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The Big Short: Inside the Doomsday Machine

(Liar's Poker #2)

4.28  ·  Rating details ·  116,549 ratings  ·  6,247 reviews
The #1 New York Times bestseller: "It is the work of our greatest financial journalist, at the top of his game. And it's essential reading."—Graydon Carter, Vanity Fair

The real story of the crash began 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 impenetra
Paperback, 305 pages
Published February 25th 2011 by W. W. Norton & Company (first published November 2009)
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Keith Definitely Too Big To Fail, but also try Fools Gold by Gillian Tett. It's a bit heavy in parts but the story it tells is mind-blowing
Bob H Not if you're intelligent, and someone interested in this book probably is. Given that this book is about a series of mind-bending and ridiculous…moreNot if you're intelligent, and someone interested in this book probably is. Given that this book is about a series of mind-bending and ridiculous financial schemes, it could have been a dry economics talk, and the author instead has made it a personality-driven story. It's how a bunch of adults, who should have known better, wrecked the economy you'll be growing up in. This story put me in mind of Disney's version of "The Sorcerer's Apprentice" (in "Fantasia"), a doubling and re-doubling disaster that these geniuses started, contributed to, and couldn't stop.(less)

Community Reviews

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4.28  · 
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 ·  116,549 ratings  ·  6,247 reviews

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Jeffrey Keeten
”The ability of Wall Street traders to see themselves in their success and their management in their failure would later be echoed, when their firms, which disdained the need for government regulation in good times, insisted on being rescued by government in bad times. Success was an individual achievement; failure was a social problem.”

The real estate market in the United States after several years of frantic growth peaked in 2004, which was the year I decided to start buying properties. I was
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
Will Byrnes
Jun 03, 2010 rated it really liked it  ·  review of another edition
Shelves: nonfiction, economics
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
Navidad Thélamour
...there's a difference between an old-fashioned financial panic and what had happened on Wall Street in 2008. In an old-fashioned panic, perception creates its own reality: Someone shouts "Fire!" in a crowded theater and the audience crushes each other to death in its rush for the exits. On Wall Street in 2008 the reality finally overwhelmed perceptions: A crowded theater burned down with a lot of people still in their seats. Every major firm on Wall Street was either bankrupt or fatally intert ...more
May 04, 2010 rated it really liked it  ·  review of another edition
Original review: May 4, 2010

Lewis has a talent for making his readers feel smart. Taking in his best works, you’re granted kinship with the elite. Like a trader at Salomon Brothers, you might laugh at the chumps in the bond market; or like the money-constrained boss of the Oakland A’s, you might cobble together a winning line-up by way of statistics; or like a genius of modern day football, you would recognize the importance of a great left tackle in protecting your quarterback’s blind side. Now
Nov 17, 2015 rated it really liked it  ·  review of another edition
Shelves: 2016, non-fiction, bidness

“Be fearful when others are greedy and greedy only when others are fearful.”
- Warren Buffett

Some of the most essential financial lessons I ever learned came from comic books back in the ‘90s when a bubble fueled by idiotic speculation on crappy books marketed as ‘collector’s editions’ eventually burst. It left me with several copies of all the variant covers for Jim Lee’s X-Men #1, and the realization that something is only as valuable as what someone will actually pay you for it. It was also e
Elyse Walters
Apr 23, 2010 rated it it was amazing  ·  review of another edition
Update: Christmas greetings to those of you who celebrate!
Paul and I are seeing this movie today!
I'm guessing the movie will be great!

Hasn't everyone read this book? In my area --extra copies could be found at bus stops around town -on tables in Star Bucks -
I wouldn't have been surprised if books were added to people's grocery bags. At one time this was the 'it' book to read.
"The Big Short" was everywhere. Michael Lewis became a popular-household name....

Hugely entertaining and informative lo
Lorin Kleinman
May 03, 2010 rated it it was amazing  ·  review of another edition
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
Aug 07, 2017 rated it really liked it
Wall Street is probably best known for the movie quote "Greed is good."

But after reading The Big Short, Michael Lewis' excellent book about the lead up to the 2008 global financial crisis and the small group of people who saw the collapse coming and bet against it, I think Wall Street needs a new saying: "Y'all are a bunch of greedy assholes."

I've read several Michael Lewis books, and he does a good job explaining complex subjects to lay people. I'd recommend this book (and the quirky movie base
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
Apr 15, 2010 rated it really liked it  ·  review of another edition
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
Steve Sarner
Feb 04, 2016 rated it it was amazing  ·  review of another edition
This book propelled me back to a conversation from the fall of 2005. I was at my son’s junior peewee football game on a warm autumn day talking to some other dads at halftime. The conversation was on how people were refinancing their homes at unheard of values and next to nothing interest rates. The group was a mix of men, some in real estate, a few newly minted mortgage brokers and some others of various professions and income levels. I recall, as the game resumed and the conversation wound dow ...more
Mar 21, 2010 rated it it was amazing  ·  review of another edition
Shelves: nonfiction
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
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
Andrew Smith
Jan 02, 2019 rated it really liked it  ·  review of another edition
Shelves: non-fiction, finance
I think most are aware of the role subprime mortgages played in the 2007 banking crisis and the resulting worldwide financial crisis that followed in 2008. The subprime market was made up of house purchase loans and secondary (often re-finance) loans which were also secured against the property. This book walks us through the timeline following the rise in the popularity of these loans, how and when they began to get batched together and sold off in packages and the resultant collapse of the mar ...more
May 13, 2016 rated it really liked it  ·  review of another edition
Shelves: nonfiction
Achievement unlocked: I finally understand what the term "shorting" actually means.

