I wanted to share you the interview with Michael Lewis the author of “The Big Short – Inside the Doomsday Machine”, its fascinating. John Stewart the host of the Daily show is hilarious but also has a good grip of current affairs, he also highlights the important aspects of Michael Lewis’ book. This video highlights the exact reason why you should only trust yourself when it comes to your investments. A handful of investors saw what was really happening. A quote from the interview is really compelling, Michal Lewis says;
“they [most of the Wall Street firms including AIG] figured out that there was an awful lot of money to be made from lending money to people who shouldn’t be lent money [sub-prime mortgages]; and when you do that you create lots of risk, the only way you can get that risk out there and get lots of people to take it is to disguise it. So they got really good at disguising the risk, they got so good they disguised it from themselves, they fooled themselves, it’s kinda like if you tell a lie often enough you start to believe it”, “it does not occur to anyone to say this is wrong we have to stop doing this”….”Lehman Brothers was cooking it’s books”
Need I say more. These risky sub prime investments were disguised as Triple A “AAA” rated investments. Unbelievable, but true.
Enjoy the video, skip forward to minute 14 in the video for the interview.
Click on picture to jump to the Daily Show Site.