The Big Short

One of the books I received this Christmas was Michael Lewis' book The Big Short.  I actually think this is one of the most important books of the last decade, and it was made into a movie.  Which, for a book about esoteric financial transactions, is pretty amazing.

The book does a great job describing what the hell happened in the 2008 financial crisis, better than anything else I have read or seen.  I'd really recommend seeing the movie or reading the book, but if you want my interpretation (which is like asking a child to describe the Mona Lisa), it's this:

We encouraged a bunch of people to buy houses they couldn't afford with financial gimmicks (subprime mortgages).  Then the banks repackages these as bonds, used tricks to make the bonds seem a lot more secure on paper than they actually were, and ended up being so leveraged that when the housing market collapsed, it took down a large number of banks.  

I'm still not sure what amount of this was criminal and what percentage was just blind stupidity.  I think it's mainly stupidity; the banks told themselves that the housing market never fell that badly, so they basically bet everything that it never would.  

I'm a capitalist by nature, and still reading about this both shocks and angers me.  Shocks me in that these banks could be so blind that they didn't realize what they were doing;  angers me in that I'm still not sure they learned their lesson.

RIP Neil Peart

Among the engineering students when I was at college, Rush was the band- the combination of Rock and Roll Sound with incredible lyrics and music that was so complex it was incredible that it only came from three band members.  If Rock's basic equation was "Three Chords and the Truth", Rush was the AP Calculus.

Neil Peart, the drummer, passed away from brain cancer at 67 today.  Besides being the drummer, he also wrote most of the lyrics.  Like the music, there was a depth to them that is astounding.  Just one example (from "The Pass", my favorite Rush song):

All of us get lost in the darkness

Dreamers learn to steer by the stars

All of us do time in the gutter

Dreamers turn to look at the cars

That struck a chord with me in a way most songs can't.

Rush was my favorite band, and I saw them several times.  They were so much more than that for my wife, who often credits the album "Presto" for saving her life during a down time.  We saw the band several times, and even briefly appear on their R40 DVD.

Thank you for sharing your gifts with the world, Mr. Peart.