If you want to really understand what was so badly wrong about the US financial system during the naughties and why its stupidies brought about the Global Financial Crisis you couldn’t do better than read this book, which is as gripping as a novel. Lewis, who was once a stock market trader himself, is well placed to describe and explain the madness of the trading in financial derivatives based on hundreds of thousands of mortgages granted to poor people who couldn’t afford them. ( )

A frightening book. Pissed me off all the way through. A lot of people should have gone to jail over the sub prime lending fiasco.

I read this trying to get a better grasp of what happened to our economy. I am not a big finance guy and hoped it would be written in a way I could understand. It was great.

People saw the collapse coming but were ignored in favor of greed. A must read. ( )

For those who have seen the movie based on this book, I still think it is in your best interests to read the book. It's fascinating, to put it mildly. This isn't exactly a story where I can ruin the ending: the big investment banks created derivative products called CDOs based on subprime (meaning unlikely to be paid back) mortgages. The CDOs were insured (mostly by AIG) by Credit Default Swaps, and AIG and others happily allowed people without any investment in CDOs to buy Credit Default Swaps on their own (basically allowing the creation of a derivative of a derivative, the synthetic CDO). The financial rating institutions, like Moody's and Standard and Poor's, rated these CDOs as AAA, which meant that insurance companies and retirement funds could invest in them. (As a note: AAA means as safe as a government bond, and therefore, riskless). This was a catastrophe waiting to happen and it appears that the banks really had no idea what they were doing, despite being warned by at least a few people. While this all sounds very technical, Lewis manages to make it entirely understandable.

This is essentially a story about what happens when we let our financial institutions run amok through deregulation. Deregulation began with Reagan, and then continued onwards through the Bush Sr, Clinton, Bush Jr., and Obama administrations (I can only imagine it will continue through the Trump administration as well). This book is a perfect story of a perfect storm, and if it is missing anything, it is a call to action. But I think the call to action is implied by the very nature of the events Lewis describes. ( )

Very interesting book about some of the people who saw the opportunity to make money by buying credit default swaps (insurance) against sub-prime mortgage bonds. The scariest part of this book for me was how ineffective an stupid the ratings agencies were/are and how the big Wall Street firms didn't even understand what they were building and selling. Putting your money under your mattress may not be a bad idea after all. ( )

As someone who had just entered University when the financial crisis went down, I only had the basic understandings of what happened and that a lot of shadiness went on behind the curtains. The Big Short was an excellent insight into the small group of people who were actually able to foresee the crisis happening. Michael Lewis does a great job of explaining a lot of complicated financial jargon in a way that is more palatable for the nonmembers (so most of us) of the financial sector.

In short, great book that is very insightful and even contains a few laughs throughout. ( )

An insightful look into the Wall Street, and the Housing Crisis Recession of 2007. The book goes incredibly in depth into the causes and lead up to it, while making it quite digestible. Some parts can be tough to understand, but the book is written so well that if you don't understand a certain term or concept (CDOs, credit default swap, etc) the first time, you can figure it out over time via context and great examples.

There is also a surprising amount of tension in the book. It is made very clear the gravity of the situation, and how society as we knew it, was teetering on the brink of disaster. All due to incompetence and greed. Part of the reason it is so easy to follow is that it follows a few people like Greg Lippman, Steve Eisman, and Michael Berry, who are extremely memorable. You learn about the situation through them as a reference. ( )

excellent ( )

So I was right! My financial advisers really are only interested in the fees!
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Another great story from Michael Lewis. With The Big Short, he has made the task of understanding our current economic state enjoyable. This book tells a hell of a story and it's peopled with real-life characters, people who say what they think (whether it's appropriate or not) and put their money where their mouth is.

By telling the story of a handful of investors who saw the subprime mortgage collapse coming (and who got fantastically rich by making shrewd bets against the dominant market trends), Lewis shines a light on just what it was that turned Wall Street (and the rest of the country, too) upside down.

