My guest this week is Danny Moses, who was directly in the middle of the biggest trades in market history, chronicled by Michael Lewis in his book the Big Short. Danny was the head trader on the Frontpoint team led by Steve Eisman, which was one of a small group of firms that figured out, in real time, the dire situation with mortgage-backed securities during the financial crisis, and how to build a portfolio to bet against the U.S. housing market. We cover his part in the Big Short story, but also lots of other interesting ground, including the state of sell-side research and financial markets. I love conversations with traders because they live and breathe market risk. You’ll be able to see why quickly in this great conversation with Danny Moses.

The Big Short

Danny Moses

Books Referenced

Flash Boys: A Wall Street Revolt

When Genius Failed: The Rise and Fall of Long-Term Capital Management

Open: An Autobiography

Show Notes

2:57 – (first question) –  The four traits that would give someone the best odds to succeed as an analyst

7:40 – Danny’s take on his role during the financial crises, which was highlighted in ‘The Big Short.’

14:47 – Looking at the first moment that there was something wrong but that there was a way to trade against it during the crisis

17:13 – Exploring the moment when Danny had to reconcile an amazing trade against a dangerous scenario for the US economy

 

22:19 – Danny recounts working with Michael Lewis

24:16 – Flash Boys: A Wall Street Revolt

24:40 – Going back to the auto lending crisis in the 1990’s

28:22 – The evolution of the sell side, what’s good about it today and what was bad about in the early 2000’s.

 

48:11 – When Genius Failed: The Rise and Fall of Long-Term Capital Management

 

1:01:02 – Open: An Autobiography

 

Learn More

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Article by The Investors’ Field Of Guide