The Big Short

By Michael Lewis,

Book cover of The Big Short: Inside the Doomsday Machine

Book description

The real story of the crash began in bizarre feeder markets where the sun doesn't shine and the SEC doesn't dare, or bother, to tread: the bond and real estate derivative markets where geeks invent impenetrable securities to profit from the misery of lower- and middle-class Americans who can't pay…

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Why read it?

6 authors picked The Big Short as one of their favorite books. Why do they recommend it?

In my career as a corporate spy, I was able to see and learn many things I wasn’t supposed to. As a result, I saw the makings of what would become the world’s worst financial crisis since the Great Depression, the 2008 Crash. At first, I thought I was the only one, until I read The Big Short. Michael Lewis documents the few oddballs and kooks prescient enough to read the financial tea leaves and see the crash coming. More than that, he shows how Wall Street didn’t care, until it was too late. 

From Robert's list on cons and scams.

Michael Lewis is a literary magician. He can take the most obscure and unpalatable topic, find a story buried somewhere inside it, and turn that story into a book so good that you want to tell your friends about it. The Big Short is Lewis at his best. It tells the story of a motley crew of unconventional stock traders who saw the diabolical lie at the center of the subprime mortgage boom and bet against the market when the market was sizzling. They were Cassandras, destined never to be believed—until the market crashed in 2008, their detractors lost their…

It’s very hard to tell the story of complicated events, and the global financial crisis that broke out in 2008 was certainly very complicated. Michael Lewis, though, is a brilliant storyteller. The Big Short, which was made into a fine film, focuses on the savvy (but often eccentric, even obnoxious) traders who bet against the sophisticated financial instruments that were at the heart of the crisis. Their story, fascinating in itself, cuts through all the complications and reveals the scary dynamics that gave birth to the crisis. 

If you read The Big Short or watch the film, you may…

A former investment banker, the author brings a sceptical view to books like Liar’s Poker, his first big success, but The Big Short is without a doubt the definitive account of the sub-prime debacle that led directly to the Great Financial Crisis of 2008 and put an abrupt and painful end to what had been called The Great Moderation. It took a decade to recover from the disaster of 2008, just in time for the economic devastation wrought by the pandemic. By dint of old-fashioned journalism, The Big Short exposes the herd-like mentality of much of Wall Street and,…

From Selwyn's list on economics and investment.

Nearly every Michael Lewis book offers some important lesson in finance or statistics (e.g. Moneyball). The Big Short tells the story of the 2008 financial crisis through the stories of several investors who saw it coming. The book does a brilliant job describing the complex Wall Street financial products that turned a real estate collapse into a global financial panic. Lewis probes how misaligned incentives for actors ranging from mortgage brokers to ratings agencies caused people to do things that were good for them and catastrophic for the rest of us. Lewis is a great storyteller; his stories also…

From Charles' list on economics and public policy.

Lewis’s account of the traders who got it right in 2008 is a magnificent achievement in that he somehow manages to take highly complex and esoteric material and make it both comprehensible to the lay reader and wildly entertaining. To give credit where due, I found one of my interview subjects for Hedge Fund Market Wizards (Jamie Mai) by reading this book.

From Jack's list on traders.

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