The Big Short by Michael Lewis is a distinctly hilarious account of the rather unfunny topic of the 2008 market crash. Interweaving and retelling the accounts of his colorful cast of money managers: Steve Eisman and his team of Danny Moses and Vincent Daniel, Michael Burry, and Charlie Ledley and Jamie Mai, Lewis takes his reader behind the scenes and into the world of Wall Street from 2005 through 2008.
Lewis did have biases, however. He was convinced that everyone on Wall Street was either a crook or an idiot with no idea what he or she was doing. He had an overall unfavorable view of the system, and was pre-disposed to look for flaws and corruption, and to root for the underdog. This was evident in the people he chose to profile. In fact, the entire basis of the book is a look at the financial collapse from the point of view of those who went against popular opinion and saw it coming. That perspective does not lend itself well to an overly favorable view of Wall Street. In fact, it is revealed at the end of the book that Lewis had previously written a book about his brief period on Wall Street in the 1980’s called Liar’s Poker, that had, to put it one way, caused some headaches for his former bosses.
All together, the reader is left with one overarching theme: The world, Wall Street in particular, is ridiculous, complicated, and unfair. While this book is far from an uplifting, feel-good read, it is also not too discouraging. The intensely character based story helps to off-set some of the potential for it to be boring and depressing. All of the characters were hilarious, from unfiltered remarks by Steve Eisman, to the out of place Californians of Cornwall Capital, they all struck it rich by going against the grain at the right time. Naturally, the kinds of people willing to bet against what everyone else is assuring them is true are a tad eccentric. They also make for a great story.
The financial instruments discussed in the book are quite opaque, but Lewis explains them very clearly. He also makes sure to explain everything multiple times, so if it doesn’t make sense at first, the reader gets a second chance. By the end, I felt confident that I had at least a decent understanding of the sub-prime mortgage market, CDOs and credit default swaps. As a non-fiction book, the 250 pages take longer to read than a novel, but I did not feel that it was too long. I would recommend this book to anyone, no matter his or her background in finance, who has an interest in reading about the market collapse of 2008.
(A quick word of caution: this book contains adult language, and may not be suitable for teens interested in finance.)