As recommended by various people, I read “Whoops!: Why Everyone Owes Everyone And No One Can Pay” by John Lanchester this month. As I borrowed it from the library, that’s another step closer to my library book-reading goal!


I’d say it was probably the most fascinating non-fiction book I’ve read in a long, long time!

It basically describes and explains how the global economy was brought to the edge of destruction in 2008. Ooh, those naughty banks!

Where was I in 2008?

Well, this was the year I sold the house that I owned with my ex and I finally paid off my credit card debts so I was in a good place financially – finally! The proceeds of the sale were left sitting in a high interest bank account (yes, they existed back then!) and I had virtually no investments whatsoever (I say virtually as I discovered years later that I had a small holding in an investment trust!).

Whilst I do remember the global economy collapsing and the hysteria in the news, I didn’t really understand why or how it happened, except that the banks were largely to blame. How so? Something or other to do with ‘sub-prime’ mortgages but to tell you the truth, I wasn’t really that interested at the time.

I also naively didn’t think the financial crash would affect me since I had no investments (that I knew of) that were affected by the plummet in the stock market…until my job became ‘at risk’ and Old Co axed around 120 people in one go and had to be bailed out by Warren Buffet. Those days at work weren’t great…

Years later, I would still feel the aftereffects of the crash, with regulatory overkill forming a huge part of my working life and environment – audits upon audits!

So what’s in the Book?

The book is easy to read as it assumes you know nothing so explains lots of things in a clear, uncomplicated way; things which my eyes probably glossed over when I saw them in newspapers back in 2008.

I also found it pretty scary – scary at how the banks were so powerful that they pretty much made up their own rules and when even those rules didn’t suit them, they just bent them and nobody stopped them.  Regulators were just regulators in name only – they were next to useless against the almighty banks.

People think pay day loans are bad but they’re nothing compared to the mortgages that were handed out almost like candy to people known to have patchy credit history. It wasn’t just the value of the mortgages, it was the sheer number of mortgages that were handed as it was so easy for anyone to get a loan.

For example:

‘Stated income’ loans were where the borrower just stated what their income was and the lender took their word for it…yes, really!

‘Ninja loans’ –  where people who had ‘No Income, No Jobs or Assets’ were able to borrow a pile of money…

It really sounds made up and unbelievable but the scary truth is that this all happened, though not in some corrupt third world country – it happened in the rich western countries and nearly destroyed the global economy.

So, who or what was to blame?

Greed, stupidity, Governments or Banks?

Probably all of the above.

Have lessons been learnt?

Well the book was written six years ago and there’s still the ticking time bomb of Deutsche Bank (still the most dangerous bank in the world?) to name but one.

Only time will tell before the next financial crisis happens due to some new loophole that will get exploited, though of course, actual Brexit and the result of the US elections could cause some disruption.

Anyway, a highly recommended read.

17 thoughts on “Whoops!

  1. Sounds like one for the reading list, sounds very interesting whilst perhaps making your blood boil from time to time!

    I like this kind of stuff, reality is often far more shocking than fiction isn’t it?! (Ninja loans not heard of that before!!)

    Hopefully we’ve learnt some lessons but memories can be very short with us human lot haha.

    • I think because reality is often far more shocking than fiction, that’s probably why I read (and enjoy) fiction more because I know it’s not real!

  2. I remember it well – both the Ninja, and I knew them as “Liar Loans” – people just stated a number so they could get the loan. My thoughts (having not yet read the book!) was that it was basically Greed – on everyones part. I remember seeing a story about a US Firefighter who had just lost his home. I initially felt very sorry for him, given his line of work, until they dug into the numbers. My memory is a little fuzzy on the exact numbers now, but it was something like a $400,000 loan, and he earnt about $30,000 – his monthly income either only just covered, or didnt quite cover the mortgage. How could not only the bank lend to them, but how did the individual think it was a good idea?!
    Given the recent return of 100% mortgages and others, I think it will happen again in the pursuit of money and profit, lets see…!
    London Rob

    • I agree, London Rob, greed definitely played a big part and with the return of 100% mortgages, there will still be greedy banks and stupid people who will cause the next crisis!

      • In the Netherlands it is still common to borrow 102% of the value of your house (to cover some taxes and additional costs). I guess you can argue if this makes sense, but I think the loan percentage is just one part of the puzzle. You are now obliged to fully pay off the whole loan in 30 years and there are strict rules about loan to income values (including checks on debt and other loans). But still, I was shocked as well to see what my girlfriend and I are able to loan with our normal salaries. Pretty scary…

        • Hi Berry
          Wow, I thought 100% was insane! It is scary and yet seems like normal! In the Netherlands are the 30 year loans fixed?

          • That’s up to the yourself; one can choose a floating interest rate or fix it for any period of time (1, 2, 5, 10, 20 30 years), Most common is fixing the interest rate for 10 years.

            A lot of new rules (restrictions) have been put in place after the financial crisis, but going through the process of buying a new house myself at the moment, one can see that banks still have waaaay to much freedom to fill you up with loans.

            You still need to have insights in your own finances to make a decent decision in this,

  3. Hi,
    I’ve only recently started reading your blog and am finding it a really inspiring read. I’m on a similar path myself.
    The Big Short by Michael Lewis follows a similar line in explaining what happened, but focuses on a few investors who saw what was happening and bet against the housing market. The film was pretty good too!

    • Hi David
      Thanks for reading and stopping by.
      I’ve watched ‘The Big Short’ film and enjoyed it – it didn’t seem so scary as it was focused on the US, even though obviously, the whole mess was happening in the UK too. The book is on my to-read list.
      Good luck with your financial path!

  4. Thanks for the review Weenie, it definitely sounds like a book I’d like to read, and The Big Short too for that matter.

    How are you getting on with your book reading goals for the year?

    My goal was to read 6 books this year (to out this in context I read pretty much nothing for the preceding two years!), and I’m currently at 4.5! Hopefully I’ll get more read on my upcoming holiday…


    • Hey OR
      I’ve been cracking on with my reading and am sort of confident that I’ll hit both goals – although need to squeeze that last finance one in sooner rather than later!

      Good luck with your reading and hope you enjoy your holiday!

  5. I’ve had a couple of people recommend this book to me. It will deffo go on the the reading list now.

    Like a few of the earlier comments, I would recommend the big short to you as well!

    • Hi MGUK
      The ‘Big Short’ will have to be on next year’s reading list for me I think! It will be interesting to see how close the film was to the book.

  6. hi, good review. I read this when it first came out and it made my blood boil. It’s still shocking to think of the damage done by a relatively small number of people and most of them were never called to account over their reckless actions. We the people just rolled over and basically accepted it.

    • Hi John
      Know what you mean about making your blood boil – parts of it were so unbelievable yet the horrifying thing was that it happened!

      And yes, truly annoying about the people never called to account but we will see this over and over again unfortunately.

  7. I haven’t read this one yet. Thanks for the recommendation and overview. I read Michael Lewis’ The Big Short but sounds like this book as some additional information that I should check out. Thanks for sharing!!!

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