It's part thriller, part morality tale, and it's all good. The only people who might not enjoy reading it are the investment bankers who were on the wrong side of trade. ( )

I'm not quite sure this book deserves 5 stars, but I personally found it so fascinating that I gave it that fifth star. Michael Lewis has a great, engaging writing style that makes you feel as though you really know the players in this tale of the housing market (and subsequent banking system) collapse. I've never felt quite satisfied that I knew the real story behind the collapse of the housing market and if and why Wall Street was to blame. I'm still not 100% there, but I know a LOT more than I did before. Unfortunately, it is very complex, and even though I have some knowledge of finance, it still wasn't perfectly clear to me how the various financial instruments exactly worked, but what Lewis does make clear is the whole psychology that drove the bubble and then lead to the collapse. He tells the story through the eyes of a few contrarians - - folks who saw the problems with the housing markets before anyone else. It's a brilliant idea to focus on those very few insightful people - - especially since they were all quirky and unlikely to be taken seriously by the rest of Wall St.I'm really looking forward to reading more on this topic. This book didn't address government's role very much, and I'd like to learn more about that element. All in all, Lewis deliver a very readable book that simultaneously taught me a lot while fueling my interest in learning more.
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This book is very frustrating because I don't understand it!! I want to, but I don't. It might be written for people smart than me, I don't know. The author rarely takes time to explain the terms he uses, so I can barely keep up. I rewatched the movie about half-way through it to see if that would help, and did some extra research on the economic collapse, but I still don't fully get it. I understand the loans (more or less) and that they were put in tranches and how people make money from that, but from there on I only kinda get it.

The good thing about this book though, is that it makes me wanna learn more. I really am gonna try to find other sources and understand wtf went down and then maybe return to the book in a year or so and see if I understand more. Econony might seem like a weird interest for me, but given my constant interest for different kinds of disasters, it kinda fits right in.

(A note on the translation - it's not good, and maybe the Swedish terms confused me even more. But there are a lots of typos and some sentences have clearly been translated directly, which makes me wonder if the translator understood the book.) ( )

I had read Moneyball some years ago at the behest of one of my best friends. He loved math and baseball equally, whereas I merely loved math. Despite this, I finished Moneyball both charmed and interested. Fast forward a few years, and The Big Short was my movie of choice for a westbound Transatlantic jaunt. When I discovered in the movie credits that it was based on a book by the author of Moneyball, I suddenly had a new next-up on my TBR pile.

The Big Short did not disappoint. Lewis' tight narrative holds you hooked while his attention to detail keeps your brain fully engaged. The book, while chronicling a train wreck of epic proportions, shows in its narrative exactly how a group of otherwise intelligent people can fall victim to believing their own BS. The underlying message here is that there is nothing so well-understood that a first principles analysis and deep critical thought cannot be useful.

As for me, I've just added Liar's Poker to my TBR pile. Read the Authors Note at the end of The Big Short of you want to know why. ( )

Gripping book and better than the movie. The book covers the details of how intelligent people created the financial machine that caused a near-Depression. The safety of the economy was literally keyed to the financial success of waitresses in strip clubs in Las Vegas. The powers that be sought to treat debt from otherwise uncreditworthy and marginal people as AAA, sterling quality obligations. Is it any wonder it failed? ( )

An A.B.C's break down of how Wall Street made millions while screwing the average American. While repetitive at times Michael does a phenomenal job of explaining the technical and making it understandable for the average person. ( )

Michael Lewis takes a look at the 2008 financial crash from the perspective of a few people who saw it coming. It helps the reader understand the market concepts that led to the collapse. It was primarily related to the practice of subprime mortgage lending. The complex tangle of root cause is unraveled in this book. Boiled down, they include greed, ignorance, hubris, and skewed financial incentives.

