Book review of Michael Lewis’s The Big ShortPosted: 08/07/2010
Michael Lewis is one of the best storytellers around, and he brings his writing gifts to the arcane world of economics. His catalogue features the classic Liar’s Poker, as well as Moneyball and The Blind Side, where he analyzed two of our most poplar pastimes through his economic lens. Lewis tells the human story brilliantly; not only do you learn how markets work or don’t work, but you see how it affects the actors from an emotional level as well. In short, even for the layman, Lewis conveys deep economic truths about complex matters, effortlessly.
There have been many attempts to catalog the Great Economic Crisis of 2008 thus far, from brilliant economists and journalists. However, Michael Lewis’s The Big Short probably captures the most essential part, in his trademark fashion. Lewis takes us inside the lives of the outliers who foresaw the Mortgage Bubble inflating, and bet all their chips against all of Wall St. and our economic paradigm at a time when almost no one agreed with them. The characters in this story spring to life as if out of a great novel, but given the fact that this story is still so recent, the raw emotions of the events are still affecting them, as well as the reader.
Hindsight is 20-20, but it is too easy to look back at Michael Burry, the unlikely head of Scion Capital, who first predicted this catastrophe back in 2003, and wonder, why didn’t we all see this coming? Of course for Burry, Steve Eisman, Greg Lippmann, and the few that made a fortune when the bubble popped, this was not an easy payday. They struggled with their bets, both in the face of skepticism and in their unwillingness at times to believe that the powers that be would really let the subprime mess happen. Once Bear Sterns failed in 2008, and the dominos started falling, the events happened fast, and the heroes in this story were left wondering if the country would even survive.
Lewis captured the heart of the biggest story of our time. This book is a great pleasure to read, even through we are all still suffering the consequences of the crisis. This may be his best book yet.