Alex's Reviews > The Big Short: Inside the Doomsday Machine

The Big Short by Michael Lewis
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's review
Jun 20, 10

Read in May, 2010

Michael Lewis has had a pretty incredible year. Aside from the success of the movie "The Blind Side," based on his book, he's become one of the key scribes for the Great Recession.

Lewis is apparently a bit embarrassed by all of this attention--as he puts it, he's not Jesus, he's Brian. And it would be a mistake to look at "The Big Short" as the definitive work of the financial crisis.

Lewis set out to look at the situation from one specific lense--those on the outside who managed to make money while Wall Street crashed. There are other important stories of the recession---for instance, the stories of those whose homes were foreclosed and who were laid off.

But this is the story about the few financiers who were smart and wise enough to see the disaster coming, and did what financiers do--found ways to profit from it. For the most part, this means they were on the winning end of those credit default-swaps which you've heard a lot about. Essentially, these are the people who did the work which banks, investment firms, and ratings agencies were supposed to do -- but too many perverse incentives forced them to look the other way.

Lewis is able to explain all of this in vivid prose which make distant and arcane concepts seem tangible. This is no surprise. Lewis has made a career out of examining the concept of numerical value--whether in Wall Street or in baseball. But what elevates Lewis everyone else is his ability to weave the numbers into engaging human stories which never seem forced. "The Big Short" is about a group of smart, eccentric bankers who are simultaneously entranced and horrified by the oncoming disasters -- people who are half Cassandra, half P.T. Barnum.

Much ink has been spilt over the financial crisis, but I can't imagine that any of it is a better read than these brisk 300 pages. A must read.
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