Boomerang

Jul 18, 2012 Will Byrnes rated it 4 of 5 stars

Shelves: economics

UPDATED - July 18, 2012 - at bottom

Checking in with the whiz kids who predicted the Wall Street crash that he wrote about in The Big Short, his excellent look at the latest Wall Street meltdown, Michael Lewis finds that the next big bust will be on the nation-state scale. His construct for analyzing how nations deal with the economic environment of the 21st century is to imagine each of these countries in a dark room in which piles of money were dumped, the easy credit available in the first chu...more

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Nov 02, 2011 Scott rated it 2 of 5 stars · review of another edition

Shelves: 2010s, money

Lewis’s Boomerang (2011) is a slick read that coasts on its author’s reputation for writing well about others fiscal knavery and financial stupidity. I usually don’t pick up a book if the author’s name on the cover is twice the size of the book’s title, especially when that title is anything but fresh and intriguing (How many gazillion books are named Boomerang? Do a Goodreads book search and marvel at the results.); but this one came to me on loan from a neighbor who heard I liked to read (bles...more Lewis’s Boomerang (2011) is a slick read that coasts on its author’s reputation for writing well about others fiscal knavery and financial stupidity. I usually don’t pick up a book if the author’s name on the cover is twice the size of the book’s title, especially when that title is anything but fresh and intriguing (How many gazillion books are named Boomerang? Do a Goodreads book search and marvel at the results.); but this one came to me on loan from a neighbor who heard I liked to read (bless his heart), and I felt obligated to look through it. What I found was a fast, entertaining romp through post-bubble Europe ... part travelogue, part chamber of horrors ... that to my surprise, took pride of place among a tall stack of ghoulish Halloween reads teetering on my nightstand.

Lewis’s latest book is a cartoonish discussion of what happens to a society after it has been presented with almost unlimited credit, as many Western countries were between 2002 and 2008. Last Spring Lewis visited some of the Eurozone’s fringe states (Iceland, Ireland, Greece) who drank far too deeply from the proffered cup and now are tottering on the edge of insolvency. The result of his journey, this snarky read, is sort of a Ripley’s Believe It or Not! of economic and social shortcomings. The book isn’t long on explanations, and Lewis’s caricatures and stereotypes of supposed national traits are crafted to shock and offend in a way that has become fashionable with modern broadcast journalism. Look to be entertained first and enlightened only by accident.

Its anecdotal explanations aren’t limited to little countries in Europe, though. The final chapter hints at what may be about to happen to several cities in the United State which have been squeezed nearly out of existence by the same forces that have bankrupted parts of the Old World. Like most good journalism, Lewis’s book is illustrated with intriguing trivia that at least flirts with logic ... and scatalogic. Parts of the book are distasteful, but there are enough bizarre figures and non sequiturs to satisfy most readers’ appetite for the absurd. My favorite tidbit?

A color-coded map of American personal indebtedness could be laid on top of the Centers for Disease Control’s color-coded map that illustrates the fantastic rise in rates of obesity across the United States since 1985 without disturbing the general pattern.

If you take a big swig of the Daily Show along with your viewing of the Nightly Business Report, you'll love Boomerang.(less)

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Oct 29, 2011 Brent rated it 2 of 5 stars

Shelves: hmmm, business

As a huge Michael Lewis fan, I was a bit disappointed by this book. The concept was neat, but the lack of an overall narrative and the length of the five stories made them somewhat shallow. Even the best of the bunch (the US) won't tell you anything you don't already know.

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Nov 17, 2011 Nick rated it 4 of 5 stars · review of another edition

I'm loving this. Taken in tandem with Lewis's previous book, The Big Short, it's a hilarious and terrifying explanation of the present financial crisis (ruination, collapse, armageddon?)

I was chatting to a couple of people the other day who really know finance and suchlike, and they objected that Lewis doesn't get everything right. I can't say whether that's a question of fact or a matter of nuance and opinion. What I can say is that a) nothing he writes clashes with my experience or understandi...more

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Nov 29, 2011 Mark Rice rated it 5 of 5 stars

In 2004, Wall Street's largest investment banks brought about the beginning of a worldwide financial downturn by creating the credit default swap on the subprime mortgage bond. The events that followed have been widely reported. Once-wealthy nations such as Greece, Ireland, Iceland and Germany accrued gargantuan debts, causing governments, banks and other companies to crumble. In 'Boomerang', Michael Lewis explains the details of how and why this happened, visiting the worst-affected countries a...more In 2004, Wall Street's largest investment banks brought about the beginning of a worldwide financial downturn by creating the credit default swap on the subprime mortgage bond. The events that followed have been widely reported. Once-wealthy nations such as Greece, Ireland, Iceland and Germany accrued gargantuan debts, causing governments, banks and other companies to crumble. In 'Boomerang', Michael Lewis explains the details of how and why this happened, visiting the worst-affected countries and speaking with key players from both sides of the fence (those whose actions caused the damage, and those whose predictions - if taken seriously - could have prevented it). Lewis's snappy prose and incisive wit make this an enjoyable reading experience as well as an educational one.

In an amusing aside that could be viewed as a prophetic metaphor for Iceland's approaching financial meltdown, Lewis reveals that Alcoa, the biggest aluminium company in Iceland, encountered a problem unique to their nation when, in 2004, it set about erecting a giant smelting plant. Iceland's folklore is so all-pervasive that many Icelanders believe in 'hidden people', or, in other words, elves. Before Alcoa could build a smelter, it had to pay a government expert to examine the enclosed plant site and certify that no elves were on or under it. One Alcoa spokesman told Lewis that it had been a delicate corporate situation, as the company had been forced to pay hard cash to declare the site elf-free, but, as he put it, "we couldn't as a company be in a position of acknowledging the existence of hidden people."

