Liar's Poker was great, and I'm enjoying reading 'The Big Short' at the moment. Although I'm not sure that the guys making money from Credit Default Swap agree

Liar's Poker was great, and I'm enjoying reading 'The Big Short' at the moment. Although I'm not sure that the guys making money from Credit Default Swap agreements on CDOs are on morally safe ground, I disagree with Yves that Steve Eisman, Mike Burry et al were "the moving force behind otherwise inexplicable, superheated demand for the very worst sort of mortgages." Ultimately, irresponsible mortgage lending was the root cause of the crisis: it was a superheated supply scenario. It was only when the rate of defaults on home loans dramatically increased that the CDOs dropped in value, and the Credit Default Swaps could be redeemed. For example, in addition to the high number of defaults that occurred after an initial two year, fixed-interest period, (when the interest rate jumped in some cases from 6% to 12%) some of the loans even defaulted on their very first payment. Lewis makes the point in the book that the question is not "who defaults on their first loan repayment?", but rather "who lends to someone who can't even make a single repayment?" As for Magnetar being undocumented, Chicago Public Radio did a great podcast about it a couple weeks ago, which was where I got the recommendation for 'The Big Short'. It's well worth a listen: http://www.propublica.org/ion/podcast/item/bernstein-and-eisinger-on-the-magnetar-trade http://www.propublica.org/ion/podcast/item/bernstein-and-eis...