Michael Lewis is one of our most compelling, original chroniclers. He combines instinctive storytelling and fascination with the hidden interstices of the human world. All his books are gorgeous reads but it’s when he explores and explains conceptual material that he soars. And in The Big Short: Inside the Doomsday Machine, he has a sublime notion to play with. The result astounds.
The GFC sprang upon the world as a huge shock, yet dozens of books since insist that the crash was quite predictable. Lewis tackles the question of cause from the most original angle of all, by focusing on those rare financial players who bet money – hefty licks of money – against the herd. A fascinating set of mavericks and misfits spent the years before the GFC seeking ways to make fortunes by gambling that the boom would turn to bust: a rebel with no social skills, a bunch of newbies with one good idea, a recluse with Aspergers, a glib salesman with brains. Lewis burrows deep into their lives, dovetailing their almost unbelievable stories as the storm approaches.
Throughout what reads like a Matthew Reilly thriller, Lewis gradually explains, evocatively and clearly, the intricacies of mortgages, derivatives, collateralized debt obligations, sub-prime, and the interlocked financial markets. In the process, his portrayal of the money world is staggeringly simple: yes, there was evil afoot, but most of the supposedly ‘perfect’ market were simply thick and driven insane by greed.
The Big Short is the one account of the global financial crisis you simply must read, and it’s my pick for best book, nonfiction or fiction, of 2010 so far. 4½ stars.