This book is effective due to focusing on people involved. Along the way, financial concepts are explained. We learn about collateralized debt obligations (CDOs), credit default swaps, mortgage bond tranches, the role of credit ratings, etc. It also briefly touches on the aftermath and the bailout by the US government.

It loops backward and forward since it follows the people rather than a linear timeline so there is a bit of repetition. I am impressed by the author’s ability to build tension even though we already know the outcome. I found myself riveted to this account. It is definitely one of the best explanations of the crisis that I have read. ( )

Ahh I can't stop reading Wall Street books ( )

The Big Short: Inside the Doomsday Machine by Michael Lewis explained things I didn't want to know. I felt dirty. Michael Lewis helped me understand that investors bet that people could pay their mortgages--even when the banks who made the loans knew they couldn't, other investors bet that people couldn't pay their mortgages, and in the end, investors bet that banks would fail. That's just nasty. ( )

A fascinating look inside the subprime mortgage machine leading up to the financial crises of 2008. The story is told from the viewpoint of a few mavericks who bet against (went short) the financial markets. ( )

I really love Michael Lewis as a storyteller and I had seen the movie of this book a few years ago so I figured it was time for me to get to this book and I’m happy I did. I really enjoyed this book. It fit really well into the several books I’ve read lately that have been about deception on wall street or ways of gaming the system. This book is probably a few years out of date for the particular issue it is writing about but given the deregulation we’ve seen in recent year both in the US and in other countries, the topic might be very relevant. I would encourage anyone to read this book, even today. Also I just finished Michael Lewis’ podcast and that was also very good go listen to that! ( )

Funny summations of the odd balls in high finance. The best explanation of credit default swaps I've seen. Riveting account of how most investment people couldn't get out of the boom mentality even though all hard evidence pointed to bust. I skimmed the last third because it was due but I highly recommend it. ( )

"I can understand why Goldman Sachs would want to be included in the conversation about what to do about Wall Street. What I can't understand is why anyone would listen to them." -Steve Eisman, who read the signs and bet against subprime loans and (nearly) every big US investment bank, plus some overseas.

Find yourself a copy of this book, and read it. You might not be able to explain what a Credit Default Swap or Collateralized Debt Obligation are once you are done, but you'll understand enough to be really, really pissed off. Michael Lewis is one of the best non-fiction writers out there, and he weaves together a fascinating story of some people who did read the markets, and made really big bets against subprime loans, and spent years wondering why nobody else could see what they were seeing. ( )

This was a good book from Lewis. Enjoyed the characters in the book and learning more about the period of the 2008 financial crisis. ( )

I am of two minds about this book. Either:

* Everyone in the world should read this book

... or ...

* No one should /ever/ read this book.

When The Big Short first came out, I heard about it on NPR, listened to a review on Planet Money, listened to an interview with Michael Lewis on Planet Money, heard several more people talk about this book, and then decided not to read it for 'rage management' reasons. Planet Money recently released their recommended books about the crash and the economy and, this time around, I felt enough time passed between the crash and now that the rage would be a lesser rage, that I would not throw my Kindle into the wall, and the teeth grinding would be lessened.

The Big Short is a concise history of Wall Street from 2003-2008. By following the lives, and trades, of several sets of investors who saw the crash coming from miles away, the book delves deeply into the world of mortgage backed securities. As well as anyone can, it explains bond trading, tranches, credit default swaps (CDS), collatoralized debt obligations (CDOs), and synthesized CDOs which are CDOs made, bewilderingly, of other CDOs. Then the book goes on to talk about the crazy trader at Deutsche Bank who ran around selling CDSes on everything, the bond trader group -- who used to be equity traders -- who went short on everything they could find, the doctor come hedge fund manager who fought endlessly to tell his investors that these no-doc, negative amortizing adjustable rate mortgages with 2 year teaser rates were going to blow up and they did not listen, the kids from Berkeley who tried to make a killing and the people who actually went long on these things.