Lewis cites a 2001 paper called 'Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment', published by MIT Quarterly Journal of Economics, which found that men trade more often than women, and from a position of worse judgement. The study found that single men trade more recklessly than married men, who in turn trade more irresponsibly than single women. The weaker the female presence, the less rational the approach to financial-market trading. One of the characteristics common to both Iceland's financial collapse and Wall Street's is the absence of women (only one woman occupied a senior position in an Icelandic bank), who weren't given risk-taking jobs. Interestingly, only one woman had a senior position in Icelandic banking in 2005. The woman in question, Kristin Pétursdóttir, quit her job in 2006 to set up a financial-services business run entirely by women, as she didn't like the reckless way men were running Icelandic banks. Her business is now one of very few profitable financial businesses in Iceland. An old man turned up at Pétursdóttir's door one morning with his life savings and the proclamation, "I'm so fed up with this whole system. I just want some women to take care of my money." (Please note that this approach is not foolproof - I once tried it with my wife and she spent the lot on cars, designer handbags and shoes. She's now my ex-wife, for obvious reasons!)

Greece's financial downfall was unique in that it was caused by bankers behaving ethically: they did not buy US subprime-backed bonds nor did they irredeemably leverage their assets or pay themselves inordinate sums of money. The Greek bankers made one fatal mistake: they lent 30 billion euros to the Greek government, where it was stolen or squandered. Michael Lewis points out that, "In Greece the banks didn't sink the country. The country sank the banks." (This reaffirms the increasingly popular belief that entrusting one's money to bankers or politicians is unwise...a bit like entrusting one's budgie to a hungry cat.) Unpaid taxes were another main contributor to Greece's financial troubles. No one has ever been punished in Greece for not paying taxes, which is seen as an option rather than a responsibility.

Ireland's post-millennial boom in property development led to debts that were unsalvageable. The Irish banks - most notably Anglo Irish Bank - lent billions of euros to property developers whose construction activities ran amok, despite there being no influx of buyers for these new properties, until the developers were broke and the banks went bust.

Germany's financial problems resulted from trying to bail out European countries which were in deep financial trouble. In doing so, they behaved in a way that was uncharacteristically unGerman (putting other nations' financial wellbeing before their own). Germany was dragged into financial descent, its downward spiral inextricably linked to the economic fate of the countries that simply couldn't afford to pay back the billions of euros they had borrowed from the Germans.

One factor was common to the worst-affected countries (United States, Greece, Ireland, Iceland and Germany): an insistence on burying their heads in the sand and repeatedly proclaiming that all was well, even though their financial foundations were sinking into oblivion. In each case, the dissenting voices of a few shrewd observers were hushed or ridiculed, granting the countries a short-term facade of financial wellness, but making them look foolish, conceited and financially immature when the truth finally came out and the brown stuff hit the fan.

'Boomerang' is an eye-opening book which gives the inside scoop on events that have been - for the most part - covered up. Lewis's world tour of financial destruction is an enlightening adventure for the reader. He tells his tale with a voice of wisdom, humour and humanity.

Well written, immaculately researched and told from a perspective of economic knowledge, 'Boomerang' is a must-read book. (less)

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Jan 05, 2013 Bettie rated it 1 of 5 stars · review of another edition

Shelves: published-2011, winter-20122013, tbr-busting-2013, nonfiction, fraudio, filthy-lucre, iceland, abandoned

At 48mins 31secs - ye geezer states that Iceland will drop the kroner in favour of the Euro - wrong - Iceland is not in the EU. It works through Norway and both have trade agreements with the EU. Neither are full members.

Iceland now wants to be ((candidate list)no financial surprise) and Norway strongly doesn't want to be. The peoples of Sweden want out but the govt is not keen on the penalty clauses.

There have been meetings to consider a nordic block.

This man is not the definitive - nosiree.

Tak...more

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Jul 19, 2012 John rated it 5 of 5 stars

Lewis generally elicits a "Wow" whenever he writes anything, telling incredible stories from the banks and trading pits (and more recently with Moneyball and the Blind Side, the locker rooms and sports franchises). He has spun a few decent books on high tech. But his last two tomes on financial malfeasance - The Big Short and Boomerang - are among his best. Irreverent to the point of being almost insulting, Lewis pulls the curtain and exposes the charade in the Iceland, the Eurozone and even lit...more

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Aug 15, 2012 Don Incognito rated it 4 of 5 stars Recommends it for: anyone who wants to understand what caused the financial crisis but has no financial background

Shelves: reviewed

This is a great book for anyone who wants to understand what behaviors caused the debt crises in various nations but does not have a background in finance or economics. It's not a very technical book. It studies several countries or other places that were and still are key to the debt crises in Europe and America, and concludes that in these places--Iceland, Greece, Ireland, Germany, and California--the horrible financial decisions that led to unsustainable debt and to recession (except in Germa...more

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Jun 14, 2013 Tiffany Reisz rated it 4 of 5 stars

The only reason it's four stars instead of five is because this is one of Michael Lewis's shorter works, sort of an afterthought to his larger and more comprehensive studies. BOOMERANG is a work of "financial disaster tourism." Lewis visits places around the globe where the cheap credit boom in the early 21st century lead to horrific financial disasters - Iceland, Greece, California... Lewis comes off sounded Xenophobic at times. The Greeks don't want to pay taxes, the Germans are poop-obsessed....more

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Apr 27, 2013 Yune rated it 4 of 5 stars

Shelves: nonfiction

I'm glad I didn't read the description of this book, relying instead on the author and subtitle when picking it up. Because I read The Big Short, also a book on the financial crisis by Lewis, and found it too opaque to understand. (I was reassured when a colleague of mine, intelligent guy, found it the same, despite the huge popularity of the book that I thought meant everyone else absorbed it easily.)

