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F.I.A.S.C.O.: Blood in the Water on Wall Street

by Frank Partnoy (1998)

Quick summary -- an in-depth PhD-level extended summary (10-30 pages) for this book is coming soon.

Frank Partnoy Explains Wall Street's Meltdown

Published in The Advocate (USD School of Law Magazine)

Quick Summary

This PDF is a University of San Diego School of Law alumni magazine (The Advocate, Spring 2009) featuring Professor Frank Partnoy's analysis of the Wall Street meltdown. It is not a standalone book but rather a magazine article explaining how complex derivatives and structured products nearly collapsed the financial system.

Executive Summary

This publication is the Spring 2009 issue of The Advocate, the alumni magazine of the University of San Diego School of Law. The featured article profiles Professor Frank Partnoy's analysis of how Wall Street's use of increasingly complex derivatives -- particularly credit default swaps, collateralized debt obligations, and other structured products -- led to the 2008 financial crisis. Partnoy, a former Morgan Stanley derivatives salesman and author of "F.I.A.S.C.O.," brings firsthand expertise to his analysis.

Key Concepts

  1. Derivatives Complexity -- How increasingly opaque financial instruments obscured risk.
  2. Regulatory Failure -- How regulators failed to understand or constrain derivative markets.
  3. Moral Hazard -- How the separation of risk from reward incentivized reckless behavior.

Conclusion

While not a full book, this magazine article provides a concise expert analysis of the derivative instruments and regulatory failures that caused the 2008 financial crisis, from the perspective of a former Wall Street insider turned academic.