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Pages:
4 pages/≈1100 words
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Level:
MLA
Subject:
Business & Marketing
Type:
Essay
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English (U.S.)
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Topic:

Business and Marketing: The Big Short (Essay Sample)

Instructions:
The critical book review on The Big Short, by Michael Lewis should be 5-7 pages long. The answers to the questions should only come from this book.   This is what should be covered: What role/part do the characters in the book play in the financial crisis? Do the events that occurred support or refute the efficient markets hypothesis?  Support your answer. There has been a tremendous amount of regulatory reform.  With this in mind, is it possible for Wall Street to change?  Why or why not? source..
Content:
Business and Marketing: The Big Short
The Big Short written by Michael Lewis is an interesting and informative book that describes how greedy managers caused the worst financial crisis in the world. It is held that ventures inside the mortgage meltdown, casting characters involved in capitalism at the tipping point affected financial institutions and individuals around the world. It is certain that some people perceive themselves to be smart, but put them together to discover that they are a bunch of small minds who only think about themselves, (Lewis 2011: 6). The characters in this book made tremendous financial gains at the expense of others, (Lewis 2011: 21). Lewis tells us that these characters knew that the market crash was eminent and decided to use this knowledge to profit themselves immensely. It is estimated that the bad securities were used to destroy more than $1trillion dollars, (Lewis 2011: 15).This paper seeks to discuss how the characters in the Big Short contributed to the worst financial crisis, determining how the events that occurred refuted the market efficiency, and finding out if it is possible for Wall Street to change given the tremendous amount of regulatory reforms put forward by the government.
There are many characters in the book; but this paper will look at the following individuals and how they participate in the ultimate financial meltdown: Steve Eisman, Dr. Michael Burry, Greg Lippmann, Howie Hobler, Wing Chau, Joel Graanblatt, John Paulson, and John Gutfreund. We shall look at each individual independently.
John Gutfreund is depicted in the book as the source of all that happened at Wall Street leading to its crumbling. He was the head of Salmon Brothers which is described as a predatory firm as it principally traded in fixed-income trading vehicles. For instance, it publicly traded complex mortgage instruments despite it’s know how about the distorted pay issues, (Lewis 2011: 33).
John Paulson; the Hedge Fund Manager; the author tells us that he made $3.7 billion in 2007 describing it as the biggest trade ever. In this regard, Paulson helped Goldman select mortgage for synthetic CDOs and thereafter he cunningly turned against the firm by suing them to the Current Securities a...
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