A few savvy investors realized that they could potentially make a lot of money by shorting subprime mortgages.
My thoughts
I don't have a background in finance, but Michael Lewis makes a very complicated topic easy and entertaining for laymen to follow. I read this as a follow-up to Lewis's Boomerang, and both have whetted my interest in other books on the financial meltdown. I'm a bit late on this—after all, the market crashed in fall 2008. But the fact that it was so long ago gives me some added perspective. I know what happens next, even if my memories of the collapse of Lehman Brothers and the ensuing chaos are a little hazy. The real treat of this book is getting into the meat of what happened before all hell broke loose.
Lewis has become one of my favorite non-fiction writers, and it's because of the way he can take boring, complicated topics and make them relatable and funny. He does this by writing about the eccentric men who independently clued into the impending crisis. He gives you someone to root for—if not an everyman, then an underdog. It's not a blow-by-blow account from the financial institutions' point of view, but it's interesting to read about the people who accurately predicted the crisis, especially since some of them were denounced as crazy or were not taken seriously before it happened.
Looking back, it's easy to wonder who thought the doomed financial model was a good idea, but Lewis reminds us that it was so large and complex that it was hard to see the whole big picture. It's also scary that—apparently—no one broke any laws. Since 2008, there has been some legislative action (in the form of Dodd-Frank), but there hasn't been much else—or much demand for it. So there are some new safeguards in place, but they are limited and they still leave Wall Street to police itself and show restraint.
One note not about the book itself: I read this on my brand new Kindle and liked it quite a bit. I was annoyed that I was constantly turning pages, but I did like how light it felt in my hands (and in my purse). I used the Kindle Owners' Lending Library to borrow the book and I'd definitely do that again.
Bottom line
A compulsively readable account of the spectacular failure of the financial system.
Fine print
The Big Short, by Michael Lewis
Genre: non-fiction, current events, finance
Photo from Goodreads
I borrowed this book from the Kindle Owners' Lending Library.
