The Big Short by Michael Lewis
August 2nd, 2010Title: The Big Short
Author: Michael Lewis
Publisher: W.W. Norton (2010)
Hurray for another Michael Lewis book! As long time readers of Letters on Pages might (but probably don’t) remember, Michael Lewis is my favorite non-fiction author. I have reviewed one recent book of his already. So there wasn’t much chance of me NOT liking this book. That said, I actually held off on reading it for a while because I wasn’t sure I wanted to read yet another book about the subprime mortgage disaster. But I was interested to hear what Lewis, a former Wall Street trader, had to say. Fortunately, as he usually does, he took a different viewpoint to write through.
The Big Short: Inside the Doomsday Machine by Michael Lewis is fantastically written look at the recent financial crash from an alternative viewpoint. Lewis wrote about the very few number of professional money managers who saw this coming even before the crash started to happen. And the fact that they saw it coming meant they could prepare for it…and made BILLIONS of dollars off of it.
It is kind of funny because his protagonists made a ton of money off of the deals, which means they were hoping the collapse WOULD happen! This is mentioned in the book…and to be fair to the traders…I don’t think they really wanted the crash to happen. I think that they saw it coming and no one else did. so they decided that if it definitely was going to happen, at least they could make a ton of money on it!
Apart from the arbitrage that these traders discovered, it was really interesting to read, with the benefit of hindsight, how arrogant most traders were. All they saw was a way to make money really fast, and didn’t appear to care about any consequences. As long as they made their profits…who cares! (By the way – these people kept all the money they made…it was the companies that they worked for that took the hits).
The only downside to the book was that there is an awful lot of finance verbiage, which gets a bit overwhelming for a dummy like me. But this is an excellent book and I would recommend it to anyone who has the smallest interest in what happened.
Rating: 4.5 out of 5
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Disclosure: I received a free review copy of this book and this post contains affiliate links.
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