Saturday, March 27, 2010

The Big Short by Michael Lewis

The Big Short

Lawd. This book took my breath away. I remember what I was doing at several critical moments described in the book and to have been so unaware makes me breathless. I learned things and feel oddly vindicated and cheated at the same time. I knew dumb people were making money with my money: vindicated. I thought some people in the government might be smart enough to realize what happened and know what to do: cheated.

Michael Lewis played two roles in writing this book about the subprime loan debacle. One the one hand he did the plebian job of untangling a very messy ball of knotted threads and on the other hand did a herculean job of elevating the discussion above the rock-slinging and shouting to which some angry losers are wont to resort. His characterizations of those involved on both sides of the trades are intimate enough to involve our emotions as well as our interest, but I think what really charmed me was the absurdity of some phrases that matched so perfectly the absurdities he was describing:
Inside Morgan Stanley, the subprime lending boom created a who-put-chocolate-in-my-peanut-butter moment. (p.201)

Osama and his team of bombers couldn't have done what our own Wall Street firms and their rating agencies and regulators did to the U.S. people and to the credibility of the U.S. government:
It was as if bombs of differing sizes had been placed in virtually every major financial institution. The fuses had been lit and could not be extinguished. All that remained was to observe the speed of the spark, and the size of the explosions. (p.225)

It seems ridiculous for me to urge you to read this book. Don't read it. You'll sleep better. But please don't go investing on Wall Street unless you want your nuts torn off.

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