three-and-half-stars
Bookmarks Issue: 
46-May-June-2010
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Inside the Doomsday Machine

A-The Big ShortBestselling finance writer Michael Lewis is the author of Liar's Poker, Moneyball, an analysis of arcane player statistics and financial strategies in Major League Baseball, Next: The Future Just Happened, and The Blind Side ( 3.5 of 5 Stars Jan/Feb 2007), the rags-to-riches story of football player Michael Oher. The Big Short offers a maddening post-mortem on America's economic downturn.

The Topic: Told through the eyes of three hedge-fund managers and a bond salesman, The Big Short gives a blow-by-blow account of the unraveling of the American economy. While many Americans still feel the pinch of a burst housing bubble, among other financial disasters, certain investors made extraordinary sums on "shorts"--bets against a thriving economy--by using financial instruments that even insiders don't fully understand. In some cases, those bets were worth many hundreds of millions of dollars. "It's too much to expect the people who run big Wall Street firms to speak plain English," Lewis writes of his attempt at getting straight answers from his subjects, "since so much of their livelihood depends on people believing that what they do cannot be translated into plain English."
Norton. 288 pages. $27.95. ISBN: 9780393072235

Boston Globe 4 of 5 Stars
"Lewis brilliantly takes us inside the sub-prime mortgage industry, showing how mortgage companies, homeowners, ratings agencies, and Wall Street traders had incentives to cheat and then consciously ignore the ugly truth. ... Lewis has accessibly and expertly described a broken financial system that rewards bad decisions and fraudulent alchemy (turning garbage into gold), then shifts the inevitable losses to the strapped [U.S.] taxpayer." Chuck Leddy

Times (UK) 4 of 5 Stars
"Amid the fizzy reportage, Lewis explains what went wrong on Wall Street, showing how mortgage companies, homeowners, ratings agencies and traders created a system that encouraged them to cheat to get rich on bad debt and then consciously ignore the inevitable losses. ... If you want to know how a nation lost its financial mind--and have a good laugh finding out--this is the book to read." John Arlidge

Washington Post 4 of 5 Stars
"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." Steven Pearlstein

New York Times 3.5 of 5 Stars
"[Lewis's] 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. ... 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." Michiko Kakutani

Entertainment Weekly 3 of 5 Stars
"The Big Short doesn't seem to be as nicely sourced as Poker, but its narrative has the same seat-of-your-pants, almost breathless feel. Still, the bottom line is that this is not the first book on the hot-button topic, and it's not the best, either." Tina Jordan

Pittsburgh Post-Gazette 2 of 5 Stars
"This anecdotal history of the crisis is entertaining, to a point, but Mr. Lewis struggles to integrate the quirky stories with explanations of the complex process that brought the economy to its knees. ... The result is both frustrating and unimpressive, more of a quick-hit account of images rather than an in-depth analysis." Bob Hoover

Critical Summary

Michael Lewis has written from the perspective of a financial insider for more than 20 years. His first book, Liar's Poker, was a warts-and-all account of Wall Street culture in the 1980s, when Lewis worked at the investment bank Salomon Brothers. Everything Lewis has touched since has turned to gold, and The Big Short seems to be another of those books, combining an incendiary, timely topic with the author's solid, insightful, and witty investigative reporting. Only the Pittsburgh Post-Gazette criticized what it felt was a rush job of writing and a failure to integrate the individual stories. Few readers will care for the message here (despite laugh-out-loud moments of absurdity), but Lewis is a capable guide into the world of CDOs, subprime mortgages, head-in-the-sand investments, inflated egos--and the big short. However, as Entertainment Weekly points at, if you're only going to read one book on the topic, perhaps this should not be the one.