and Oxford and worked at several major banks including Goldman, where he was peripherally involved in the Abacus deal. For more, including video interviews, see his blog.


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steve hsu said...

Thanks, it's fixed now! It's strange that I wrote Harrow as when I first learned about Ishikawa I marveled that he had attended Eton. "On the playing fields of Eton... the credit crisis was born"?

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