The Big Short by Michael Lewis

8.9/10 dropps

A recurring theme in Michael Lewis’ work is the idea of a winner emerging from a seeming no-win scenario. Lewis’ published books are mostly masterpieces of nonfiction, perfect for reading in airports. In Moneyball, Michael Lewis examined the concept of value by telling the story of Billy Beane and his stunning ability to guide the Oakland A’s to the playoffs year after year, despite limited funding. The Blind Side examined how changes in the way football is played necessitated the implementation of an affective left tackle, subsequently paving the way for a lucky black youth to be taken in by a prominent southern white family and eventually be recruited by the Baltimore Ravens. His own autobiographical debut, Liar’s Poker, charts his transformation into a successful bond trader for the now-defunct Solomon Bros.

The Big Short is a spiritual successor to Liar’s Poker, and it continues Lewis’ theme while carrying the most audacious premise possible: Lewis chronicles the story of the handful of people who saw the financial crisis coming and made a fortune. The cast of characters Michael Lewis chooses to focus on is quite small, but they comprise a very real, eclectic group of eccentric personalities that provide Lewis with the perfect opportunity to strike an excellent balance between informing his readers and humoring them.

Among Lewis’ cast are a pair of struggling, recent college graduates who start a hedge fund from the confines of a garage in their backyard in California. Another manager, the hilariously anti-social Steve Eisman, is so offensively awesome that I won’t bother to distill his character down to mere sentences. Perhaps the most memorable part of the ensemble is Dr. Michael Burry, a one-eyed man who initially viewed finance as a hobby and eventually discovers that he has Asperger Syndrome.
Fortunately, The Big Short does more than highlight the few winners in 2008. Lewis provides a detailed account of the build-up of the housing and credit bubble over the last decade. He highlights the men who generated the biggest losses of the crisis. The epilogue to The Big Short, in which Lewis interviews Solomon Bros. former CEO John Gutfreund (his old boss), will please fans of Liar’s Poker while providing a satisfying conclusion to a story that isn’t yet entirely finished.

However, Lewis’ ultimate achievement is demonstrating that it takes more than simply “being right” to achieve victory. Shorting the housing market in anticipation of a spectacular crash was a costly gamble in a market that most perceived as buoyant and stable. The tribulations undertaken by the real-life figures Michael Lewis depicts never cease to feel tragically real. Still, the theme that persists throughout Lewis’ work remains clear: that sometimes it takes the most eccentric of outliers and outcasts to go against the grain and come out ahead.

-John Jameison