Featuring an exclusive audio interview with Michael Lewis
When the crash of the U.S. stock market became public knowledge in the fall of 2008, it was already old news. The real crash, the silent crash, had taken place over the previous year, in bizarre feeder markets where the sun doesn’t shine, and the SEC doesn’t dare, or bother, to tread: the bond and real-estate derivative markets, where geeks invent impenetrable securities to profit from the misery of lower- and middle-class Americans who can’t pay their debts. The smart people who understood what was or might be happening were paralyzed by hope and fear; in any case, they weren’t talking.
The crucial question is this: Who understood the risk inherent in the assumption of ever-rising real-estate prices, a risk compounded daily by the creation of those arcane, artificial securities loosely based on piles of doubtful mortgages?
Michael Lewis turns the inquiry on its head to create a fresh, character-driven narrative brimming with indignation and dark humor, a fitting sequel to his number-one best-selling Liar’s Poker. "Who got it right?" he asks. Who saw the ever-rising real-estate market for the black hole it would become, and eventually made billions of dollars from that perception? And what qualities of character made those few persist when their peers and colleagues dismissed them as Chicken Littles?
Out of this handful of unlikely—really unlikely—heroes, Lewis fashions a story as compelling and unusual as any of his earlier best sellers, proving yet again that he is the finest and funniest chronicler of our times.
©2010 Michael Lewis (P)2010 Simon & Schuster
“No one writes with more narrative panache about money and finance than Mr. Lewis....[he] does a nimble job of using his subjects’ stories to explicate the greed, idiocies and hypocrisies of a system notably lacking in grown-up supervision....Writing in faintly Tom Wolfe-ian prose, Mr. Lewis does a colorful job of introducing the lay reader to the Darwinian world of the bond market.” (Michiko Kakutani - The New York Times)
“Superb: Michael Lewis doing what he does best, illuminating the idiocy, madness and greed of modern finance. . . . Lewis achieves what I previously imagined impossible: He makes subprime sexy all over again.” (Andrew Leonard - Salon.com)
"[Michael Lewis] is the finest storyteller of our generation.” (Malcolm Gladwell)
If you don't understand why we suffered the big collapse of financial markets, this will explain it. If you already know what CDSs and CDOs are, you'll still find this fascinating because it's a retelling from the ground by people who watched it happen and participated in it while it happened. Third, if you like to read Lewis, you won't be disappointed.
Michael Lewis has the gift of being able to explain the most complicated financial concepts in easy to understand language. He has done this in spades in describing the conplicated sub-prime morgage market and the complex financial instuments conceved of by the so called wizards of wall street. A must for any investor or anyone interested in investing. It reads like a mystery thriller.
As someone who worked rather extensively on financial regulatory policy during and immediately after the financial crisis, I thought I understood quite a bit about factors contributing to the sub-prime bubble and about structured finance generally. But it was not until I read this book that I really grasped the full extent to which most of the "masters of the universe" on Wall Street had no idea what the f--k their banks and funds were doing in the frenzy of securitization and greed in the years preceding the financial crisis.
For anyone who wants to understand exactly how we went from a booming bull market in 2006 to near economic and financial collapse in 2008, this is the book to read.
Michael Lewis at his incisive best.
The mechanics of mortgage "tranching," and the extent to which so many Wall Street firms were genuinely blindsided when the monster they conceived, nurtured, and created, came calling for them. (I loved how Lewis correctly notes that it was Goldman Sachs who first recognized the nature of the systemic risk they did so much to create, and managed to profit from it...love them or hate them (and I put myself in the latter category), its uncanny how those guys are always a step ahead.
I read science, biographies, histories, mysteries, adventures, thrillers, educationals, linguistics but not no way, not no how, romances.
I've read Paul Krugman books, I've read about the collapse of Bear Stern, I've read Lewis' aftermath book, "Travels in the New Third World" and they've been amazing and enlightening, but never before has the structure of the financial collapse and its exact cause been so clearly delineated. This book doesn't dumb down, doesn't simplify, but tells a human and exciting story about a market gone completely mad and the few people who saw it coming. You'll learn about Wall Street, how it ticks and what happened between 2005 and 2008.
