Copyright American Library Association, used with permission.
Morris (former lawyer, banker, and author of numerous books) bases the title of this timely volume on his estimate of the write-down in asset values produced by the current credit crisis. His trillion-dollar estimate does not include possible defaults in other areas such as credit card debt and monoline insurers who write insurance protecting purchasers against principal losses on securities. Nor does it include less easily quantifiable losses from dollar devaluation resulting from the loss of confidence in the US economy and the exposure of domestic assets to foreign purchase at bargain rates. In addition to learning about the market mechanisms and practices that led to the financial chaos, readers will be treated to clear, concise explanations of such instruments as collateralized debt obligations, calls, puts, derivatives, and a host of other recently developed financial exotica. Federal Reserve actions and semiprivate institutions such as the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) are criticized for having privatized enormous profits while socializing losses at taxpayer expense. Morris concludes with recommendations to stabilize and restore confidence in US financial markets. See related, Robert Shiller's The Subprime Solution (CH, Dec'08, 46-2206). Summing Up: Recommended. General readers; upper-division undergraduate students through professionals. E. L. Whalen formerly, Clarke College