What are the odds that people will make smart decisions about money if they don’t need to make smart decisions—if they can get rich making dumb decisions?
The Big Short : Inside the Doomsday Machine
By Michael Lewis
From the jungles of the trading floor to the casinos of Las Vegas, the Big Short tells the outrageous story of the misfits, renegades and visionaries who saw that the biggest credit bubble of all time was about to burst, bet against the banking system – and made a killing.
The American economy is still deeply effected by the late 2000’s financial crisis that will go down as one of the worst in history, and this book is the story of that burst. It is the telling of the flawed and criminal system that allowed such a thing to happen, and how the phrase “no one saw it coming” is patently false.
Michael Lewis narrates the history of the collapse through the eyes of a handful of men who through luck, obsessive research, or good timing predicted that the housing bubble was about to burst. He outlines the stupid decisions, willful ignorance, and downright fraud that contributed to the tragedy, which is outlined in a way accessible to readers of all points of economic understanding. I will not even attempt get into the intricacies of the situation, and Lewis defines and explains the process far better than I could ever hope to.
The author pieces this story together through a combination of instructional, informative segments and personal narratives. Not only do you learn about the involvement of the various investors, but you learn their personal histories as well. Those anecdotes help to humanize the text, and also provide perspective on the participants and where they are coming from. Some of them are also downright amusing, light spots in a tale that is often grim or rage inducing otherwise.
The Big Short was a fascinating look at an event that has shaped modern economics as well as politics. It is also a damning and depressing statement on the baffling stupidity of the system that allowed such a thing to happen. I would recommend this to anyone who wishes to know more about modern history and politics. Just be prepared to get really outraged. If you’ve seen the film based on the book (which is excellent, by the way) I hit Steve Carrell levels of the emotional gamut.
Summary from Goodreads