Lewis takes a different approach here. Here are several focused essays on a particular country...more

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Mar 16, 2013 Lou Schuler rated it 4 of 5 stars

Shelves: nonfiction

This is the fourth Lewis book I've read, starting with Liar's Poker, and followed years later by Moneyball, The Blind Side, and The Big Short. Having read The Big Short a year ago, I didn't think there was much point in reading Boomerang.

Not only does it cover the same territory as The Big Short, but I read most of the chapters in their original form as articles in Vanity Fair.

But my wife gave it to me for my birthday, and I had a free afternoon, and once I started reading, I couldn't put it do...more

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Jan 15, 2013 Charles Allan rated it 4 of 5 stars

Shelves: economics

Michael Lewis's Boomerang: Travels in the New Third World (another copy available here) is a collection of elegant, wickedly insightful essays about the just-burst debt bubble and different countries' attempt to come to terms with what just happened - and, more ominously, - what is ABOUT to happen.

In the aftermath of the initial financial meltdown of 2007-8, Lewis visits several European countries and the United States and writes about national character turned loose "in the dark" with unlimited...more

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Jan 07, 2013 James Cape rated it 4 of 5 stars · review of another edition

This review has been hidden because it contains spoilers. To view it, click here. For readers who aren't already aware, I've spent much of the last five years of my life in and around finance. About two thirds of that time, I've been working IT for a very niche subset of the industry: high frequency trading (the other third was spent in a market data vendor).

In spite of the implications certain people have attempted to instill, computerized trading had absolutely nothing to do with the financial crisis of 2008. The products behind that disaster were entirely over the counter-...more

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Dec 31, 2012 Dennis rated it 4 of 5 stars

This came as a recommendation from a friend, which I love because it mixes many of my interests: travel, international politics, finance, and satirical humor. The author is a financial journalist who sets out to describe the world credit crisis of the last several years. In the process he visited several countries including Iceland, Ireland, Germany and Greece, and recorded the various national characteristics that were revealed in each respective nation's handling of the money meltdown.

Icelande...more This came as a recommendation from a friend, which I love because it mixes many of my interests: travel, international politics, finance, and satirical humor. The author is a financial journalist who sets out to describe the world credit crisis of the last several years. In the process he visited several countries including Iceland, Ireland, Germany and Greece, and recorded the various national characteristics that were revealed in each respective nation's handling of the money meltdown.

Icelanders notoriously rocketed into the surprising role of world financiers within just a handful of years. Fishermen became bankers overnight and proudly trumpeted how their characteristics cultivated over 1,100 years had produced businessmen with a particular acumen suited to global lending. In fact, some governmental policies (e.g., regulating fishing quotas) mixed with some luck (e.g., high bond ratings) created the effect of borrowing against foreign currencies and lending to each other to spawn a buying frenzy. The shopping spree lasted several years before the world market took note of the unreal debt to GDP ratio and the bond rating collapsed, bursting the bubble and sending the bankers crashing back to earth. For me personally, being familiar with the Icelandic people and culture, it was validating to have another outsider spend time up close and personal and to reveal characteristics and qualities few would recognize or, until now, dare to unmask. These include a naivety and self-importance that the author suggests comes from the fact that any citizen of this 300,000 European nation in the North Atlantic can walk in and hold audience with the prime minister practically at any time. Also, while claiming to be unthreatening Scandinavians, Icelanders in fact have a feral streak.

Equally amusing is the description of the Greeks with their sense of entitlement but resistance to accountability, or the Germans' love of rules but unwitting belief that others in the world adhere equally to restrictions on spending. Sad is the tale of the Irish who rose so quickly to prosperity but have since fallen back on hard times, this time while unnecessarily guaranteeing back debts rather that permitting Irish banks to fail for their indiscretions.

Many times I laughed out loud because the author has a knack for finding irony and satire in his observations. He never goes too far though, and seems to recognize how universally culture affects perspective and the difficulties of seeing the big picture objectively. There is some optimism as well, such as in the account of Vallejo, California, which is representative of the failing municipalities throughout the United States, in some ways left to their own devices since the state and national governments push down failures to the local levels. In that case, the town has scaled back massively but is beginning to live within its means and start over anew.(less)

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Dec 11, 2012 Joy Schwabach rated it 4 of 5 stars

What a wild ride! Michael Lewis takes you to Iceland, Greece, Germany, Ireland and the U.S. during the 2006 bubble and its aftermath.

Each country responded differently. The Germans did not make risky loans themselves, but they loaned insane amounts to others. The Icelandic fishermen became bankers with no training. (An aside: In the 70s, the government created property rights in fish. Your right to catch was based on your catch history, but you could sell your right to another. The government fi...more What a wild ride! Michael Lewis takes you to Iceland, Greece, Germany, Ireland and the U.S. during the 2006 bubble and its aftermath.

Each country responded differently. The Germans did not make risky loans themselves, but they loaned insane amounts to others. The Icelandic fishermen became bankers with no training. (An aside: In the 70s, the government created property rights in fish. Your right to catch was based on your catch history, but you could sell your right to another. The government figured out how much fishing to allow without depleting the stock. So the fishing industry became quite sustainable.)

In Greece, the people were most angry with a group of monks who were given huge resources in return for a mostly worthless lake the government had given them. Lewis visits the monks and has hilarious encounters.

