Western Civ A Brief History of Financial Bubbles
Dec 21, 2025
In this engaging discussion, Aman Verjee, a seasoned lawyer and economist with a background at Lehman Brothers and PayPal, delves into financial bubbles. He highlights the warning signs before the 2008 crisis and critiques government policies that exacerbated subprime lending. Verjee examines historical bubbles, including the tulip mania and the tech boom, arguing that some, like the dotcom bubble, ultimately spurred innovation. The conversation turns to AI, assessing its potential and drawing parallels with past telecom bubbles, while advocating for a proactive approach to education and job displacement.
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Front-Row View From Lehman To PayPal
- Aman Verjee recounts working at Lehman Brothers in the late 1990s and later at PayPal and eBay, giving him front-row insight into market cycles.
- He used trading-desk experience and back-channel contacts to track developments leading up to 2008.
Early Warning Signals In CDO Spreads
- Aman spotted credit risk signs in 2006 by watching CDO spreads on securitized real estate bonds before the public panic in 2007.
- His fixed-income background let him see the crisis about a year earlier than most.
Well-Intentioned Policy Fueled Subprime Growth
- Policy to push Fannie and Freddie into low-income lending expanded gradually from 1992 and amplified risk across administrations.
- That regulatory nudging unintentionally fueled a huge expansion of subprime lending and systemic risk.