Book Review: The Big Short
by Michael Lewis


In June 2007 the American financial services sector, Wall Street in particular, was about to be jolted from its self-supposed omnipotent perch. The long and fruitful hibernation of its top-brass was ending as the greatest credit black hole ever created collapsed in upon itself. As Wall Street insulated itself from reality with ever increasingly profit margins , a seemingly trivial band of "misfits, renegades and visionaries" toiled countless hours to disprove the fallacy upon which the credit bubble had been built, and which would eventually prove to be its demise. The Big Short is their story. The story of their wisdom and foresight, their worries and doubts, and ultimately their conviction to bet against a system rotten to its core.

The protagonists of the story form three major groups, the fate of each unwittingly and solely joined by their perception of the U.S. Financial System and their incredible bets against it. In Cupertino, California a "one-eyed Aspergers sufferer" Michael Burry ploughs a lone furrow for what he hopes will be the makings of a great fortune, but of even greater importance; recognition of his existence by a society from which he has long been ostracised. Meanwhile, Charles Ledley and James Mai create Cornwall Capital from their garage in Berkley, California and quickly make a small fortune before inviting Ben Hockett to join their venture as they make an assault on the big-time and uproot to Wall Street. And finally, New York native Steve Eisman and his assistant Vincent Daniel from Queens set about righting a wrong; namely the injustice of the entire sub prime mortgage sector, and making a fortune in doing so.


As Lewis acknowledges in the book's Afterword, this is a narrative he is not used to telling. Whereas, he concludes, the stories he is accustomed to writing are essentially comic in nature, the story of the U.S. Financial System's collapse and the millions of lives it would devastatingly affect; was undeniably a tragedy. To his extensive credit he has managed to redeploy the literary Midas touch with which he is blessed, with the aplomb we have become accustomed to in previous works. The book, while littered with an unavoidable number of financial terms; instruments; abbreviations and concepts, attempts to remain true to its origin as a story and not a financial guidebook. At times navigation of the technical undergrowth that seeks to devour the story can be arduous, and for a graduate of an economics and finance degree, tinged with a little guilt! It is Lewis' greatest achievement, however, that, for the most part, what should feel like trudging through quicksand feels predominantly like the skimming of a stone on water. Only fleetingly and out of necessity is the reader submerged in the intricacies of the financial system . The author and the story carries the reader over the treacherous obstacles which might otherwise serve to make the book monotonous, perplexing and ultimately unappealing. By telling a tale of such financial woe & deception from the perspective of the protagonists the story retains a human feel, which provides a striking contrast to the moral vacuum described in the corridors of Wall Streets finest institutions. It is this that compels the reader to root for the likes of Eisman in a manner we would not usually do so. The protagonists are no longer financial analysts and bond traders to the reader, but crusaders against the will of a crooked system. While the author may contend that his book tells "a real life story so good that only its author could screw it up", I would offer the opinion that only a writer as talented as he could make the murky, arcane waters of high finance sufficiently clear as to be enjoyable for those of us not accustomed with the discourse of Wall Street.


Buy, Borrow or Burn?


If you have an interest the reality of a world you've lived in since mid 2007, and what went before to bring it to pass, its...


Buy!