The laid-back Irish didn't seem to mind bailing out the banks who had gotten government loans. Some of the protesters said "Dunno!" when asked why they all had yellow streaks on their faces.

In the chapter on the U.S., we visit California, where people got what they asked for --more services and more debt. The average person there makes $43,000 and has $78,000 in debt. The prisons are so bad that the Supreme Court ruled them "cruel and unusual punishment," and ordered the government either to improve them or let out 30,000 prisoners. So they let out the prisoners. Meanwhile, they still paid outrageous salaries --such as $838,000 to parole psychiatrists. A guard could start working at 45, retire at 50 and continue to get most of his salary.

Governor Arnold Schwarzenegger tried to get reform through the legislature but even budget-minded Republicans were afraid they'd get booted out of office. So he took his reforms to the people in a series of initiatives. But none passed, not the limits on state spending, the reform of gerrymandered districts or a requirement that would have made teachers stay longer in the job before getting tenure. A hilarious incident: Lewis goes bike riding with the governor and someone at a stoplight says, "Look, it's Bill Clinton."

Lewis is a superb journalist. My book group argued about his politics because he doesn't really show them. He presents the facts and some amazing anecdotes and lets you decide for yourself.(less)

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Nov 24, 2012 Kyle rated it 2 of 5 stars · review of another edition

This book was too glib for me. Maybe the shallowness is inevitable when an already shortish book is divided among five different stories. But I felt like Lewis left out some really interesting points that *I* know about, and I'm not a professional financial journalist (although I *have* been to Iceland, Ireland, Greece, and California since 2008, just not as a financial disaster tourist).

Like, what about how many Irish businesses are locked into contracts that say their rent can only ever incre...more

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Nov 24, 2012 Steve rated it 4 of 5 stars

Once again Michael Lewis has created a very interesting, entertaining, and engaging read. In this relatively short book he summarizes what happened in the most recent financial meltdown by presenting engaging and explanatory sections on Iceland, Greece, Ireland, Germany, and finally, the United States, focusing on California. Not an analytic study it nonetheless presents basic facts and events as they occurred in the focused-on countries, presenting them in an anecdotal way that abets a better u...more

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Nov 19, 2012 David rated it 4 of 5 stars · review of another edition

This is a book that exposes the faults at the heart of different countries' approach to finance, with Iceland, Greece, Ireland, Germany and the US all going under the microscope. By focusing on culture and national identity, rather than economic theory, Lewis has produced a book that is not only revealing and - at times - rather chilling as you try to get your brain around just how much debt various countries are on the hook for, but it is also a highly entertaining read and made me laugh out lo...more

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Oct 23, 2012 Schnaucl rated it 4 of 5 stars Recommends it for: People interested in the financial crisis and its effects

Shelves: library, non-fiction, october, read_2012

I thought this was an interesting book. Lewis travels to various places affected by the bank collapse of 2008. He visits Iceland, Greece, Ireland, Germany, and also covers the US, or at least, California.

He has a theory that each culture does something different "in the dark" when they suddenly have access to easy credit.

Iceland wants to stop fishing and go into finance, Greece wants to give lavish government benefits to as many people as possible, Ireland wants to buy Ireland (which is to say...more

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Oct 02, 2012 Zainil rated it 4 of 5 stars

I read this without having read the Vanity Fair articles and was quite happy, though of course you can get those articles for free online. The short introduction, not online, is quite funny--Kyle Bass is hilarious (shooting beaver with sniper rifles, piling 20m nickels in a vault--seriously, that is pretty creative, apparently so much so that the Federal Reserve called him to investigate.) So many financial analysts were caught off guard by the increased market turmoil in 2011, so as in the Big...more I read this without having read the Vanity Fair articles and was quite happy, though of course you can get those articles for free online. The short introduction, not online, is quite funny--Kyle Bass is hilarious (shooting beaver with sniper rifles, piling 20m nickels in a vault--seriously, that is pretty creative, apparently so much so that the Federal Reserve called him to investigate.) So many financial analysts were caught off guard by the increased market turmoil in 2011, so as in the Big Short it's kind of disingenuous to talk about the one guy with the contrarian view that seems prescient in retrospect. How were financial analysts to know, in 2009, that Greece was cooking their books?

Lewis has an unerring eye for satire (he has a hilarious story about the German gov't reacting to a Jew applying for a German passport) and for making corporations and govts' weakness, greed, and vanity seem funny. There are some seemingly nonsequitur stories (about the German spirit, full of pretty inappropriate and drawn out scatalogical jokes) that are pretty simplistic. There's also moralizing-- 'we all wanted something for nothing, except for the germans'-- that I don't care much for, as they're pretty weak, almost anodynes--especially the shotgun paragraph about optimism that concludes the book. Whenever Lewis stops being funny and tries to find ~meaning in it all the reader has to put it down. It's apparent from just reading the stories what people's motivations are.

This is also kind of depressing. In one paragraph Lewis talks about how he was interviewing people in Greece and they just kept coming up with scandal after scandal--he had to stop writing because there were too many. The scenes of financial catastrophe--empty houses in Ireland, cynical tax cheats in Greece, Greek protesters killing pregnant women for daring to show up to work, municipal struggles, kids bankrupting Iceland, Germans following the rules and losing in a rigged system, Californians paying the highest tax rates for some of the most inefficient budgeting in the country-- kind of just hits home. I mean, it's too depressing to think about. If the governor can't reform things, what are the chances of an average Californian citizen doing so?