The narrator is spot on, the pacing is perfect, the information is incredible and understandable for someone without an economics background, the characters are well drawn and likeable, but more than anything this is a cracking good story of an imminent disaster and exactly what went wrong. Please, please read it!
mostly nonfiction listener
Now I finally understand the sub-prime mortgage meltdown. I mean, I understood that in general too many people took out mortgages they could not afford, and when housing prices stopped going up each year that many of these people could not refinance or sell and therefore could not pay their loans. What I did not understand, prior to reading The Big Short, was the credit default swap and how Wall Street and the big insurance companies got themselves in so much trouble that they needed to be bailed out. This is a fun book to read because Lewis is at the top of his game as a storyteller. In lesser hands, the people profiled in the book to advance the sub-prime meltdown narrative would not have been nearly as compelling.
With Lewis telling the tale, however, we learn about the antecedents of the great recession through the personalities of a marginalized and somewhat anti-social group of traders and analysts whose outsider status let them see what nobody else saw, and make millions in the process. This is really a story of how sometimes the outsider, willing to go against the conventional wisdom and the customs of the dominant elite, are able to over turn entire systems while shedding sunshine on uncomfortable realities. I'm going to make it a point to seek out the eccentrics in higher ed, and listen to what they have to say.
My first objective was to get more insight about the 2008 crash, which was accomplished very well. For my surprise it was in a very entertaining context, character dynamics, humor and structure are to be appraised as much as it's content.
Perhaps because I've read SO much good journalism about this and heard Michael Lewis speak on it so eloquently on radio & TV, the pace of this account was hard for me to get into. I found it slow, with explanations of default swaps and collateralized debt obligations and short sells that I've become bored of since the crash. I suspect the written book trumps the audio because you can skim dry economic explanations whereas the narrator has to plod through them slowly. You'll need to be willing to put in time and effort for this one. I'm not.
This is a great book, really well read.
Several years ago we refinanced our home and it stuck me how ridiculous it was that banks were just begging me to take a loan and no one was even checking if I had any income. Unfortunately, I did not have the foresite of some of the characters in this book, and they are truly characters. The basic tenet of the whole book comes down to that: if it seems to good to be true, it probably is, and just basic common sense indicated that the system was unsustainable. I just wish I had a background that would have allowed me to make billions off the same basic gut feeling the protagonists did.
If you want to read one book that makes you understand what this whole mess is about, and how greed led us into this mess, this is the book to read. It is a clear articulation of what the fundamentals the led to this economic crisis were mismanaged. I hope some senators read this.
Its also great insight into the human character. AS the author said on NPR, its amazing what one can overlook when you are being paid huge sums of money to overlook things.
It is also an interesting insight into human nature in that these "outsiders" who placed huge bets against the financial system and came up huge winners now all of a sudden are having trouble “trusting” their own thoughts/ideas, as they have become entrenched in their own thinking and sort of “insiders” now. It reflects that sometimes the most innovate freshest thoughts come from people who might be least expected to produce these insights.
This is the first Michael Lewis book i have read but from excerpts of other books this seems fairly consistent with his style. A great great fast entertaining but very insightful read. For the first time I felt like understood what the last few years have been about. If I could give it more than 5, I would.
If you read only one book about the causes of the recent financial crisis, let it be Michael Lewis' The Big Short. The thing that makes his story so great is that he tells it through the eyes of the 4 groups of men that had the courage to take a position that opposed the smartest men in the financial industry and, sad to say, our government. They were some of the first to see the fraud behind the subprime meltdown and found a way to make a fortune off the financial systems' crash.
Michael Lewis'; new book gives a slightly less complicated view into the disaster by recounting the stories of these savvy renegades who cashed in on their belief that the system was rotten. In doing so, we end up rooting for people who helped bring about the catastrophe that put a lot of good people out of work.
Still, the stories of these men make clear the greed, stupidity and double standards of a system lacking in grown-up supervision. A system, refueled by tax payer billions, that continues to be filled with the same firms, the same super rich executives, and the same destructive thought processes that disdained the need for government regulation in good times, but insisted on being rescued by government in bad times.
This is a fascinating book that should be read by anyone that wants to better understand the causes of the recent financial crisis. Be careful, as one reader put it, "Don't read this if you want to mellow out. This book will make you furious."
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