BOOK REVIEW

Book Review: whoops! why everybody owes everyone and no one can pay by John Lanchester

Book Review: whoops! why everybody owes everyone and no one can pay by John Lanchester

Introduction

The book whoops! Why everybody owes everyone and no one can pay written by the John Lanchester, a popular British novelist and journalist, in the year 2010. The book also published outside the U.K. with the title “I.O.U.: Why Everyone Owes Everyone and No One Can Pay”. John Lanchester born and raised in the Hong Kong. Though he is not an economist and banker, he has wonderfully explains this complex subject in an understandable way. The book of 240 pages is the general explanation of global financial crises in year 2007-2010. John Lanchester in the fundamental sense attempts to explain the recent financial crisis following the credit crunch in the perspective of four interlinked phenomena (climate, problem, mistake and failure). The climate explained in the perspective of post cold war of capitalism, which leads to the problem of easy availability of mortgages by the financial institutions in the U.K and U.S (Lanchester, 2010, pp. 5). The mistake phenomenon explained by referring the usage of problematic model of risk that been used throughout banking and financial industry, while the failure phenomenon represents the facts of failures of financial regulators in mitigating the global financial crises. Through the well-cultivated and reasoned arguments, Lanchester shows the actual picture of the state of UK's economy by explaining these four phenomena with economics and sociological approaches (Lanchester, 2010, pp. 25).

The purpose of this book is to highlight that an industry that can make any product ranges from personal cares, home appliances, books and anything that we use today has the single most eminent purpose to make money out of it (Allfree, 2010, http://www.metro.co.uk/). The bottom line that followed by the business houses, especially from the last three decades is to follow such practices that can increase their profits. Their motto is to earn profit even from the healthcare and education sectors that considered as non-profit. The author explains the fact that, financial institutions' failure of miscalculating the risks that they were deriving from the usage of certain mathematical models was the actual reason that leads to the strengthening of the credit crises. The approach of author suggests that those mathematical models based on the historical data of prices and they were not taking account of the basic human reactions.

The book starts by explaining the various financial instruments that exist in the UK financial market. The author explains the financial instruments in the elementary sense which is often obscure and jargon for readers and which is difficult to understand. Further, the new financial products that exist in the market along with changes in the risk patterns in the financial market is also very well structured by the author. The book also explains the culture of finance and relationship between financial institutions and governments in the normal way (Williams, 2011, http://makewealthhistory.org). The book explains the reader, why he owes ...