While the Great Recession finally appears to be relaxing its grip, it’ll still be a long time before most of us understand why our economy collapsed – comprehending the financial world in general is a heady undertaking for those of us not perpetually immersed in it.
Diary of a Very Bad Year attempts to bridge the knowledge gap, with moderate success. Composed almost entirely of interview transcripts between Gessen and an anonymous hedge-fund manager (dubbed HFM), the book offers some insight into the financial world before, during and after the meltdown. Gessen clearly regards HFM’s opinions highly – at one point mentioning the ‘tireless magnificence’ of his recession tour-guide – and his primary role here seems to be to smile and nod along.
HFM might not be quite as flawless as Gessen supposes, but he does a good job of teaching the reader how mortgage-backed paper, money-market funds and credit-default swaps work, while offering up juicier tidbits about the ethics and legalities of his sector. Where HFM is lacking is in the seamless ease with which the best teachers impart knowledge, instead delivering his lessons more like textbook chapters: chew on them long enough and they become digestible.
The book seems best suited as a companion to more direct accounts of the catastrophe, since it requires one eye on the page and the other on the computer, Googling terms like ‘commercial paper’. As with hedge funds themselves, the book serves as a middleman of sorts, between readers and coldly factual accounts of the debacle. It may seem extraneous at first, but once you’re involved it yields an awful lot.