Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation - Finance Book on Economic Collapse & Investment Mistakes for American Readers | Perfect for Stock Market Investors & Economics Students

This book is a really great starting place to begin to understand the financial cataclysm of 2008 that was so large that there don't even exist adjectives to span its enormity - words like "colossal", "monumental", "humongous", all seem too small or ordinary for this extraordinary financial castasrophe. Everyone should try to understand an event of this magnitude and for those like myself who are not finance professionals, this short (101 pages of surprisingly readable text) is a great place to start. Gross informs us at the outset that he set out to try to understand why "it suddenly became acceptable for the United States to start guzzling debt the way fraternity boys pound beers on spring break" and he mostly succeeds.It's all here: the steady loss of our manufacturing base to China, the rise of "cheap money" (loans at temptingly low interest rates), "securitization" (the packaging of high and low risk mortgage debt into "mortgage-backed securities"), Enron and Worldcom, the epidemic of sub-prime, risky home loans, the wanton use of debt as "leverage" to finance more and more absurd take-overs, soaring government debt levels fueled by the low cost of borrowing, and the addictive need for constantly rising values in all asset classes to prevent total collapse of over-leveraged hedge funds, private equity groups, and investment banks. Large investment banks inexplicably thought they could carry 30 dollars in debt for every dollar of capital. Sub-prime lenders offered no-down-payment home loans to borrowers with undocumentable income. Government regulators obligingly eased requirements for reserves in order to keep the party going.Faced with stagnating wages, average workers borrowed their way into affluence through refinancing mortgages and running up credit card balances until they could not longer safely get off the treadmill. Hungry for profits, the rest of the world joined in the frenzy and got burned as well. Gross gives the sense that the lethal overdose of borrowing was a juggernaut that no one individual or institution could control. In his somewhat underwhelming concluding chapter, Gross seems to think that the world financial crisis of 2008 is neither the first nor the last of an inevitable series of bubbles that inhere in free markets. He anticlimactically recommends we be "smarter" and more restrained in our investment choices.I learned many interesting specifics about the financial crisis of 2008, and overall, that it really was what most of us suspected it was: a lethal admixture of greed, narcissism, diabolical ingenuity, and lemming-like, imitative behavior on a grand scale. This is a great, painless introduction to a disturbing, complicated, important tale of capitalism gone wild.