Retelling Diary of a Very Bad Year - What Happens When Wall Street Falls Apart

I just finished reading one of the most interesting books about the 2008 financial crisis. And I want to walk you through it.

The book is called Diary of a Very Bad Year: Confessions of an Anonymous Hedge Fund Manager. It’s published by Harper Perennial (ISBN: 978-0061965548). And it’s not like any other finance book you’ve read.

What makes this book different

Most books about the 2008 crash are written by journalists or academics looking back at what happened. This one is different. It’s a series of real interviews with an actual hedge fund manager, done in real time as the crisis was happening. From September 2007 to the summer of 2009.

The interviewer is Keith Gessen, a writer from the literary magazine n+1. He’s not a finance guy. He doesn’t know what a credit default swap is. And that’s exactly what makes these interviews so good. He asks the questions a normal person would ask. And the hedge fund manager (they call him HFM) explains things in a way that actually makes sense.

What I’m going to cover

I’m breaking the book down chapter by chapter. There are nine chapters plus an introduction and epilogue, organized into three parts:

Part 1 - Before the Collapse

• Chapter I: When Subprime Was Just a Weird Word
• Chapter II: Bear Stearns Goes Down
• Chapter III: Right Before Everything Broke

Part 2 - The Collapse

• Chapter IV: How Bad Is It Really
• Chapter V: End of Year, End of an Era

Part 3 - Aftermath

• Chapter VI: Everyone Gets Angry
• Chapter VII: Picking Up the Pieces
• Chapter VIII: Time to Step Back
• Chapter IX: The End and Part 2

Plus a wrap-up post with the epilogue where I share my final thoughts.

Why you should care

Even if you were too young to remember 2008, the effects of that crisis shaped the world you live in now. Student loan policies, housing prices, the way banks work, income inequality. All of it traces back to what happened during those two years.

And HFM doesn’t sugarcoat it. He talks about what went wrong, who messed up, and what he himself got wrong. It’s honest in a way that most finance people never are.

How I’m writing this

I’m retelling each chapter in my own words. Not copying the book, but breaking down the key ideas and conversations so you can get the gist without reading 300 pages of financial interviews. Think of it as a reading companion.

If something interests you, grab the book. It’s worth it.

Let’s get started. First up is the Introduction by Keith Gessen where he explains how these interviews came to be.