

Debunking Michael Lewis’ Subprime Short Hagiography - dsplittgerber
http://www.nakedcapitalism.com/2010/03/debunking-michael-lewis-subprime-short-hagiography.html

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dsplittgerber
I don't get two parts of Smith's debunking. If someone could explain that to
me, I'd greatly appreciate it!

\- The 'long side' at the time and with hindsight seemed so much larger;
blaming the few (known) shorts who ultimately profited for enlarging the
market seems counter-intuitive, to say the least. How could they have gone
short on dozens of billions of synthetic products? Can anyone confirm her
numbers?

\- Also more philosophically, whose 'fault' is it to profit from madness? The
one who recognized it and bet against it, thereby fueling the fire, or the one
who invented madness in the first place? She seems to deem the shorts
responsible for Wall Street's foolishness not being able to come up with
liquidity fast enough and therefore going virtually bankrupt and needing a
bail-out, which they undeservingly get. So why exactly does she consider the
shorts responsible for Wall Street's failure in foresight/calculation?

