In this novel, it gives you a look into the stock market crash of 2008. The author examines the bond market, and how it moved into subprime mortgage bonds that ultimately led to the crash when the real estate market suddenly dropped in pricing nationwide. This book is written in a character-focused narrative, examining a group of individuals who saw the crash coming and decided either to keep quiet to protect potentially large investments or were too scared to speak up. In the book you hear about the 1980s and how Wall Street allowed a person to walk in off the street and become filthy rich by influencing and advising others how to invest. This shift led to interest in finding more alternative ways of investing and making money. During this shift, the creation of the mortgage bond was created. A bond that included, hundreds of mortgages that were offered to the general public. These bonds were easier to sell to investors, because they were divided into what was called tranches, or different levels. Given in this perfect world mortgages are not always paid off when expected, the tranches were broken into two different options, lower tranches and higher tranches. The lowest level would include the earliest pay-offs with a high interest, and the higher tranches would mature when expected and had a low interest. …show more content…
This was equivalent to an insurance against the default of mortgage bonds. If the borrowers of the bonds paid their mortgages as expected, the investor, would lose out on a return of cash. But, if the borrowers defaulted on their loans, the investor stood to gain a return from the initial