The Big Short: Inside the Doomsday Machine

by Michael Lewis

Overview

The #1 New York Times bestseller: "It is the work of our greatest financial journalist, at the top of his game. And it's essential reading."—Graydon Carter, Vanity Fair

The real story of the crash began in bizarre feeder markets where the sun doesn't shine and the SEC doesn't dare, or bother, to tread: the bond and real estate derivative markets where geeks invent impenetrable securities to profit from the misery of lower- and middle-class Americans who can't pay their debts. The smart people who understood what was or might be happening were paralyzed by hope and fear; in any case, they weren't talking.

Michael Lewis creates a fresh, character-driven narrative brimming with indignation and dark humor, a fitting sequel to his #1 bestseller Liar's Poker. Out of a handful of unlikely-really unlikely-heroes, Lewis fashions a story as compelling and unusual as any of his earlier bestsellers, proving yet again that he is the finest and funniest chronicler of our time.

Product Details

ISBN-13:	9780393338829
Publisher:	Norton, W. W. & Company, Inc.
Publication date:	02/01/2011
Pages:	320
Sales rank:	34,582
Product dimensions:	5.36(w) x 8.16(h) x 0.80(d)

About the Author

Michael Lewis is the best-selling author of Liar’s Poker, Moneyball, The Blind Side, The Big Short, The Undoing Project, and The Fifth Risk. He lives in Berkeley, California, with his family.

Date of Birth:

October 15, 1960

Place of Birth:

New Orleans, LA

Education:

Princeton University, B.A. in Art History, 1982; London School of Economics, 1985

Table of Contents

Prologue Poltergeist xiii

Chapter 1 A Secret Origin Story 1

Chapter 2 In the Land of the Blind 26

Chapter 3 "How Can a Guy Who Can't Speak English Lie?" 61

Chapter 4 How to Harvest a Migrant Worker 85

Chapter 5 Accidental Capitalists 104

Chapter 6 Spider-Man at The Venetian 136

Chapter 7 The Great Treasure Hunt 160

Chapter 8 The Long Quiet 179

Chapter 9 A Death of Interest 200

Chapter 10 Two Men in a Boat 226

Epilogue Everything Is Correlated 253

Afterword 265

Acknowledgments 269

Index 271

What People are Saying About This

Dick Durbin

I’ve joined a lot of other people in just finishing Michael Lewis’s book, The Big Short, and it’s really an eye-opener of what was going on at the time that this real estate bubble was created.

Carl Levin

I read it, marked it up for my staff, underlined it, made copies and asked them to read it.

Harry Reid

I recommend everyone within the sound of my voice to read [this] book.

Jackie Speier

[A]n incredible piece of commentary on Wall Street.

Byron Dorgan

If you’re wondering if there’s importance or an urgency to this issue, read the book The Big Short by Michael Lewis, and then, when you’re finished reading, come back to the floor and say that you support this amendment [on financial reform].

Editorial Reviews

Unfortunately, truth frequently outflanks fiction. The most glaring recent of that is, of course, the Recession of 2007-2008, a catastrophic domino-fall set in motion by the actions (and conspicuous inactions) of an embarrassing number of players and regulators. In The Big Short, Moneyball author Michael Lewis tracks these long-festering events with precise details and macabre wit, revealing how self-serving myopia and naked greed fueled the most catastrophic economic crisis since the Great Depression. A Barnes & Noble Bestseller in hardcover; now in paperback and NOOKbook.

If you read only one book about the causes of the recent financial crisis, let it be Michael Lewis's, The Big Short…What's so delightful about Lewis's writing is how deftly he explains and demystifies how things really work on Wall Street, even while creating a compelling narrative and introducing us to a cast of fascinating, all-too-human characters…The Big Short manages to give us the truest picture yet of what went wrong on Wall Street—and why. At times, it reads like a morality play, at other times like a modern-day farce. But as with any good play, its value lies in the way it reveals character and motive and explores the cultural context in which the plot unfolds.
—The Washington Post

Steven Pearlstein

No one writes with more narrative panache about money and finance than Mr. Lewis, the author of Liar's Poker, that now classic portrait of 1980s Wall Street. His entertaining new book does not attempt a macro view of the financial crisis, but instead proposes to open a small window on the calamities by recounting the stories of some savvy renegades who cashed in on their conviction that the system was rotten…Mr. Lewis does a nimble job of using his subjects' stories to explicate the greed, idiocies and hypocrisies of a system notably lacking in grown-up supervision, a system filled with firms that "disdained the need for government regulation in good times" but "insisted on being rescued by government in bad times."
—The New York Times

