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The Big Short: Inside the Doomsday Machine

4.2 of 5 stars 4.20  ·  rating details  ·  58,395 ratings  ·  3,723 reviews
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 derivat
Audiobook, Unabridged, 9 pages
Published March 15th 2010 by Simon & Schuster Audio (first published November 2009)
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Ms.pegasus I think it's a question of viewpoint. Lewis picked out two protagonists for his narrative, and made this a character-driven story. Obviously, a lot of…moreI think it's a question of viewpoint. Lewis picked out two protagonists for his narrative, and made this a character-driven story. Obviously, a lot of characters and events have been omitted.

I would recommend this book as the first to read about the subprime crisis, but certainly no the last. It is really difficult to understand the derived derivatives: tranches, synthetics, and finally the credit default swap, and I'm sure they are a lot more complicated than Lewis describes. Armed with this basic explanation, readers like you can go on to more complex and detailed narratives.(less)
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Community Reviews

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The Subprime Mortgage’s too easy to just lay blame on a cabal of greed-constipated Wall Street sphincters who unzipped their consciences, yanked down their morals and dropped a huge deuce on the U.S. financial system.

In many ways it’s TRUE and it feels REALLY good to say...but it’s too easy.

There were clearly some major crooks, scumbags and swindlers involved in this monetary atrocity...a number of whom should have been taken out to the desert and shot, in my very pissed off opini
Lorin Kleinman
Remember that point, in recent years, when we all started to notice something strange? Houses were getting more and more expensive, interest rates were dropping more and more, and most of us knew someone who had no money, but was able to get a huge mortgage. And then there were all the stories of people buying houses with no money down and interest-only payments for three years. How exactly were these people expecting to make principal payments in three years? And why was anyone lending them mon ...more
Will Byrnes
Michael Lewis looks at a handful of people who saw what was happening in the US economy, tried to sound an alarm, but also used their knowledge to make barrels of cash.

If the tales told here, following the fiscal 9/11 that is Wall Street ethics, do not scare you away from investing with any Wall Street firm, I do not know what will. Lewis may single-handedly revive stuffing cash in mattresses as a savings option.

What becomes clear is that there is no substitute for doing the hard work of gathe
Rachel C.
This book made me want to vomit, then take a bath in a tub of bleach. Not because it's not well-written, but because the story is so repugnant and grotesque.

Lewis' last book "The Blind Side" told the stories of a lot of people who, when faced with impossible situations, chose to do the right thing and/or work harder. This book exclusively features people who were criminally stupid, those who were just flat-out criminals, and the scumbags who were smart enough to profit from it when the financial
Robert Intriago
It was a good book, but it disappointed. I will tell you what let me down:

1. One of the reasons for the credit crash was the lenght of the easy monetary policy pursued by the FED and Greenspan after 9/11. Mr. Lewis devotes about one paragraph towards the end of the book to it and Mr. Greenspan is only mentioned three times, even though his policies were the cause of the housing bubble, my opinion.

2. I found the book repetitious. He tells the same story from three different points of view, even t
Lewis has a talent for making his readers feel smart. Absorbing his best works, you’re granted kinship with the elite. Like a trader at Salomon Brothers, you might have laughed at the chumps in the bond market; or like the wage-constrained A’s boss, you could’ve cobbled together a line-up that draws lots of walks; or like a genius of modern day football, you would’ve recognized the importance of a great left tackle in protecting your quarterback’s back. Now, with The Big Short, you’d no doubt ha ...more
Lawd. This book took my breath away. I remember what I was doing at several critical moments described in the book and to have been so unaware makes me breathless. I learned things and feel oddly vindicated and cheated at the same time. I knew dumb people were making money with my money: vindicated. I thought some people in the government might be smart enough to realize what happened and know what to do: cheated.

Michael Lewis played two roles in writing this book about the subprime loan debacle
I have to SHOUT during this review. Now I finally know the sleaziest, oily, untruthful, and arrogant class of people in the US--financial brokers at the big Wall Street investment banks. The Big Short is a rare look deep inside the machinery that broke the spine of our real estate industry. This is not the more common bottom-up look at the mortgage loan sweatshop industry; instead, this is a top-down view from the rarefied air above 20 stories at Goldman Sachs, Morgan Stanley, Merryl Lynch, JP M ...more
In The Big Short, Michael Lewis outlines the causes of the housing crisis (which led to the larger Financial Crisis of 2007-2010), and tells the story of three small investment companies (basically four different investors) who saw it coming, bet against it, and made millions of dollars in the process. I really enjoyed reading about these individuals who foresaw the coming doom. Great human interest stories.

