Last night, I finished The Big Short: Inside the Doomsday Machine, by Michael Lewis. I consider myself to be a pretty intelligent, educated person, and it bothered me when I had no idea how $1.3 trillion essentially vanished overnight. Granted, I hadn't really looked into the subject, but I'd hear about subprime mortgages, CDOs, and credit default swaps and wonder what the hell people were talking about.
Michael Lewis goes to great lengths to explain how the financial crisis occurred and expose the greed, stupidity, and magical thinking that allowed it to happen. Interestingly, he does it from the perspective of the small number of people who actually made millions from the subprime mortgage collapse. This makes the story incredibly entertaining, allowing you to learn a lot about what happened without falling asleep while reading it. It's a very different approach, but one that I appreciated. Through his character-driven account of the financial collapse, I finally began to understand what the hell happened to all that money.
So if you've been wondering what made all of those financial institutions drop like flies, give this book a shot. It's a relatively quick read (266 pages) and well worth the time and effort. It really made me wonder if I would have seen the problem coming had I been in their shoes. I'd like to think that I'd have at least been cautious of it, but then again, who knows.
Some googling led me to Investopedia, which has a free stock trade simulator to let you try your hand at investing without actually losing (or gaining, unfortunately) any money. That website only lets you trade stocks (not mortgage bonds, CDOs, CDSs, etc. as in The Big Short), but it lets you put your money where your mouth is if you've ever thought you could make money investing if you actually had money to invest. I haven't really done anything with my account yet, but maybe I will after this month, and my 1st year of medical school, is over.