Some books age badly. This one didn’t.
Janet M. Tavakoli wrote Structured Finance and Collateralized Debt Obligations in 2008 – the second edition – right as everything was falling apart. The subprime mortgage market had just imploded. CDO losses were spreading across the global financial system. Banks were writing down billions. And Tavakoli was sitting there going: “I told you so.”
All the math in the world does not help if the people using it are reckless, clueless, or dishonest. Chapter 44 is Wilmott’s tour through the greatest hits of derivatives disasters. These are not abstract case studies. Real people lost real billions, institutions collapsed, and careers ended. Some of these stories are tragic, some are farcical, and a few are both.
This is the final post in a 14-part series on Trading Economics: A Guide to Economic Statistics for Practitioners & Students by Trevor Williams and Victoria Turton (Wiley Finance, 2014, ISBN: 978-1-118-76641-5).