There’s a cottage industry now in publishing books that “explain” the U.S. and global economic meltdown. The best book about this phenomenon that I’ve read so far is Michael Lewis’ The Big Short: Inside the Doomsday Machine (Norton, 2010). Lewis, who worked on Wall Street, is the perfect guide to the Byzantine world of bond traders. That’s where the economic meltdown started. Yes, Lewis is able to tell you what a credit default swap is, unlike the Wall Street types Michael Moore interviewed in Capitalism: A Love Story who couldn’t. Lewis’ innovative approach to telling his story is to concentrate on the people who figured out sub-prime mortgages were toxic and made millions of dollars betting against them! If you want to understand the financial collapse we’ve just been through, and will be living with for years, The Big Short is the perfect place to start. GRADE: A.
(Thanks to the North Tonawanda Public Library for providing this book.)
“Lewis’ innovative approach to telling his story is to concentrate on the people who figured out sub-prime mortgages were toxic and made millions of dollars betting against them!”
We should add: while they were selling them as solid investments to their clients.
You’re right, Deb, Goldman Sachs and several of the other investment banks were playing both ends against the middle. They were both buyers and sellers of credit default swaps. Anything to make a buck.
I have MONEYBALL around here somewhere but anything about money goes right over my head.
Michael Lewis focuses on the people involved in these financial shenanigans, Patti. My favorite is the guy with the glass eye who no one would listen to when he warned them about toxic real estate deals.
MONEYBALL was indeed worth reading, especially if you’re interested in baseball. I still haven’t read THE BLIND SIDE yet either.
I’ve read all of Michael Lewis’ books, Jeff, including his weak book on fatherhood, HOME GAME: AN ACCIDENTAL GUIDE TO FATHERHOOD. He’s an engaging writer. Lewis’ strength in THE BIG SHOT is his ability to explain complex financial instruments.
I have been on the library waiting list (and same on bookswap) since I first heard about this one many months ago. I’m about 200th in line, I think. They must have decided to only buy 2 copies or something. I will eventually get to read it, but by then it could be decades old news.
I don’t think the story Michael Lewis tells in THE BIG SHORT will become dated, Rick. It’s all about greed and hubris. When you’re making $100 million a year, you believe you can’t make a mistake. THE BIG SHORT is one of the best books of the year.