Review: The Big Short

The full title of Michael Lewis’s book about the 2008 financial crisis is The Big Short: Inside The Doomsday Machine, which is a little melodramatic.  But not much.

Lewis has made a career out of explaining fairly complicated numbers games and how they impact people’s real lives.  He’s taken on the stats geeks in baseball and Wall Street in earlier books that I haven’t read, but if The Big Short is any indication, Moneyball should be on my list soon.

Lewis dives into the shenanigans that drove the housing crisis with the knowledge of an insider and the eye of a journalist.  He covers the tricky financial instruments in enough detail that one can clearly see the amazing disregard for risk and greed for profit that pulled the bandwagon forward, but at a high enough level that the mathematics is never daunting.  If you want to understand the gears that inflated the bubble and the cords that tied all the banks together when it burst, this will explain it to you.

In addition to knowing and communicating the technical details, he assembles an interesting cast of characters who were working out the problems in real time.  It may surprise you that there were such people, but it’s a big world.  He does a good job bringing them to life and using their stories to tell the larger one that we all saw unfold.

Overall this is an indispensable book in understanding the recent financial crisis, and one that tells the story with clarity and wit.

Strongly Recommended.

Comments are closed.