Whoops! by John Lanchester

Whoops! John LanchesterFor the last five years or so, the news has been full of complicated financial jargon which supposedly explains how the bankers managed to piss all our money away.  But what does it all actually mean?  Luckily, ‘Whoops! Why everyone owes everyone and no one can pay’ by John Lanchester helpfully explains the causes and consequences of the global financial crisis and is probably the only book you will ever need on the subject.

As a general rule, I try and keep my academic reading separate from my blog but I have made an exception with ‘Whoops!’.  In what can only be described as a moment of madness last summer, I opted to take a module about the financial crisis for my Master’s degree.  I figured at the time that it would be something a little different from my other classes which are mostly about foreign policy and that even if I ended up being an unemployed bum next year then at least I would be able to eloquently explain why the economy is screwed and why there are no jobs for shiny new graduates like myself.

So, since the middle of January, I have been trying to get my head around mysterious concepts such as equity, derivatives and credit default swaps.  I have learned a lot but most of the academic stuff is pretty dense and ‘Whoops!’ has helped me get to grips with some of the more obscure and complicated topics that I didn’t fully understand before.  It is very accessibly written but never patronising and Lanchester uses dry humour in his writing without trivialising the main subject at hand.  At just over 200 pages long, ‘Whoops!’ gives a reasonably thorough overview of the causes of the financial crisis – it’s not an entirely definitive piece of work but at least it is actually readable.  

Lanchester originally started researching the financial crisis as background for Capital which I read this year.  I wasn’t a massive fan of the novel but ‘Whoops!’ is definitely worth reading. In particular, I feel a lot more informed about how the banks managed to get away with their risky behaviour for so long as well as a few useful things about the way the housing market works.  I wish I had read this a little earlier in the semester but it is better late than never.

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One response to “Whoops! by John Lanchester

  1. John I’m on P132 of ‘Whoops!’. Risk……back in the mid 70s when I plugged records for EMI I attended two mid morning press screenings of the film ‘Jaws’. The second was in Southampton. Being an old fashioned cinema it had balcony seating and the 50 attendees clustered in its central seats. Midway through I left to feed my car meter. 5 minutes later on re-entering the vestibule I met the assistant manager who told me to leave as there was a bomb on the balcony and the manager was phoning the police now. This was a few days after the IRA bomb on the QEII in Southampton docks. I was turning on my heel when the assistant manager asked me what I had been up to. On being told, he asked if it was my black bag on the balcony. I replied it was my record bag. He told the manager to stop phoning the police.

    I returned to my seat. The film was still being shown. The risk the other 49 people took? They were no longer clustered in the middle of the balcony but had moved to seats at the sides. Obviously they thought it was a very small bomb – or just a very good film!

    15 years later I became an IFA. I was good and have in my time refused to arrange mortgages for those who I felt should not take the risk – but the above story does indicate how people can perceive risk!

    Finally there is little wrong with endowments per se – it is how they were sold and arranged that was the problem (and that included buyers insisting on lower premiums even though they knew that a higher interest rate would be required – whoops!).

    Good and informative book. Thanks!

    Like

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