The Big Short: Inside the Doomsday Machineby Michael Lewis
Norton, 2010. 266 pgs. Non-fiction.
The love of money certainly turns out to be the root of quite a lot of evil, as we learn from Michael Lewis's latest book. Dim-wittedness played its part as well. Lewis begins the book with a prescient quote from Tolstoy: ". . . the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him." What was laid before the corporations engaged in dealing subprime mortgages on $750,000 dollar homes to strawberry pickers making $14,000 a year was that at some point the market would implode. What they could not see--because it was judged impossible that it could ever happen--was the scope of the catastrophe if a global house of financial cards was built on the foundation of a subprime mortgage bond market. Lewis personalizes his international story by telling it through the eyes of several independent dealers who saw what was coming and against all logical odds, made fortunes for themselves and their clients by trading in credit default swaps. Although the reader knows the end from the beginning, The Big Short still crackles with suspense, thanks in large part to Lewis's authorial skills and the tension between how things should have been, and how they were. Or are, alas.
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