The Big Short, or big shock

I just finished the The Big Short by Michael Lewis (of the Liar's Poker  fame). He seemed to paint a picture that because the top guys at the top wall street firms didn't know what they were doing (or what their traders were doing, or what exactly were those alphabetical soups financial vehicles, or understand how to manage risk etc) that cause the subprime crisis. 

I enjoyed reading the story (or stories) told in the book and treat them as folklores. But I disagree with his conclusion. I would just give one example LTCM (When Genius Failed). LTCM people were top guys, they had Nobel prize winners, they had super models, they were partners, and they certainly have their own money in the game yet LTCM failed spectacularly. 

Financial crisises were just financial markets' own making that was inevitable, given the financial market's logic, in the sense that you could possibly create a computer program to model the financial markets and given a initial push, the model would create all these financial crisises we been through: the internet bubble, the subprime bubble, the saving and loan crisis.

Could peer pressure play a role as well, in witness of all the major wall street firms double downed on the subprime markets almost at the same time?

In hindsight everything looks so obvious, clear, and easy. Michel Burry's investors, even with his clear explanation,  all tried to get out his fund which almost killed his CDS trades.  He was lucky that he found some bylaw in his fund contract to allow him to side pocketed his trades thus prevent his investor from pulling money out. Julian Robertson wasn't so lucky with his Tiger Fund in the earlier of 2000 decade.

Anyway, Big Short was a good reading, and gave you one angle of the story that is still unfolding before us. We don't know yet when we will come out of it.