The Big Short
Ratings174
Average rating4.2
Having already watched the film based on this book I knew what to expect going in. Nonetheless I was very much interested throughout, especially the sections following Michael Burry. I must admit that most of the Wall Street jargon was still going over my head even by the end of the book, although I read this in one sitting on a flight which may well have affected my comprehension.
Context: The movie based on the book is one of my favourites, and that definitely coloured my perspective and set my expectations high.
The writing is just ok. Michael does a good job bringing the characters to life, allowing the reader to more easily keep track of everyone involved. But he comes off a bit insensitive with Michael Berry's (MB) Aspergers. Towards the end of the book he spends a lot of time sort of teasing the reader and building suspense towards the reveal, but the reveal ends up being pretty much meaningless. Readers who are familiar with the autism spectrum will have already guessed/suspected the diagnosis and it serves little to no purpose to the reader aside from giving more context to MB's behaviour.
That being said, that complaint is pretty nit picky. It's an entertaining enough read and the events the book is based on are absolutely fascinating in a morbid way. If you've watched the movie there is little reason to read this book aside from getting a slightly better understanding of the nitty gritty details.
Overall, the investigation into the 2008 crisis is great. But if you're expecting a brilliant novel-like narrative like John Carreyrou's 2018 book on the Theranos scandal(Bad Blood) , you might be slightly disappointed.
The book gets quite repetitive about certain aspects when the author draws parallels in the stories of a few people.
Probably a 3.5.
The tale is frightening, the telling of it a touch messy at times. The jargon - frustrating.
For those who have seen the movie based on this book, I still think it is in your best interests to read the book. It's fascinating, to put it mildly. This isn't exactly a story where I can ruin the ending: the big investment banks created derivative products called CDOs based on subprime (meaning unlikely to be paid back) mortgages. The CDOs were insured (mostly by AIG) by Credit Default Swaps, and AIG and others happily allowed people without any investment in CDOs to buy Credit Default Swaps on their own (basically allowing the creation of a derivative of a derivative, the synthetic CDO). The financial rating institutions, like Moody's and Standard and Poor's, rated these CDOs as AAA, which meant that insurance companies and retirement funds could invest in them. (As a note: AAA means as safe as a government bond, and therefore, riskless). This was a catastrophe waiting to happen and it appears that the banks really had no idea what they were doing, despite being warned by at least a few people. While this all sounds very technical, Lewis manages to make it entirely understandable.
This is essentially a story about what happens when we let our financial institutions run amok through deregulation. Deregulation began with Reagan, and then continued onwards through the Bush Sr, Clinton, Bush Jr., and Obama administrations (I can only imagine it will continue through the Trump administration as well). This book is a perfect story of a perfect storm, and if it is missing anything, it is a call to action. But I think the call to action is implied by the very nature of the events Lewis describes.
I think I only understood about 30% of this book. That's not a criticism of the book, more a caveat of my review. But it was interesting how much time was spent emphasizing how nobody could understand CODs, credit default swaps etc, and then assuming I understood it.
The overarching plot was interesting and I liked the writing style but I kept waiting for it all to click and the Big Short to be laid bare ... and then it was over. I was left with the understanding that yeah, everything they'd bet on had I guess come true and that was bad and also I must be pretty dense to have made it all the way through this book without really understanding some of the key issues.
I'd probably look them up if I were on my kindle but I listened to this on Audible. I should probably go back and fill in the gaps.
Tl;dr - probably a good book that deserved a more informed audience than me.
I had so much fun reading this book. What a roller coaster. What a disgusting, repulsive, terrifying, fascinating roller coaster.
“How do you explain to an innocent citizen of the free world the importance of a credit default swap on a double-A tranche of a subprime-backed collateralized debt obligation?” - Michael Lewis did it pretty well!
Michael Lewis launches his book with a simple concept: with all the losses at the major Wall Street investment banks, who could have foreseen the impending collapse and shorted the investment firms themselves to make an unprecedented return? Among others, he finds a one-eyed financial trader with Aspergers who had the singular focus to see what all of Wall Street refused to see: the explosion of subprime mortgages, the collusion of the rating agencies in promoting CDO's, and the mind-boggling risks and returns on credit default swaps left the entire financial system at a precipice. Lewis tells the stories of a few men who bet on the collapse of the system, and through their experiences unravels the complex web created by the financial firms to pad their profits and to conceal their risks.The greatest outrage of the collapse is not that it could have been foretold: it was.
Zelo berljiva zgodba o nekaj redkih vlagateljih, ki so predvideli financno “subprime” krizo 2008.
Too Big to Fail was written by a reporter and it was much more about what happened. Michael Lewis doesn't pull any punches with his thoughts on who he thinks is to blame and what he thinks of them in The Big Short.
I liked this a lot, and some of that is no doubt because I agree with Lewis on a number of points.
Essential reading for understanding the 2008 financial crisis, without getting into the political recriminations.