The Trillion Dollar Meltdown (Charles R. Morris, 2008)

[X.]

The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash
(Charles R. Morris, 2008)
Amazon.com link

I've just begun reading this book. It takes you from the 60s to present time, explaining how we (mainly, US) got ourselves into this disastrous situation. Topics covered include abusive lending and hedge fund secrecy. And, best thing, the book is easy for a layperson (interested in economics) to understand.

I'll post back once I've finished it. Would love for others here to get their hands on it too, so we can discuss the things contained within it, and improve our collective knowledge.

[fizz]

How do books about current situations get written so quick? Was this all planned?

[shariqq]

What's a Hedge Fund? I've heard of that term often enough now... (Didn't wanna wiki it)

[kaytee]

How do books about current situations get written so quick? Was this all planned?

I was thinking of the same thing.

What's a Hedge Fund? I've heard of that term often enough now... (Didn't wanna wiki it)

Hedge Fund is similar to a Mutual Fund, but it is more of a high risk and doesnt involve stocks. They concentrate a lot on leveraging, short positions in futures and forward contracts, options and swaps of any commodity, currency etc.

For Example - If I purchase shares on NYMEX using US $, I would be exposed to exchange-rate risk (if i was not in Dubai coz of the peg) while holding that stock. To hedge this risk, I could purchase currency futures to lock in an exchange rate for the future stock sale and currency conversion.

So Hedge funds is a collection of all these people who want to cover their risk. Basically it is for people who have a lot of money. I think there is a minimum amount of dough you need to enter hedge funds.

That is the best I can do

[shariqq]

Ok, that did make sense. Thanks!

[shariqq]

...just checked. The book was released on 3^rd March '08, before the uninformed world realized it was happening.

[fizz]

...just checked. The book was released on 3^rd March '08, before the uninformed world realized it was happening.

Ah...that explains.

Also, to add to the lovely summary Kaytee has provided, hedging as a pinciple can be applied in various methods. Emirates Airlines for e.g. has hedged the purchased of fuel for the next few years so that both changes in currency and the even fluctuating rates of oil does not hurt them for the short to medium term.

I wish it was possible to hedge payments for rents. This way, you could sort of pay in advance for the next 5 years. This way, with that payment locked (or sunk), you would at least know that you don't have to worry about increases for sometime and you could focus the additional income (if any) on lucrative investments