Michael Osinski
Born1954
Mobile, Alabama
Occupation
  • Financial software programmer
, Oyster Farmer
Years active1980s–1990s

Michael Osinski (born 1954) is a former Wall Street computer programmer who developed a software that played a role in the subprime mortgage-fueled crisis from 2007 to 2009.[1] The software allowed the bundling of home mortgages into bonds, which precipitated the subprime loans collapse that sparked the global economic meltdown.[2]

Early life and career

Osinski was born in 1954 and grew up in Mobile, Alabama.[3] Prior to his work on Wall Street, Osinski was first involved in data entry.[4] He became a lead programmer for a telecommunications company in the early 1980s and oversaw a team that wrote a system for tracking daily sales.[5] However, he lost his job once the software became stable.

During the 1990s, Osinski worked for Lehman Brothers as a computer strategist.[6] He helped develop BondTalk, which is a language capable of modeling collateralized mortgage obligations.[5]

Financial crisis

The 2008 global financial crisis was caused by the crash in bonds associated with U.S. home loans,[7] which were bundled with other loans and packaged as safe investments.[8] This is referred to as mortgage securitization and was first introduced in 1983.[6] For the first time, however, a software was developed by Osinski—together with his wife Isabel[1]—that streamlined the process through the creation of an intricate network of bonds that are based on homeowners' payments.[6] This new system, a product of 13 years of development, spread on Wall Street and allowed the exploitation of the market and consumers.[6] First, the software became one of the tools used by banks and traders to obtain short-term gain but, later, these were used as "dangerous, volatile, mispriced financial weapons."[9] There was a significant increase in available mortgage credit due to subprime lending but problems (e.g. increased risk of foreclosure) emerged due to relaxed credit standards.[10]

Retirement and farming

At 45, when his software was sold, Osinski retired[11] and set up the Widow's Hole Oyster Farm.[12] He and his wife bought a Long Island waterfront property in 1999, which they used to cultivate oysters.[13] The Osinskis also actively campaign against the importation of oysters from Europe, citing its risk to the American shellfish industry.[14]

References

  1. 1 2 "How a piece of software helped fuel the 2008 financial crash". Marketplace. 2018-09-17. Retrieved 2019-06-12.
  2. ↑ Sherwell, Philip (2009-04-05). "Former Wall Street computer whizz Michael Osinski made the 'bomb' that broke the banks". ISSN 0307-1235. Retrieved 2019-06-12.
  3. ↑ Buford, Bill (2006-04-03). "On the Bay". ISSN 0028-792X. Retrieved 2019-06-20.
  4. ↑ "Oops: How Michael Osinski helped start the financial meltdown". Public Radio International. Retrieved 2019-06-19.
  5. 1 2 Osinski, Michael (2009-07-16). "Opinion | Steal This Code". The New York Times. ISSN 0362-4331. Retrieved 2019-06-12.
  6. 1 2 3 4 Grieves, Jim (2010). Organizational Change: Themes and Issues. Oxford: Oxford University Press. p. 200. ISBN 9780199214884.
  7. ↑ White, Lawrence; Cruise, Sinead (2019-05-28). "A decade after the crash, Barclays bets again on bundling U.S. home..." Reuters. Retrieved 2019-06-12.
  8. ↑ Phillips, Matt (2019-06-11). "Risky Borrowing Is Making a Comeback, but Banks Are on the Sideline". The New York Times. ISSN 0362-4331. Retrieved 2019-06-12.
  9. ↑ Balaam, David N.; Dillman, Bradford (2016). Introduction to International Political Economy, Sixth Edition. Oxon: Routledge. p. 190. ISBN 9780133402391.
  10. ↑ Investopedia. "What role did securitization play in the U.S. subprime mortgage crisis?". Investopedia. Retrieved 2019-06-12.
  11. ↑ "From Wall Street facilitator to humble oyster farmer - Macleans.ca". www.macleans.ca. Retrieved 2019-06-19.
  12. ↑ Klein, Joanna (2017-05-05). "Oysters, Despite What You've Heard, Are Always in Season". The New York Times. ISSN 0362-4331. Retrieved 2019-06-20.
  13. ↑ Besonen, Julie (2017-03-29). "All About Oysters in Greenport on Long Island". The New York Times. ISSN 0362-4331. Retrieved 2019-06-19.
  14. ↑ Osinski, Michael Osinski and Isabel. "Opinion | Keep Europe's Sick Shellfish Out of America". WSJ. Retrieved 2019-06-19.
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