The Big Short. Summary[edit] The Big Short describes several of the key players in the creation of the credit default swap market that sought to bet against the collateralized debt obligation (CDO) bubble and thus ended up profiting from the financial crisis of 2007–2010. The book also highlights the eccentric nature of the type of person who bets against the market or goes against the grain.
The work follows people who believed the bubble was going to burst, like Meredith Whitney, who predicted the demise of Citigroup and Bear Stearns; Steve Eisman, an outspoken hedge fund manager; Greg Lippmann, a Deutsche Bank trader; Eugene Xu, a quantitative analyst who created the first CDO market by matching buyers and sellers; the founders of Cornwall Capital, who started a hedge fund in their garage with $110,000 and built it into $120 million when the market crashed; and Dr.
Michael Burry, an ex-neurologist who created Scion Capital despite suffering from blindness in one eye and Asperger's syndrome.[1] John Gutfreund. John H. Gutfreund (born September 1929)[1] is an American businessman and investor. He is the former CEO of Salomon Brothers Inc, an investment bank that gained notoriety in the 1980s.
Gutfreund turned Salomon Brothers from a private partnership into a publicly traded corporation [2] which started a trend in Wall Street for investment companies to go public.[3] He became the icon for the excess that defined the 1980s culture in America. In 1985, Business Week gave him the nickname "King of Wall Street". Early life and education[edit] Gutfreund grew up in a Jewish family[4] in Scarsdale, a suburb of New York City. Career[edit] After several months, he became a clerk in the municipal bond department eventually becoming a trader. When Gutfreund was CEO of Salomon Brothers, a major scandal took place regarding the way Treasury bond trading was done by Salomon Brothers.
Since January 2002, Gutfreund has been Senior Managing Director and Executive Committee Member of the investment bank C.E. Financial crisis of 2007–2008. The TED spread (in red) increased significantly during the financial crisis, reflecting an increase in perceived credit risk. The financial crisis of 2007–2008, also known as the Global Financial Crisis and 2008 financial crisis, is considered by many economists the worst financial crisis since the Great Depression of the 1930s.[1] It resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment.
In the immediate aftermath of the financial crisis palliative fiscal and monetary policies were adopted to lessen the shock to the economy.[19] In July 2010, the Dodd–Frank regulatory reforms were enacted in the U.S. to lessen the chance of a recurrence.[20] Background[edit] Share in GDP of U.S. financial sector since 1860[27] The U.S. Subprime lending[edit] 2007–2012 global economic crisis. This article is about the global economic downturn during the early 21st century. For background on financial market events dating from 2007, see financial crisis of 2007–08. The Great Recession is a term used to describe the general economic decline observed in world markets around the end of the first decade of the 21st century.
The exact scale and timing of the recession is debated and varied from country to country.[1][2] In terms of overall impact, the IMF concluded that it was the worst global recession since World War II.[3][4] The recession is often associated with the U.S. subprime mortgage crisis and financial crisis of 2007–08. Terminology[edit] Overview[edit] According the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the US recession began in December 2007 and ended in June 2009, and thus extended over 18 months.[20][21] Causes[edit] The great asset bubble:[33]1. Panel reports[edit] The majority report of the U.S. Narratives[edit] Citigroup. Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group in October 1998 (announced on April 7, 1998).[3][4][5] The year 2012 marked Citi's 200th anniversary.
It is currently the third largest bank holding company in the United States by assets. Its largest shareholders include funds from the Middle East and Singapore.[6] Citigroup has the world's largest financial services network, spanning 140 countries with approximately 16,000 offices worldwide. It also holds over 200 million customer accounts in more than 140 countries. History[edit] The Citigroup logo, 1999–2007, 2012–present The Citigroup logo, 2007–2011 Citicorp[edit] City Bank of New York was chartered by New York State on June 16, 1812, with $2 million of capital. In 1976, under the leadership of CEO Walter B. Salomon Brothers. This article deals with Salomon Brothers.
For other uses of the name Salomon, see Salomon. Salomon Brothers was a Wall Street investment bank, known as a bulge bracket company. Founded in 1910 by three brothers (Arthur, Herbert and Percy) along with a clerk named Ben Levy, it remained a partnership until the early 1980s, when it was acquired by the commodity trading firm Phibro Corporation and then became Salomon Inc. [2][3] Eventually Salomon (NYSE:SB) was acquired by Travelers Group in 1998, and following the latter's merger with Citicorp that same year, Salomon became part of Citigroup. Although the Salomon name carried on as Salomon Smith Barney, which were the investment banking operations of Citigroup, the name was ultimately abandoned in October 2003 after a series of financial scandals that tarnished the bank's reputation.[4] Early history[edit] Salomon Brothers & Hutzler logo c.1922 In this period the firm used its own capital and did not have fee-paying clients.
In 1991, U.S.