F.I.A.S.C.O.- Why History Repeats?
Updated: Nov 20, 2019
Fiasco: The Inside Story of a Wall Street Trader by Frank Partnoy
Root cause for the NEXT upcoming Global Financial Crisis (probably 2020-23) is something obscurely named CLO, which stands for Collateralized Loan Obligation.
What is surprising is that the root cause for the last Global Financial Crisis (2008-12) was due to CDO, which stands for Collateralized Debt Obligation.
Still more surprising is that in the mid-90s, the Asian economies underwent a financial meltdown and again somewhere hidden in the financial jargons that were blamed for the crisis, we find a mention of CMO, which stands for Collateralized Mortgage Obligation.
Well, different names but same result. What is happening?
The Book F.I.A.S.C.O. is an inside account by one of the experts of financial derivatives which highlights how greed always overtake human reasoning. The book tells the journey of the evolution of financial derivatives in the initial years (1990s) and how those derivatives most often than not had led to great financial losses, most of which were never leaked in the public.
Warren Buffett has rightly stated that, ‘financial derivatives are weapons of mass destruction.’ The proof is out there (CMO, CDO). More proof coming soon (CLO)!
This book is an essential read for anyone who is serious about their financial well-being.