Book review: All The Devils Are Here

All the Devils are Here. Authors: Bethany McLean and Joe Nocera
All the Devils are Here. Authors: Bethany McLean and Joe Nocera


Authors: Bethany McLean and Joe Nocera

Published by Portfolio (Penguin Aust)

RRP: $24.95

THE GLOBAL Financial Crisis did not start in 2007. In their detailed look at the origins of the GFC, McLean and Nocera trace its origins back to the early 1980s, with the creation and sale of the first mortgage backed securities.

The interaction between Wall Street, the US Government and US financial institutions is examined in detail, and the development of financial derivatives is explained in layman's terms. Far from reducing risk, the derivative explosion actually increased it, as the greed-driven mania for higher-yielding investments led the back-room boys to develop even more unintelligible and convoluted products.

Alongside this, the American dream of home ownership provided the fuel for the eventual firestorm. By making it possible (legally or otherwise) for families to purchase homes on which they could not afford to meet the repayments, and allowing these mortgages to be on-sold under the guise of AAA investments, the US Government was a participant (albeit unwilling) in the proceedings by not providing appropriate oversight to ensure their own laws were not being violated.

But it was the creation of derivatives based on other derivatives which turned the US financial system into a giant casino. Financial institutions had created such tight interconnections via their derivative books that a failure of any one of them had the ability to bring the world financial system to its knees. That is what we saw in September 2008.

Did the world learn anything from the GFC? The jury is still out, and the authors in their examination of Obama's 2010 financial reform bill give no definitive answer. In fact they sum it up in just two words: "Well, maybe."

We will have to wait and see.

Topics:  book review gfc

MISSING: Police appeal for help to locate three teens

Police are searching for information to find three missing children who are believed to be travelling on the North Coast.

Concerns held for welfare of missing children

New degree to help fight against floods

Effects of floods will be studied at Southern Cross Univeristy

University degree was threatened due to Federal Government changes

HEAT STRESS: Should work stop when the heat is on?

CFMEU campaigns for relief from heat

Local Partners

Stone the flamin’ crows: Home and Away actor's new project

HE’S played the iconic Alf Stewart for 30 years — but now, Home and Away’s Ray Meagher is working on a new project.

Audience member shocked penis puppeteer

Rich Binning and Barry Brisco from Puppetry of the Penis.

It takes a lot to shock Rich Binning who appears nude on stage

What’s the greatest 1980s movie ever?

That lift, featuring Patrick Swayze and Jennifer Grey, back when she had a normal nose.

From Dirty Dancing and Crocodile Dundee to Die Hard

Jennifer Lawrence flaunts her nudity on set

Actress Jennifer Lawrence attends the premiere of "Red Sparrow" at the Newseum on Thursday, Feb. 15, 2018, in Washington. (Photo by Brent N. Clarke/Invision/AP)Source:AP

Jennifer Lawrence so comfortable on Red Sparrow set, she went naked

Bardot’s biggest secrets finally revealed

L-R: Belinda Chapple, Tiffany Wood, Sally Polihronas, Sophie Monk and Katie Underwood made up Bardot.

Popstars girl group Bardot’s biggest secrets finally revealed

How three Aussie movie-makers lured Helen Mirren

Jason Clarke and Helen Mirren in a scene from the movie Winchester. Supplied by Studiocanal.

It took a lot of work for three Aussies to lure the Oscar winner

Roxy Jacenko: ‘I came over all hot’

Roxy Jacenko and Oliver Curtis have talked about their sex life since his prison release last year. Picture: Aaron Francis.

The pair gave revealing interview about their lives since his release