Finally, this book is quite short -- I finished it up one quiet evening at home. I'd read it for the humor; it's thought provoking but doesn't excuse you from thinking. The coverage in this book does give a good layman's view on the sovereign debt crisis (in one satirical sentence: "Across Europe just now men who thought their title was 'minister of finance' have woken up to the idea that their job is actually government bond salesman."), though of course there has been buckets of literature on it now. Very enjoyable.(less)

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Sep 26, 2012 Jillwilson rated it 4 of 5 stars

Two interesting and intersecting things from the weekend. Towards the end of Boomerang, Michael Lewis quotes Peter Whybrow, a British neuroscientist, who says that dysfunction in American society is a by-product of America’s success. In Whybrow’s book ‘American Mania’ he explores the concept that the human brain has evolved in an environment defined by scarcity – the brain is not designed for abundance. The reptilian core predominates. "When faced with abundance, the brain's ancient reward pathw...more Two interesting and intersecting things from the weekend. Towards the end of Boomerang, Michael Lewis quotes Peter Whybrow, a British neuroscientist, who says that dysfunction in American society is a by-product of America’s success. In Whybrow’s book ‘American Mania’ he explores the concept that the human brain has evolved in an environment defined by scarcity – the brain is not designed for abundance. The reptilian core predominates. "When faced with abundance, the brain's ancient reward pathways are difficult to suppress." (p204) What this means in actuality is that when you are faced with an abundance of chocolate cake, you keep eating – the fear of future scarcity is predominant.

Lewis uses this theory to provide reasons for the kind of overindulgence, rampant consumerism and crazy decisions made in the global financial market in the last decade. The other interesting thing was on This American Life – a program on Education. ‘Back to School’ featured an economist, James Heckman, who explored whether the drop-out students who completed a short ‘make-up’ graduation package fared as well as those students who’d graduated high school in the regular way. He thought that the fast-track method could prove to be more economically efficient. What he discovered was what you would expect – the regular method led to greater success. The conversation led to a discussion about the importance of ‘character’ of how “non-cognitive skills” — qualities like tenacity, resilience, impulse control — are being viewed as increasingly vital in education.

These twin ideas come together in Lewis’ book - which is an exploration of how national ‘character’ both created and responded to the global financial crisis. People who hate stereotypes should cease reading now- Lewis is big on these. “If there is a weakness to Lewis’s writing, perhaps it’s the binary, either/or nature of his characters. Everyone is either a shark or a mark, a genius or a fool… Possibly this technique is an essential element when you’re turning rows of financial stats into an entertaining high-velocity narrative; figuring out whom to root for might slow things down. “ (http://www.forbes.com/sites/kylesmith...)
He visits Iceland, Ireland, Greece, Germany and California, painting a picture of how and why each country got into a mess. “Thus Iceland went mad on banking because, as a nation of fishermen, it has a culture steeped in macho risk-taking; Ireland went mad on house buying because, as a nation beset by a history of oppression and exploitation, landowning was the ultimate escape from the past; Greece went mad on avoiding tax payment and collection because, as a nation built on feuding, nepotism and graft, no one trusts anyone else and each Greek is out to look after himself; while Germany is left to pay the bill for the madness because, as an anally well organised nation with a cultural obsession with Scheiße, it likes the thrill of thrusting its clean fingers into other people's crap.” (http://www.guardian.co.uk/books/2011/... wish he'd written a chapter about Australia!

I love his work – he brings the world of finance alive in a unique way. His book ‘The Big Short’, about the build-up of the housing and credit bubble during the 2000s is a stand-out text and ‘Boomerang’ is not quite of its ilk. But worth reading for the description of Greece as a pinata and for details like this: the wage bill of the Greek public sector has doubled, in real terms” with the average government job now paying almost three times the average private sector job. Those who work in jobs classified as “arduous” can retire and start collecting pensions, he adds, “as early as 55 for men and 50 for women”; more than 600 Greek professions have somehow managed “to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on.” (http://www.nytimes.com/2011/09/27/boo...)

Lewis ends the book with the story of a British pheasant – which was eaten by a fox after it got too fat to fly. Abundance. We are hardwired to indulge, people in environments of abundance have sacrificed long-term interests for short-term rewards. That’s maybe where This American Life kicks in – we need education systems that promote development of ‘character’ – of capacity to self-regulate, to think about others, to plan for the future and to innovate – or as Lewis says, to “figure it out”, or, like the pheasant in one of his analogies, we will become too fat to fly and will be eaten by the fox (or by the melting of the ice caps – another story from the weekend. (less)

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Sep 07, 2012 Sean rated it 4 of 5 stars

Focuses on the societies that enabled the Great Recession, blaming them as much as Wall Street.
In Iceland, a male-dominated fisherman society of 300,000 became one massive hedge fund, and accumulated an impossibly huge debt per citizen because of the reckless short term lending and borrowing.
Greece is a rare case where the banks acted responsibly, but everyone else from citizens to government officials abused and robbed the system blind. No one pays taxes and simply bribes the tax collectors; C...more

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Aug 27, 2012 Jon added it

Michael Lewis visits Iceland, Ireland, Greece, and Germany to learn how various countries were affected by the 2008 financial crisis. Even though it occasionally felt as though Lewis didn't have the qualifications to make value statements about these countries (sometimes his total stay in a place was as short as 10 days), Boomerang presents compelling vignettes. Icelandic fishermen who thought they had the chops to be investment bankers, Greek monks who run what's essentially a business—lots of...more

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Aug 24, 2012 Mallie rated it 4 of 5 stars

Recommended to Mallie by: Nick

Great, quick read. Learned a lot about Iceland, Ireland, Greece and even Cali. Good follow up to the Big Short. Plus a lot more colorful and concise.