I think one of the greatest take-away learnings for me is the explanation why nannies who
Mike W
This book provides an interesting and enjoyable glimpse into the world of the Wall Street financiers who helped to create the recent financial crisis and the savvy few who recognized the bubble before it had burst.

As a piece of economic analysis Lewis's work has serious flaws. While he sees correctly that moral hazard was central to creating the crisis Lewis looks for the moral hazard in the wrong place: arguing, oddly, that the transformation of Wall Street firms from private partnerships into
Otis Chandler
An extremely well-written account of the 2008 financial collapse. It explained complex ideas like subprime mortgage bonds and CDO's in a clear way, and almost read like a fast paced thriller.

Essentially it seems that a bad ratings system and human greed created an economy that fostered the creation of a lot of bad debts, that eventually went bad, and caused a lot of big companies to go under (Lehman brothers, Bear Sterns), or require a bailout (Goldman Sachs, AIG). This is the real crime. These
Happy thought for the day:

At least I don't have to include a stint as an analyst for Moody's or Standard & Poor's to my list of professional shortcomings.
Oct 05, 2015 Ms.pegasus rated it 5 of 5 stars  ·  review of another edition
Recommends it for: anyone interested in the financial crisis
Michael Lewis turns the 2008 financial meltdown into a compelling narrative about two very smart, very abrasive skeptics who realized the juggernaut Wall Street had created was doomed to self-destruct, and worked out how to cash in big — the big short.

Steve Eisman began his career as a corporate lawyer. Eisman was an outspoken curmudgeon. Stupidity bored him. Tact was not one of his gifts. When others spoke it looked like he was sampling rather than listening. It's difficult to imagine how he ma
Frances Levy
Every intelligent person in America needs to read this book. Actually, it should be required reading.

By telling the story of the 2008 financial meltdown through the stories of a handful of people, Lewis manages to clarify and explain exactly what happened, how it happened, and why it happened (that would be unbridled greed of Wall Street banks and hedge funds. Duh.) The most enlightening revelation to me is Lewis's take on the rating agencies (Standard & Poor's and Moody's), which he charact
Clif Hostetler
This is the best description so far of the inside story about the sub-prime mortgage crisis. Reading this book is like riding a time machine back a couple years, walking into the Wall Street offices and asking them, "What in the world were you thinking?" The story is told from the view point of several investors who were betting against the sub-prime mortgage industry. But there were so few other people who saw it their way that they kept second guessing their position because they couldn't unde ...more
The Big Short: Inside the Doomsday Machine is more than 5 stars. It deserves the highest rank for the clear explanation of how to answer this question: “How do you explain to an innocent citizen of the free world the importance of a credit default swap on a double-A tranche of a subprime-backed collateralized debt obligation?” Not only will you be able to understand that arcane financial question, you will be riveted in the story Michael Lewis tells while you learn. Look, it is only 3 years to t ...more
I think I might have a mini journalist's crush on Michael Lewis. First, that awesome article about Greek Monks pulverizing the financial system in Vanity Fair this month, now The Big Short. Lewis has an incredible ability to make unpalatable subjects such as credit default swaps fascinating. Anything related to economics is high on my "not interested" list. And I put the blame squarely on my high school economics teacher, a woman who insisted on pronouncing the world "equilibrium," "equileeeebri ...more
Steve Lowe
I never did really come to like anyone in this book. Why? Because every person written about here was in essense a dirtball. The Big Short tells the story of the financial collapse of 2007-08, specifically the spectacular implosion of the subprime mortgage lending market.

On one side, you have the completely repellent folks dealing in the packaging and selling of subprime mortgages in a number of various forms. Subprime mortgages are loans made to people with very little chance of paying them bac
In "The Big Short", Michael Lewis takes another waltz through the disaster that is Wall Street.

I personally saw so much of the topic of this book happening over the course of my career in the financial world. In the early 1990's as a broker with Merrill Lynch, Lewis had written our Bible, "Liar's Poker". I was at Oppenheimer in the mid 1990's when Steve Eisman was making his first short recommendations on consumer credit stocks. I spent a short stint working at a mortgage company in the early 20
Jon Spoelstra
Don't read this if you want to mellow out. This book will make you furious. It's about how the global financial world almost blew up.

It all started with a very altruistic notion: Let's let everybody own a home, whether they were credit worthy or not. This altruistic thing went crazy wild. In a few years, all the big Wall Street financial firms were packaging these sub-prime mortgages into bonds Moody's and Standard & Poors often rated them triple-A. However, in reality, the sub-prime mortgag
David Lentz
I have great respect for the clarity and diligence that Michael Lewis brings to shed new light on the second greatest financial disaster in modern American history. He knows where to go to find the bones buried by people both who profited immensely from and were destroyed on Wall Street by the unsurpassed greed of the sub-prime mortgage fiasco. I was intrigued by the creation of high-risk debt obligations consisting of packages of sub-prime mortages with teaser rates which blossomed so predictab ...more
I am of two minds about this book. Either:

* Everyone in the world should read this book

... or ...