Michiko Kakutani

Since his first book, the autobiographical Liar’s Poker, Lewis has tackled big, engaging stories…by finding and developing characters whose personal narratives reveal a larger truth. He's done it again. The story of the crash is, overwhelmingly, a tale of failure. But Lewis managed to find quirky investors who minted fortunes by making unpopular, calculated bets on a financial meltdown. Ditching the aloof irony of his earliest works, he constructs a story that is funny, incisive, profanity-laced and illuminating—full of difficult-to-like underdogs whose vindication and enrichment we end up cheering.
—The New York Times Book Review

Daniel Gross

Although Lewis is perhaps best known for his sports-related nonfiction (including The Blind Side), his first book was the autobiographical Liar's Poker, in which he chronicled his disillusionment as a young gun on Wall Street in the “greed is good” 1980s. He returns to his financial roots to excavate the crisis of 2007-2008, employing his trademark technique of casting a microcosmic lens on the personal histories of several Wall Street outsiders who were betting against the grain—to shed light on the macrocosmic tale of greed and fear. Although Lewis reads the book's introduction, narration duties are assumed by Jesse Boggs, a veteran narrator of business titles (including Lewis's own 2008 book Panic!). Boggs's rich baritone is well suited to the task and trips lightly through a maze of financial jargon (CDOs, derivatives, mid-prime lending) and a dizzying cast of characters. Lewis returns on the final disc for a 10-minute interview about the crisis's aftermath, including a savvy assessment of the wisdom of the financial bailout and where-are-they-now updates on the book's various heroes and villains. A Norton hardcover. (Mar.)

Publishers Weekly

"If you’re wondering if there’s importance or an urgency to this issue, read the book The Big Short by Michael Lewis, and then, when you’re finished reading, come back to the floor and say that you support this amendment [on financial reform]."

Senator Byron Dorgan (D-North Dakota)

"I read it, marked it up for my staff, underlined it, made copies and asked them to read it."

Senator Carl Levin (D-Mich.)

"I’ve joined a lot of other people in just finishing Michael Lewis’s book, The Big Short, and it’s really an eye-opener of what was going on at the time that this real estate bubble was created."

Senate Majority Whip Dick Durbin (D-Ill.)

"Superb: Michael Lewis doing what he does best, illuminating the idiocy, madness and greed of modern finance…Lewis achieves what I previously imagined impossible: He makes subprime sexy all over again."

Salon.com - Andrew Leonard

"No one writes with more narrative panache about money and finance than Mr. Lewis....[he] does a nimble job of using his subjects’ stories to explicate the greed, idiocies and hypocrisies of a system notably lacking in grown-up supervision....Writing in faintly Tom Wolfe-ian prose, Mr. Lewis does a colorful job of introducing the lay reader to the Darwinian world of the bond market."

The New York Times - Michiko Kakutani

"[A]n incredible piece of commentary on Wall Street."

Rep. Jackie Speier (D-Calif.)

"I recommend everyone within the sound of my voice to read [this] book."

Senate Majority Leader Harry Reid (D-Nev.)

"One of the best business books of the past two decades."

Malcolm Gladwell

"One of the best business books of the past two decades."

New York Times Book Review - Malcolm Gladwell

Versatile best-selling author Lewis (Panic) gives a different take on the 2007-08 credit crisis as he chronicles how a handful of investment managers detected early on the growing bubble in the mortgage bond market and made fortunes betting against it. Lewis is a storyteller, and he weaves the personal stories of these renegades against the inner workings of Wall Street's mortgage-backed securities money machine. He explains in plain language how the industry obscured credit risk by packaging and repackaging low-quality subprime mortgages into complicated securities that could receive high credit ratings in a process he calls the financial alchemy equivalent of turning lead into gold. He says investors then looked at little more than the ratings as they bought billions of dollars' worth of these supposedly safe bonds. Lewis turns the crisis into a true financial thriller that screams of Wall Street's greed, recklessness, deceit, incompetence, and hubris. VERDICT Readers from generalists through specialists will find this fast-paced, engaging account both illuminating and disturbing. Highly recommended. [See Prepub Alert, LJ 11/1/09.]—Lawrence Maxted, Gannon Univ. Lib., Erie, PA

Library Journal

Much of what caused the recent financial crisis is buried in complicated financial transactions and shady accounting practices. This book does an outstanding job of demystifying the schemes that led to the meltdown. As such, it’s an accessible history of the period from 2005 to 2008, when the housing market imploded. Narrator Jesse Boggs has a pleasant, informative voice that conveys the book’s ideas but misses the author’s tone of outrage. Boggs’s pitch does rise as the story becomes more outrageous, but his energy level still remains too low for the compelling nature of the events he recounts. His pacing and diction are excellent, and his decision to underplay the characters allows the debacle itself to take center stage. Nonetheless, one can’t help wishing for a more forceful delivery. R.I.G. © AudioFile 2010, Portland, Maine

APRIL 2010 - AudioFile