The pinnacle of the book is the "Wing Chau" scene, where the equity trader met someone on the other side of his trades who, in 2006, when bonds were already going bad, was convinced of the status quo forever and ever. Then the equity trader went home going "oh my god..."

The game was rigged. In theory Americans would refinance every two years from one terrible mortgage to the next to generate endless fees to dump into endless bonds that pretended to be "riskless." In the end, the mortgage deals blew up and the huge bundles of bonds were not riskless. Housing did not increase in value forever.

And yes, the few people who saw it coming made hundreds of millions off the crash, but at what cost to society as a whole? Most of them left, never to return to the game. They made their money but the cost to themselves was so high it wasn't worth it anymore.

It's a story of massive collective delusion, of outright greed, of fraud, of lies, of gamed rating agencies, of banks shifting massive untold risk on to their shareholders, of normal banking becoming too 'boring', of an industry who sucked up trillions of dollars and produced nothing, and of people who were playing with things they had no hope of understanding. A story of a giant game played with people's homes and people's ignorance on a mass scale and turning the American homeowner into just one dot in a giant Ponzi Scheme that was bailed out, no questions asked, by the US Government with even more of the American homeowner's money.

The book has an incredibly hooky style. It's clear. It's concise. It's sarcastic. It's entertaining. It's compulsive. It reads quickly. It's also a drive by on a twenty car accident on a freeway. I want desperately to recommend it but I feel everyone who reads this book will promptly sell their house, pull their money out of the banks, and go live on a compound somewhere in Western Michigan.

Seriously two thumbs up but now, when I read the economics blogs -- all which recommend the Big Short -- I am always going to think about one bond trader screaming at another one: "I'M SHORTING YOUR HOUSE!"
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Fantastic book. This author did an excellent job in character studies as well as explaining what the hell a credit default swap is. I would recommend this book if read in conjuction with another book, Sowell's, The Housing Boom and Bust, which explains the political decisions that were made to facilitate the creation of this market niche. ( )

I'm actually a little bit angry that this was such a fun read, because I think that the view it presents of the crisis is fundamentally misleading - namely that it treats the financial crisis as a poker game, a bunch of bad beats, rather than what was, which was a series of major crimes that helped plunge the entire world into a catastrophic recession. This book is an account of the subprime mortgage bond meltdown on Wall Street in the years leading up to the latest recession we're still basically treading water in, 2005 to 2008. It centers on a handful of plucky underdog traders whose antisocial, anti consensus, anti-mainstream views helped them see through the miasma of manic speculation around them and eventually reap vast profits when everyone slowly realized that the products they had been frantically trading to each other were based on optimistic assumptions that they didn't understand or didn't care about.

It's an excellent tale ably told, with compelling characters, a strong narrative, plenty of clear exposition of notoriously abstruse financial products like credit default swaps and collateralized debt obligations, and even a suspenseful plot arc as the clock on the Doomsday Machine of the subtitle ticks down to zero and people start losing billions of dollars. This would make for an excellent thriller novel, even if only people who actually worked on Wall Street would read it. Unfortunately, this is nonfiction targeted at a general audience, meaning it's supposed to be an accurate account of How Shit Went Down in the days before the financial crisis became everyone's crisis, and it's really lacking when you compare it to other accounts. Lewis' primary mistake is limiting his scope, and although the humanization admittedly improves the read, it completely leaves out the key lesson of the whole thing. He tells the story like it's a bunch of individual oddball traders bucking conventional wisdom through their superior research and what amounts to better math skills (one of the erstwhile heroes has Aspergers, which we're told helps him focus on his work better than the normies) in order to pursue essentially individual grudges in the small world of bond trading. It actually reads oddly like those parts of James Bond novels where he wins big in baccarat because he's a badass.

