I am reading the 2008 book by Charles Morris, “The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash.”
He is publishing in February 2009 a revised paperback edition called “The Two Trillion Dollar Meltdown.”
I can’t wait.
Here he is quoted in a Dec. 17 article by Bloomberg: “You’re up to $1 trillion now and this is still going to run for some time,” said Charles R. Morris, a former banker and software company executive whose book “The Trillion Dollar Meltdown” was published in March. In Sept. 2007 “the first back-of-the-envelope calculation I did came up with $1.1 trillion and this was using really low-default estimates.”
I have to admit serious eye glazing problems with all the CDO’s, CMO’s, CBO’s and CLO’s peppering the pages of this slim but comprehensive look at the nation’s shaky economy. A persistent reader should be able to make sense of all the C -Words (for Collateralized) Morris, a lawyer, former banker and financial journalist, throws at us, because he explains them in clear, non-technical language, without a lot of math.
It’s been a long time coming, this reckless financial environment of subprime mortgages, the worst foreclosure crisis in decades, massive job losses, talk by Barack Obama and Hillary Clinton alike about opting out of NAFTA or modifying it, high energy prices — the whole Perfect Storm, to use a cliche, that afflicts the American economy.
Add to this war in Iraq and Afghanistan that costs billions of dollars with no end game in sight — a war that already has cost more than World War II — and Morris’s view that the restructuring needed will be at least as painful as the “difficult period of 1979-1983.”
It will be far worse than the Stock Market crash of 1987, Morris argues. Stick with the author as he describes the arcane financial instruments, the chicanery, the policy misjudgments, the dogmas and the delusions that have created the greatest credit bubble in world history.