The Core Dump

A strong conviction that something must be done is the parent of many bad measures

[By Nic Lindh on Tuesday, 22 June 2010]

Review: The Big Short

Nic reviews Michael Lewis’s The Big Short. He likes it.

The Big Short: Inside the Doomsday Machine is required reading. You must read it. Now.

Michael Lewis, author of Liar’s Poker and Moneyball tells the story of the subprime mortgage meltdown from the perspective of some of the very few traders who saw through the irrational exuberance of the housing market and actually did the work of figuring out how the Collateralized Debt Obligation machine worked and saw it for the Ponzi scheme it really was.

While the focus of the book is the personal experiences of the traders, The Big Short also does an able job of explaining some of the more baroque financial instruments created by Wall Street, instruments made purposefully as byzantine as possible in order to deceive both customers and ratings agencies. As one of the traders says after he finally gets to the bottom of how the system works, “How is this legal?”

The greed and stupidity displayed by the people whose very job it was to understand the financial instruments will make your blood boil.

The Big Short is a fast, easy read that will make you want to get on a flight to New York to go to Wall Street and stab people in the face.

Read it.

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