Michael Lewis (author)

"Incredibly, at this critical juncture in financial history, after which so much changed so quickly, the only constraint in the subprime mortgage market was a shortage of people willing to bet against it."

"Looking into it a bit, Jamie found that the model used by Wall Street to price LEAPs, the Black-Scholes option pricing model, made some strange assumptions."

"A credit default swap was confusing mainly because it wasnt really a swap at all. It was an insurance policy, typically on a corporate bond, with semiannual premium payments and a fixed term."

"The model used by Wall Street to price trillions of dollars worth of derivatives thought of the financial world as an orderly, continuous process. But the world was not continuous; it changed discontinuously, and often by accident."

"All that was clear that the profits to be had from smart people making complicated bets overwhelmed anything that could be had from servicing customers, or allocating capital to productive enterprise."

"I confess some part of me thought, If only Id stuck around, this is the sort of catastrophe I might have created."

"Ever since grade school, when his father had shown him the stock tables at the back of the newspaper and told him that the stock market was a crooked place and never to be trusted, let alone invested in, the subject had fascinated him."

"Id stumbled into a job at Salomon Brothers in 1985, and stumbled out, richer, in 1988, and even though I wrote a book about the experience, the whole thing still strikes me me as totally preposterous-which is one reason the money was so easy to walk away from."

"The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street it was a machine that turned lead into gold."

"A thought crossed his mind: How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans."

"Here was a strange but true fact: The closer you were to the market, the harder it was to perceive its folly."

"Even as late as the summer of 2006, as home prices began to fall, it took a certain kind of person to see the ugly facts and react to them-to discern, in the profile of the beautiful young lady, the face of an old witch."