Lewis provides a thorough and interesting take on the financial crisis, and now I think I finally begin to understand what caused the world economy to tank. As Lewis notes, there was plenty of greed to go around, but it was the criminal irresponsibility of the bankers, the investors, the bond traders, that really created the opportunity for such large-scale corruption.

I found this book particularly difficult bec
Carmen de la Rosa
Jul 30, 2017 rated it really liked it  ·  review of another edition
Un fantástico libro sobre la crisis que se originó en 2007 con las hipotecas subprime. Te cuenta exactamente como se ha llegado a la actual situación económica y qué papel jugaron los bancos en la crisis.

Michael Lewis aborda un aspecto de la crisis: los que supieron preverla y actuaron en consecuencia, realizando inversiones “a corto” antes del estallido. Los retratos de los personajes son atractivos y novedosos, porque sus nombres no son muy conocidos. Los productos financieros y las operacion
May 08, 2010 rated it really liked it  ·  review of another edition
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
Jul 16, 2016 rated it it was amazing
This was a really captivating read. It's a good intro to what occurred in 2008 and who were involved that led up to the failure of the banks. Makes one really wonder how oblivious they all were to their impact to the general population. Banks are pretty soulless and detached from reality.
Oct 11, 2011 rated it it was amazing  ·  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
Clif Hostetler
May 01, 2010 rated it it was amazing  ·  review of another edition
Shelves: current-events
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
Mike W
Aug 23, 2010 rated it liked it  ·  review of another edition
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
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.
Jul 11, 2011 rated it it was amazing  ·  review of another edition
Shelves: business, library, history
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
L.A. Starks
Jan 30, 2016 rated it it was amazing  ·  review of another edition
This non-fiction account of the players and events behind the financial crisis of 2008, specifically banks spinning out derivatives whose risk they themselves didn't understand, was for me scarier than any horror movie.

Lewis explains how credit default swaps and synthetic options got so far out of control as people bet on an ever-rising housing market that the American financial system would have self-destructed but for the intervention of the government.

Having lived through the crisis, I well
Steve Lowe
Apr 11, 2011 rated it really liked it  ·  review of another edition
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
Daniel Chaikin
May 09, 2016 rated it really liked it  ·  review of another edition
Shelves: audio-favorites
50. The Big Short by Michael Lewis
reader: Jesse Boggs
published: 2010
format: 9 hr 29 min digital audiobook and 266 page hardcover
acquired: borrowed both from my library
read: listened to 87% May 5-17, read last 66 pages Aug 15-16
rating: 4 stars

In a nutshell, this about the bastards who got rich on the 2008 US subprime mortgage crash. Lewis is a really good at this stuff, so we learn to really like all these guys, as unpleasant as some of them are, and we learn to appreciate all the effort and kn
Dec 06, 2017 rated it it was amazing  ·  review of another edition
The moral of this story is that people will see what they are paid to see and that if they are incentivized not to see the truth, they won't. That was the situation described by Michael Lewis. It was the experts who failed us again. It was one guy with Asperger's Syndrome (which may have given him a huge advantage since the condition does help one to focus intensely) who realized that the banks, in making negatively amortized mortgages, were creating a situation to would inevitably fail. He deci ...more
Sairam Krishnan
Jan 13, 2016 rated it really liked it  ·  review of another edition
Reread 1.

I first read The Big Short in 2012, fresh from Business School. It's important to note that I went to a different sort of school - a residential campus that leaned (sometimes alarmingly) to the left, and took great pains to instil in its students an ethical way of going about life. And coming from there, I read The Big Short as a vindication of what my professors had been trying to teach me. I enjoyed it, but I also knew and understood that somewhere in the story was a sceptre of cynic
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  • All the Devils are Here: The Hidden History of the Financial Crisis
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  • 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
  • Crisis Economics: A Crash Course in the Future of Finance
  • Lords of Finance: The Bankers Who Broke the World
  • Fool's Gold
  • The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash
  • Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon
  • On the Brink: Inside the Race to Stop the Collapse of the Global Financial System
  • A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
  • The End of Wall Street
  • The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History
  • The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
  • Confidence Men: Wall Street, Washington, and the Education of a President
  • Den of Thieves
  • Conspiracy of Fools
  • Freefall: America, Free Markets, and the Sinking of the World Economy
  • A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers
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.

Other books in the series

Liar's Poker (2 books)
  • Liar's Poker
“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.” 47 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.” 23 likes
More quotes…