The Big Short
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Add a SummaryAs author of books like *The Blind Side* and *Moneyball*, Michael Lewis is no stranger to success as a nonfiction writer. He has a talent for covering stories in ways that play up their humanity, giving niche topics like economics and sports a universal appeal. But despite his knack for reading and reflecting public sentiment, even he couldn't have foreseen the push his latest effort, *The Big Short*, would receive from the zeitgeist. *The Big Short* takes readers on a thrilling, fast-paced and sometimes baffling ride through the swell and burst of the subprime mortgage bubble. He's already written one book exposing the inner workings of Wall Street – *Liar's Poker* covered the greed, incompetence and corruption that ran rampant in the big firms of the 1980s - so when he tackled his second Wall Street opus, he was uniquely positioned to understand the complicated market machinery and labyrinthine logic driving the subprime mortgage crisis and triggering The Great Recession.<br /> Sure, it's a bit of dense information and economic terminology, but he delivers it quickly; and given that some of the brightest minds on Wall Street couldn't make sense of the complicated mess surrounding subprime mortgages, readers should forgive themselves if they get a little lost in the details. At any rate, he works these technicalities into the story well enough that they don't break the narrative’s momentum.<br /> Lewis also introduces readers to the real people making the trades, swaps and bets that left nations teetering. He takes us into the lives of those who inflated the value of investment portfolios containing subprime mortgages and disguised their risk, as well as those who discovered the risk and bet against them. Spoiler alert: the ratings agencies (like Moody's and S&P) *do not* come off at all well. Moving chronologically from the early 2000s, his prose builds a mix of disbelief, dread and outrage as events race toward the conclusions with which we're all now too familiar. Characters in the real-life drama range from iconoclastic to downright devious and smarmy, and the tale of how they manufactured investments that looked to be made of gold from groups of losing loans is riveting and angering to say the least. Even more interesting are the stories of those who identified the problem, bet against the subprime mortgages, and tried to warn others. For readers itching to know more about the events feeding the rage driving the Occupy protests, there is probably no more absorbing, enraging crash course available than Lewis' *The Big Short*.
Quotes
Add a QuoteUp to that point, Hubler’s bet had been “stress tested” for scenarios in which subprime pools experienced losses of 6 percent, the highest losses from recent history. Now Hubler’s traders were asked to imagine what would become of their bet if losses reached 10 percent. The demand came directly from Morgan Stanley’s chief risk officer, Tom Daula, and Hubler and his traders were angered and disturbed that he would issue it. “It was more than a little weird,” says one of them. “There was a lot of angst about it. It was sort of viewed as, These folks don’t know what they’re talking about. If losses go to ten percent there will be, like, a million homeless people.” (Losses in the pools Hubler’s group had bet on would eventually reach 40 percent.) As a senior Morgan Stanley executive outside Hubler’s group put it, “They didn’t want to show you the results. They kept saying, That state of the world can’t happen.”
Institutional investors didn’t know what to make of him, at least not at first. “I think he has some kind of narcissistic personality disorder,” said one money manager who heard Lippmann’s pitch but did not do his trade. “He scared the shit out of us,” said another. “He comes in and describes this brilliant trade. It makes total sense. To us the risk was, we do it, it works, then what? How do we get out? He controls the market; he may be the only one we can sell to. And he says, ‘You have no way out of this swimming pool but through me, and when you ask for the towel I’m going to rip your eyeballs out.’ He actually said that, that he was going to rip our eyeballs out. The guy was totally transparent.”
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Add a CommentMichael Lewis is always good on this subject. I think this was his first economic study. He has a wonderufl sense of humour and tells the layman what it's all about succintly and entertainingly.
Michael Lewis is a consistently good author. Any of his books are a good read. An excellent description of how the 2008 meltdown occurred. Makes you wonder at the influence Wall St has over politicians that they continue to remain basically unregulated.
Good read if you really want to know what caused the financial meltdown. Basically, everyone is greedy and horribly selfish. I found it to be somewhat repetitive and borin gin some parts, but overall was a good read.
So that is what all the subprime mortgage problems were about. A readable, understandable guide to complicated finance made easier and extremely interesting. Michael Lewis' careful detailing of events in the early part of the century, on Wall Street and in the USA generally, is fascinating. Super read.
As author of books like *The Blind Side* and *Moneyball*, Michael Lewis is no stranger to success as a nonfiction writer. He has a talent for covering stories in ways that play up their humanity, giving niche topics like economics and sports a universal appeal. But despite his knack for reading and reflecting public sentiment, even he couldn't have foreseen the push his latest effort, *The Big Short*, would receive from the zeitgeist. *The Big Short* takes readers on a thrilling, fast-paced and sometimes baffling ride through the swell and burst of the subprime mortgage bubble. He's already written one book exposing the inner workings of Wall Street – *Liar's Poker* covered the greed, incompetence and corruption that ran rampant in the big firms of the 1980s - so when he tackled his second Wall Street opus, he was uniquely positioned to understand the complicated market machinery and labyrinthine logic driving the subprime mortgage crisis and triggering The Great Recession.<br /> Sure, it's a bit of dense information and economic terminology, but he delivers it quickly; and given that some of the brightest minds on Wall Street couldn't make sense of the complicated mess surrounding subprime mortgages, readers should forgive themselves if they get a little lost in the details. At any rate, he works these technicalities into the story well enough that they don't break the narrative’s momentum.<br /> Lewis also introduces readers to the real people making the trades, swaps and bets that left nations teetering. He takes us into the lives of those who inflated the value of investment portfolios containing subprime mortgages and disguised their risk, as well as those who discovered the risk and bet against them. Spoiler alert: the ratings agencies (like Moody's and S&P) *do not* come off at all well. Moving chronologically from the early 2000s, his prose builds a mix of disbelief, dread and outrage as events race toward the conclusions with which we're all now too familiar. Characters in the real-life drama range from iconoclastic to downright devious and smarmy, and the tale of how they manufactured investments that looked to be made of gold from groups of losing loans is riveting and angering to say the least. Even more interesting are the stories of those who identified the problem, bet against the subprime mortgages, and tried to warn others. For readers itching to know more about the events feeding the rage driving the Occupy protests, there is probably no more absorbing, enraging crash course available than Lewis' *The Big Short*.
This is one of the best books out there on the sub-prime residential mortgage crisis that brought down the economy in 2008. It also covers the investors who saw the collapse coming and bet against the market using derivatives. Lewis gives a detailed account that is IMO entertaining and informative.
It was interesting at first, but became REALLY repetitive (i can't count how many times the author pointed out that people were blind not to see this coming...). It also wasn't in as plain language as I expected and I found it rather boring in parts (mostly because of the repetitiveness).
This is an amazing book, about people who saw the meltdown coming and did something about it. Not a pretty sight! The author understands his material and tells his story well. As the phrase goes, I couldn't put it down. Wall Street will never look the same to me.
I love Michael Lewis. Ever since "Liar's Poker" I have read most of what he has written. Other financial writers might be able to claim more "rigor", but I rarely get through more than the first forty pages of their books. Lewis has not disappointed here. He cleverly uses the stories of several flesh and blood individuals to create a narrative structure that painlessly and entertainingly propels you through the book. He doesn't make things so simple and reductive that they are virtually false, yet never loses my attention. I'm glad he chose to get rich writing good books and articles instead of by being a Wall Street player.
Explains the most significant and appalling financial debacle in nearly a century in terms that even theamazingsteverino (no financial wizard, he) could understand.