Favorite Quotations:
"One of the hidden causes of the current global financial crisis is that the people who saw it coming had more to gain from it by taking short positions than they did by trying to publicize the problem."

"The tsunami of cheap credit that rolled across the planet between 2002 and 2007 has just now created a new opportunity for trav...more Great, quick read. Learned a lot about Iceland, Ireland, Greece and even Cali. Good follow up to the Big Short. Plus a lot more colorful and concise.

Favorite Quotations:
"One of the hidden causes of the current global financial crisis is that the people who saw it coming had more to gain from it by taking short positions than they did by trying to publicize the problem."

"The tsunami of cheap credit that rolled across the planet between 2002 and 2007 has just now created a new opportunity for travel: financial-disaster tourism. The credit wasn’t just money, it was temptation. It offered entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Entire countries were told, “The lights are out, you can do whatever you want to do and no one will ever know.” What they wanted to do with money in the dark varied. Americans wanted to own homes far larger than they could afford, and to allow the strong to exploit the weak. Icelanders wanted to stop fishing and become investment bankers, and to allow their alpha males to reveal a theretofore suppressed megalomania. The Germans wanted to be even more German; the Irish wanted to stop being Irish. All these different societies were touched by the same event, but each responded to it in its own peculiar way. No response was as peculiar as the Greeks’, however: anyone who had spent even a few days talking to people in charge of the place could see that. But to see just how peculiar it was, you had to come to this monastery."

"In Greece the banks didn’t sink the country. The country sank the banks."

"There aren’t a lot Irish financiers, or real estate people, who have emerged with a future. In America the banks went down but the big shots in them still got rich; in Ireland the big shots went down with the banks."

"WHICH WAY ENTIRE nations jumped when the money was made freely available to them obviously told you a lot about them: their desires, their constraints, their secret sense of themselves. How they reacted when the money was taken away was equally revealing. In Greece the money was borrowed by the state: the debts are the debts of the Greek people, but the people want no part of them. The Greeks already have taken to the streets, violently, and have been quick to find people outside of Greece to blame for their problems: monks, Turks, foreign bankers. Greek anarchists now mail bombs to German politicians and hurl Molotov cocktails at their own police. In Ireland the money was borrowed by a few banks, and yet the people seem not only willing to repay it but to do so without so much as a small moan. Back in the autumn of 2008, after the government threatened to means-test the medical care, the old people had marched in the streets of Dublin. A few days after I’d arrived, the students followed suit, but their protest was less public anger than theater, and perhaps an excuse to skip school. (DOWN WITH THIS SORT OF THING, read one of the signs.) I’d tapped two students as they stumbled away from the event, to ask them why they had all painted yellow streaks onto their faces. They looked at each other for a beat. “Dunno!” one finally said, and burst out laughing. Other than that . . . silence. It’s more than three years since the Irish government foisted the losses of the Irish banks on the Irish people, and in that time there have been only two conspicuous acts of Irish social unrest."

Pensions in the US:
"In response, perhaps, the pension money that they had set aside was invested in ever-riskier assets. In 1980 only 23 percent of state pension money had been invested in the stock market; by 2008 the number had risen to 60 percent. To top it all off, these pension funds were pretty much all assuming they could earn 8 percent on the money they had to invest, at a time when the Federal Reserve was promising to keep interest rates at zero. Toss in underfunded health care plans, a reduction in federal dollars available to the states, and the depression in tax revenues caused by a soft economy, and you were looking at multi-trillion-dollar holes that could only be dealt with in one of two ways—massive cutbacks on public services or a default—or both. She thought default unlikely, at least at the state level, because the state could bleed the cities of money to pay off its bonds. The cities were where the pain would be felt most intensely. “The scary thing about state treasurers,” she said “is that they don’t know the financial situation in their own municipalities.”"(less)

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Jun 30, 2012 Jerry rated it 3 of 5 stars

Shelves: economics

This book has some interesting explanations of the recent financial crisis in the world. It talks about the bankruptcy of Iceland, the Greece default, the property boom and bust in Ireland, and how Germany ended up holding the bag.

For instance, here is some of what the author has to say about Iceland:
“When, in 2003, they [Icelanders] sat down at the same table with Goldman Sachs and Morgan Stanley, they had only the roughest idea of what an investment banker did and how he behaved – most of it g...more This book has some interesting explanations of the recent financial crisis in the world. It talks about the bankruptcy of Iceland, the Greece default, the property boom and bust in Ireland, and how Germany ended up holding the bag.

For instance, here is some of what the author has to say about Iceland:
“When, in 2003, they [Icelanders] sat down at the same table with Goldman Sachs and Morgan Stanley, they had only the roughest idea of what an investment banker did and how he behaved – most of it gleaned from young Icelanders' experiences at various American business schools... They bought stakes in businesses they knew nothing about and told the people running them what to do – just like real American investment bankers!”
“A handful of guys in Iceland who had no experience in finance were taking out tens of billions of dollars in short-term loans from abroad. They were relending this money to themselves and their friends to buy assets – the banks, soccer teams, etc. Since the entire world's assets were rising – thanks in part to people like these Icelandic lunatics paying crazy prices for them – they appeared to be making money. You have a dog and I have a cat. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in assets.”
“They were very different. They ran their business in a very strange way. Everyone there was incredibly young. They were all from the same community in Reykjavik. And they had no idea what they were doing.”
“In the end, Icelanders amassed debts amounting to 850% of their GDP.”

