52 Weeks, 52 Books – Book 17

Today’s book is an interesting dive into the depths of human greed and just how far people will go to make money hand over fist. There are many books that could meet this definition, but Michael Lewis’ “The Big Short” does a fantastic job of explaining the subprime mortgage crisis of the late 2000’s.

The version I was reading was the 2015 movie tie-in edition, not the original 2011 book, so I don’t know if there were some changes in this edition or not. Either way, this book is a damning indictment of the “make money at all costs” ethos that drives poor decision making in many companies – and especially on wall street. The whole subprime mortgage industry was a massive scam, and one that preyed on some of the most vulnerable people in the US.

For those who didn’t follow it, essentially people were issued mortgages at “teaser” rates which were then increased to the point that people couldn’t pay their mortgages. This led to mortgage defaults, repossessions, and millions of people losing their homes…all so a few investors could make some money. The story of The Big Short is about the small number of people who recognized that the entire subprime industry was doomed to failure and bet against it from the start.

Those few people made massive amounts of money because they recognized that this entire industry was nothing more than piles of worthless paper. Banks were giving multiple large mortgages to people who were making minimum wage, sometimes as many as four or five to the same person.

As someone who is still renting as I approach the age of forty, I can understand the desperate need to buy a house that would drive people to accept mortgages that they may not be able to afford a few years down the road. We all want a place of our own, one where we can have an impact and effect on how we live and to be able to make a home, not just a place to live.

What I can’t understand is the ferocious need of some people to continue to profit off the backs of other people. Did nobody speak up about this unethical and immoral practice, or were they making too much money to care?

Fiscal inequality continues to grow in North America, the rich get richer, while the poor get a little bit. The dollar values in this book are beyond comprehension, particularly when you consider that billions of dollars (that’s NINE zeroes) was just wiped out because of greed. Instead of choosing the sustainable long-term growth plan, they gambled on major short-term gains and ended up losing billions of dollars and evicting millions of people.

I’m sure many of you are wondering why books like this make it onto my reading list, and the truth is that books like this remind me just how far we have to go in order to reach equality and resilience for everyone. A person’s resilience increases as they move higher on the scale of Social Determinants of Health. Housing is a key component of resilience, and for many people who got caught up in this, it put them back at zero again.

Before I get too far on my soapbox, I’m going to stop here…Read the book, and if you’re not as outraged as I am about how this could all happen, then stop and consider why I (and many others) are outraged about this type of thing.

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