* No one should /ever/ read this book.

When The Big Short first came out, I heard about it on NPR, listened to a review on Planet Money, listened to an interview with Michael Lewis on Planet Money, heard several more people talk about this book, and then decided not to read it for 'rage management' reasons. Planet Money recently released their recommended books about the crash and the economy and, th
Four years ago, I would rant to anyone who would listen about the insanity of the real estate market: who was BUYING all these places, and WHERE were they getting the money? I knew from simple math and common sense that I couldn't afford a mortgage, but I didn't understand how my conviction could put me in such a distinct minority in the general population. The most frightening thing about Lewis's book is the revelation that my situation had an exact parallel on Wall Street, where the handful of ...more
Michael Lewis has a knack for taking very complex subjects and weaving a highly readable story around them and filling them with an array of fascinating real-life characters. My only complaint is that I wish he wrote more books! For uninitiated Lewis wrote the excellent Money Ball and Blind Side, both 5 star books as far as I'm concerned. "The Big Short" is his telling of the sub-prime mortgage crisis through the eyes (mostly) of the select few that saw it coming. Keep a keen eye for what could ...more
I know almost nothing about money. I know what it is (a physical representation of value that can be exchanged in place of true value), I know what a loan is, and what a bet is, but words like "bond" and "equity" set my head spinning, and "credit default swap" and "subprime mortgage bond-backed CDO" generally result in a horrible rash and near-asphixiation. So I guess I need to give this book credit for forcing me to learn a few things about money and finance, like what a mortgage is, how the de ...more

Amazing. Scary. I recommend this book for anyone who thinks they have the stomach to get all the way through. Up until now I thought I had a clue about what provoked the financial meltdown of 2008 but I did not. What we hear in the media is sanitized for us, the masses. I am completely blown away by this book.
Michael Lewis writes very clearly so that even if I don't get all the nuances of the financial world, and I certainly don't, I still come away with a clearer picture of how this all happe
Like most people, I'd heard the terms credit default swap and collateralized debt obligation on the news. I followed the collapse of the subprime housing market with curiosity and figured that irresponsibility and greed was behind the collapse of the big Wall Street firms, but I didn't understand what had really precipitated the disaster until I read this book.

Michael Lewis can make pretty much anything interesting and, at times, funny. You may need to look up a few terms if you're not familiar
I was initially skeptical of this book. Surely it was going to be another rant against the incomprehensible greed of Wall Street. What, after all, is the use of the financial sector which doesn't "make anything"?

I was completely wrong. Since the characters (and author, originally) come from a Wall Street background, they aren't ideologues. Instead, they are appalled at how what should be a system for allocating capital was sucked into a morass of fraud and deception. It provides an extremely com
As Steve says in his review, there's a danger to beware of while reading this book. Namely, that danger is pretension; the feeling that you would have seen the collapse of the subprime mortgage bond market coming from a mile away, something most on Wall Street didn't see at the time. And believe me, I make no apologies for the people who caused the crisis (in fact, I think a great many of them ought to be thrown in jail), but I think it's easy to come away from this book with the sense that you ...more
I've written before about the subprime mortgage crash and how it happened. We learned shortly after it happened that a major element was the Republicans' insistence on the Commodity Futures Modernization Act, which they snuck into the budget at the end of 2000. This act prohibits the federal and state governments from any regulation of derivatives, and this led to the creation of the credit default swaps that were the direct cause of the collapse of AIG and the other mortgage-backed bond funds. ...more
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  • Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon
  • Lords of Finance: The Bankers Who Broke the World
  • On the Brink: Inside the Race to Stop the Collapse of the Global Financial System
  • The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
  • Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
  • Den of Thieves
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Michael Lewis, the best-selling author of Liar’s Poker, The Money Culture, The New New Thing, Moneyball, The Blind Side, Panic, Home Game, The Big Short, and Boomerang, among other works, lives in Berkeley, California, with his wife and three children.

His latest book, Flash Boys, was published on March 31, 2014.
More about Michael Lewis...
Moneyball: The Art of Winning an Unfair Game The Blind Side: Evolution of a Game Liar's Poker Flash Boys: A Wall Street Revolt Boomerang: Travels in the New Third World

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“What are the odds that people will make smart decisions about money if they don't need to make smart decisions--if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they're still all wrong.” 19 likes
“The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street it was a machine that turned lead into gold.” 15 likes
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