And regarding the Greek default:
In the past 12 years the wage bill for the public sector has doubled in real terms. The average government job pays almost three times the average private-sector job. The Greek public schools are among the lowest ranking in Europe but employs four times as many teachers as the highest ranking, Finland. Still the Greeks sending children to public schools must hire private tutors if their children are to learn anything. Patients needing medical attention must bribe the doctors, who all report only 12,000 Euro income which is the maximum income exempt from income tax. Retirement age for jobs classed as “arduous” is 55, for men 50 for women. “Arduous” jobs include 6000 professions such as hair dressers, radio announcers, waiters, and musicians. Greeks assume that everyone is cheating and on the take.

“The Greek state was not just corrupt but corrupting. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing.”

“Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.” Isocrates

And how German’s were left holding the bag:
In the 1970's American bankers were honest and trustworthy. But that has changed.
The Germans absorbed the brunt of the financial crisis because they were the last men playing by the rules.

“At bottom, the Germans were blind to the possibility that the Americans were playing the game by something other than the official rules. The Germans took the rules at their face value: they looked into the history of triple-A-rated bonds and accepted the official story that triple-A-rated bonds were completely risk-free. This preternatural love of rules almost for their own sake punctuates German finance as it does German life.”

“The global financial system may exist to bring borrowers and lenders together, but, over the past few decades, it has become something else, too: a tool for maximizing the number of encounters between the strong and the weak, so that the one might exploit the other. Extremely smart traders inside Wall Street investment banks devise deeply unfair, diabolically complicated bets, and then send their sales forces out to scour the world for some idiot who will take the other side of those bets. During the boom years a wildly disproportionate number of those idiots were in Germany.”
(less)

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Jun 08, 2012 Steven Mohr rated it 4 of 5 stars

Shelves: reviewed-books

If you’ve been a subscriber to Vanity Fair for the past couple of years… you probably shouldn’t waste your money; you may have already read this book. Pretty much all of Boomerang: Travels in the New Third World is taken right from articles Michael Lewis published in the magazine.

However! If you aren’t a subscriber to this major publication (or almost any large, expensive print serial) like me (though I do love my Newsweek) AND you want to learn about how Europe screwed itself up so badly (and...more If you’ve been a subscriber to Vanity Fair for the past couple of years… you probably shouldn’t waste your money; you may have already read this book. Pretty much all of Boomerang: Travels in the New Third World is taken right from articles Michael Lewis published in the magazine.

However! If you aren’t a subscriber to this major publication (or almost any large, expensive print serial) like me (though I do love my Newsweek) AND you want to learn about how Europe screwed itself up so badly (and refuses to take the possible steps it needs to be saved), get it! It’ll let you know! By the way I’m sorry for that extremely drawn-out sentence’ish thing. It was needed. Thanks to this book being made from a series of article installments, each problem he discusses is broken down and explained pretty well in and of itself. This is great for someone like me who often has to start and stop books either because of work or there was just another book I couldn’t turn down…

What I liked most about Lewis’ book is the questions it raises about the whole system of democracy. I’m not one to use the holier than thou “Founding Fathers” as evidence for just about anything, but I definitely agree with multiple statements written about a need for a republic to be filled with and governed by moral persons with more than just their own benefits on their minds. Like us, our nation has to be responsible with its finances (eeeeven in a recession): some of us will have to suck it up and pay more taxes and others of us will have to suck it up and take fewer benefits (us in the middle class have the humble pleasure of being a part of both!). Lewis shows us this through the experiences of Europe.

I’ll leave this poor man’s review with a great Socrates quote used in the book…
"Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress." (less)

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May 21, 2012 Brian Loux rated it 5 of 5 stars Recommends it for: Bondholders

Recommended to Brian by: Amber

Reading most of Mr. Lewis's books, I always end up walking away a little uneasy about the narrative or the conclusions or the morals about which I just read. So he gets a pass on idolizing hedge fund short-sellers becasue he helped you understand what a traunch was? I griped. Did none of you listen to NPR's Planet Money?

Yet somehow, in Boomerang, which may be more appropriately titled "Game Over Man, Game Over", I feel this is honestly some of his best work and have no remorse about whole-heart...more Reading most of Mr. Lewis's books, I always end up walking away a little uneasy about the narrative or the conclusions or the morals about which I just read. So he gets a pass on idolizing hedge fund short-sellers becasue he helped you understand what a traunch was? I griped. Did none of you listen to NPR's Planet Money?

Yet somehow, in Boomerang, which may be more appropriately titled "Game Over Man, Game Over", I feel this is honestly some of his best work and have no remorse about whole-heartedly endorsing the book. There are no heroes or timelines or anything tangential to the anecdotes that helps paint the bigger picture: everyone's out of cash.

The master of the finance metaphor comes out swinging:

-The problem with the EU is that it intertwines Germany and Greece as much as it does Indiana and Mississippi, and neither of them is sure they want that.

-What's missing in the resumes of smart Germans is the part where they quit their jobs and join Goldman Sachs

-The credit bubble was Alan Greenspan pouring a giant bag of money into a room and telling everyone in the world "now I'm just going to leave this here and turn the lights off. surely you won't do anything you'll come to regret." Banks were the canary in the coal mine. Every country and municipality (except Germany) went just as nuts.

-Our behaviors during the bubble were really just our cultural behaviors amped up to 11. Which is why we find it so hard to change anything.

And unfortunately, it explains quite clearly how we've entrenched ourselves into a hole that we either cannot or just will not dig ourselves out of. Even if the finances were there to raise taxes and cut spending enough to clean everyone's balance sheets, who would vote for it?

But as much as the book could frame itself as, and almost seemingly starts off as, an alarm bell to follow your Ron Paul friends to the gold and ammo shops, it's not. It is a love letter to the financial mop-and-bucket guys who will take the thankless jobs to figure out how to reform the balance sheets while being derided by everyone but their mothers. It is a recognition to live within one's own means. To accept scarcity. To realize that the whole era of big fast money was an unsustainable one that's going to come to an end. To save your city or state before you see your whole neighborhood collapse. To reflect on what's really important.

