“The Big Short: Inside the Doomsday Machine” by Michael Lewis
Reviewed by Emerson Clauss
Uncovering maybe the biggest catastrophic event of the 21st century, the Wall Street fall and the financial chaos it spurned, THE BIG SHORT sums it up to a tee. The book not only exposes the events and characters involved, author Michael Lewis explains, for those of us who possibly don’t understand a stock from a bond, many of the other hinkey products Wall Street peddles to investors of all kinds. For a seemingly fact filled set of circumstances, he makes this book interesting, intriguing and hard to put down.
Stemming from it’s origination in the early and mid-eighty’s, Lewis explains what derivatives are and how they are sold, traded and moved around the financial firms of the US and the world. He details what “Credit Default Swaps” are and how they came to be, and more importantly how they came to be abused. His explanations leave you feeling, rightfully so, as if it’s a large game of musical chairs… and the music just stopped.
He introduces us at first to a most unlikely small cast of characters, really outside of Wall Street and the big banks. They discover this unnatural set of facts and circumstances created in the financial world, that they themselves find incredible. And no one inside the financial world seems to notice or correlate this with the impending doom of the US financial system or problems created around the world.
We may feel we know the outcome of this story, but it is an unbelievable journey to unravel with Lewis and follow the events that lead to this catastrophe. Michael does not miss the fact that the laws that govern the trading and securities, to date have not yet been changed, altered or strengthened. This has the effect today, of leaving the Fox at the door of the Henhouse, while the rest of us are outside looking on and paying the tab.
Lewis doesn’t fail to show our Government’s total lack of oversight or failure to foresee this or to do anything to stop the madness. He shows how we (The US Taxpayers) stepped in to bail out irresponsible firms of all kinds, and end up buying their losses at 100 cents on the dollar. The Losers and Winners alike, made fortunes. The US Taxpayer just got skewered, again.
The facts and details are astounding. The cast of characters would be almost comical, if this weren’t true or didn’t represent a major malfunction of our “financial system”.
The book is a must read, if you want to uncover the truth about the depth of Corporate Greed, personal greed and how inept our government is to recognize or reel any of it in. “Definitely worth the price of the ‘ticket’”.
Author: Michael Lewis
Publisher: W.W. Norton & Company
Published: March 2010