There are pages and pages of backstory on these traders operating in this world where ridiculous deals that no one understands are almost a given, and it's not until the end that you realize that some major questions don't get answered, like: are Our Heroes actually smarter than all these other traders? The book is certainly written that way, and there are several scenes where the opponents are shown to be idiots who don't reads prospectuses or question the flaws in their pricing models or consider what exactly it means to create all these nifty new types of securities. But does that imply that the crisis could have been avoided if everyone had bothered to do their research? I think the answer is clearly no, because multi-trillion dollar assets bubbles don't come about because someone's valuation formula can't handle negative numbers (as Lewis alleges), they come about because everyone is investing in garbage and simply looking for the next sucker, hoping to cash out their bonuses before the music stops. Lewis acts like there are somehow good guys in this story, those canny few who placed the right bets on the right financial products, but they aren't good at all when you look at the story from the outside, because what they're doing is indistinguishable from what Goldman Sachs and Deutsche Bank were doing.

It's easy to lose sight of that fact in the blizzard of financial terminology (which Lewis does a great job of explaining, probably thanks to his background as exactly this kind of trader), but as an ordinary citizen who doesn't think that bond traders do anything especially noble or interesting or beneficial to society, all I see is that a couple of rich people happened to be slightly better than some other rich people at keeping track of which insane bets they were making. The ultimate reason why we had a housing bubble, and why Lewis is writing about these people in the first place, is that traders exactly like the ones we're supposed to be rooting for got greedy when they thought they could make limitless amounts of money from nothing, and eventually they made a few bets too many. The key factor here isn't the stupidity of the traders, though there's certainly plenty of that; it's greed, because a lot of what this boils down to is fraud, plain and simple. That there haven't been more prosecutions speaks to both the timidity of the government and the incomprehension of the public (check out what happens in the trial that Lewis relegates to the last footnote).

I'm positive you could write equally interesting stories about previous crises like the South Sea bubble, tulipomania, the Mississippi Company, the dotcom era, and so forth (Lewis has also written about the S&L crisis, in a previous book I haven't read, and he has a forthcoming book about the fallout from this crisis), because as works like Reinhart & Rogoff's This Time Is Different show, asset bubbles all follow eerily similar scripts. The solution is not to simply make more clever trades and do better math (if someone like Isaac Newton can lose money on a speculative bubble, normal people haven't a prayer), the solution is to think carefully about what this kind of unregulated speculation really means in terms of the human lives out there who are somewhere out there beneath the ethereal whispers of CDSs and CDOs. The kind of gambling that all of these people are doing is corrosive and fundamentally different than what average commodity speculators are doing and should be doing, which is pricing risk and allocating capital.

In the foreword to the book Lewis tries to claim that he's always surprised that people seem to take his financial journalism in the same spirit as all those people who pump their fists to the "greed is good" speech from the movie Wall Street, but he's probably lying: the moral he presents isn't that piling derivatives on top of each other is retarded and bound to blow up in your face to the tune of many millions of dollars, it's that if you're a particular type of prickly savant you can tell rich people to fuck off whenever you feel like it and make zillions thanks to your misunderstood genius. Be a maverick! Fuck the suits! He's unquestionably glorifying the life of a bond trader, and while that's of course his prerogative, he can't claim to be totally unaware of the effect on the reader as he lovingly describes each clever deal and outsized return. The way he tells it, the only crimes committed here all involved not making enough money.

Meanwhile the actual fallout of all of this excitement - i.e. trillions of dollars of real money gone, economies around the world in ruins, widespread riots, and unknown but probably horrible political shifts as society's elites smoothly escape any real consequences for their actions and consolidate their power - gets relegated to the epilogue. This is the anti-Griftopia, a book that takes the insane world of high finance on its own terms almost without reference to the real world. He wants you to root for the main characters, even though they're betting against the housing market! Would you high-five a guy who won $50 betting that his next-door neighbor couldn't pay his mortgage? This was a good read, but a terrible way to understand the financial crisis, and it sucks that people who have never seen Inside Job or read Naked Capitalism will take this to heart without getting into the larger, and more important story beyond these "genius" traders. ( )