Yes, Mr. Lewis, you've paid off your debt for Liar's Poker. I'll see you at the soup kitchen. (less)

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May 09, 2012 Katina rated it 3 of 5 stars

Shelves: 2012

Boomerang was written, as I understand it, as an offshoot of another Lewis book on the financial crisis, "The Big Short." He followed the sub-prime mortgage morass to other markets and reports on the crises in Iceland, Greece, and Ireland (the "new third world" as he terms it) among other places. This book is the result of that travel and research.

Parts of this book were really fascinating, and Lewis is a strong writer. I got so tired of the gross generalizations about certain cultures that perm...more

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May 09, 2012 John rated it 5 of 5 stars

I have to admit, this book was an unexpected surprise....and a great one too! Getting ready for a recent long road trip, my plan was to drop by the library and get a couple of things to keep my mind occupied over the 10 hour haul(s). But, upon arrival, it was obvious that there was some sort of rearrangement going on. In any case, I grabbed Boomerang as much for the title than anything else.

Wow, what a gem. Michael Lewis takes the first half of this book and CLEARLY explains the basic history an...more

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May 06, 2012 Aaron rated it 2 of 5 stars

After The Big Short, this is a weird book. Lewis almost completely abandons the Napoleonic narrative of history suggested by The Big Short in this one, where both success and disaster, no matter how broadly written, is basically the result of the choices of special people who are able to exploit unique opportunities to create economy shaking results. There’s almost none of that here. Whereas the American crisis seems to be the result of a few very smart people either creating or identifying a ge...more After The Big Short, this is a weird book. Lewis almost completely abandons the Napoleonic narrative of history suggested by The Big Short in this one, where both success and disaster, no matter how broadly written, is basically the result of the choices of special people who are able to exploit unique opportunities to create economy shaking results. There’s almost none of that here. Whereas the American crisis seems to be the result of a few very smart people either creating or identifying a generally hidden schism in the evaluation of certain mortgage backed securities (and the calamities that followed), the European economic disaster is characterized as having resulted not from personal greatness or systematic efficiency but from culture itself, at a level of generality so grotesque that the decisions of individuals become irrelevant.

To explain: Our economy crashed because a few very wealthy Americans very cleverly found a way to become much richer at the expense of absolutely everyone else. Our government regulators were asleep at the wheel, multiple of our most important financial institutions shoved off their fiduciary obligations and started fleecing their own clients, a few smart people figured out what was going to happen before everyone else and made billions shorting the market, making everything worse by an order of magnitude. Then they all got bailed out. This is by now an old story, but a profoundly “American” one. Compare Iceland, who went under because they have a hyper-masculine, overly entitled culture. Or the Greeks, because they’re so corrupt (as a culture) that they are incapable of collective thinking. Or the Germans, who are fatally bound to morally neutral ideas of obeying the rules so deeply that it’s “part of their cultural DNA” (Lewis’ phrase, not mine) and therefore make easy marks for everyone else, and who are secretly obsessed with feces in a way that ultimately causes their banks to make bad financial decisions (seriously).

There’s something hard to swallow about all of this. Americans survive as the ultimate genius pragmatists, a few rugged individualists who brought down the whole system because they were selfish, and because nobody else could quite follow what they were doing. Lewis makes a few broad conclusions about “American culture” in The Big Short - we’re litigious, we’re not sufficiently regulated, everyone is looking for an angle - but these silly cultural generalizations are nonetheless not the whole point of his analysis. With Boomerang, his cultural tourism doesn’t go much deeper. It seems profoundly unfair to allow that Americans did what they did because they were profoundly rational, but the Germans became the dupes of our crisis because they secretly want to be tied up and spanked.

If anything, Boomerang suffers from follow-up syndrome. After The Big Short and Moneyball, Lewis can pretty much write whatever he wants and someone will publish it. Boomerang is the modest expansion of a series of one-offs written for Vanity Fair and belatedly consolidated into a book, and it shows. Several of the essays have nods to the sort of cultural contemporaneity fine for magazine articles but which serious works try to avoid (at one point, he compares a Greek financial wizard to the Most Interesting Guy In The World from the Dos Equis commercials). This only exacerbates the already extant feeling that this is less a novel of vision than one of opportunity, though Lewis, who is clearly enjoying his moment in the sun, can hardly be blamed for maximizing his income stream, especially given the economically draconian subject matter.

This isn’t to say the book is worthless. At times, it’s a solid work of economic tourism and works better when Lewis zeroes in on specifics and spares the sweeping quasi-anthropological narratives for where each country went wrong. His interviews with the Greek monks who made themselves billionaires through cagey use of Byzantine (literally) property claims are an interesting read. His chronology of the downfall of Irish banks is specific enough to be worthwhile. But Lewis can’t help but draw huge conclusions. The Greeks are selfish. Iceland is full of egomaniacal alpha males. The Germans are fetishists. From this, all else follows.(less)

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Mza isn't going from th specific to th general sort of th point of anthropology? I haven't read th book, so I can't defend Lewis's arguments or th methods...more
May 08, 2012 11:11am

Aaron Mza wrote: "isn't going from th specific to th general sort of th point of anthropology? I haven't read th book, so I can't defend Lewis's arguments o...more
May 08, 2012 11:10pm

Mza as I see both economics and anthropology as not particularly rigorous disciplines, I don't see mixing th two as any more dangerous than wielding eithe...more
May 10, 2012 10:16am

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