The Big Short: Inside the Doomsday Machine

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Binding: Hardcover Dewey Decimal Number: 330.973 EAN: 9780393072235 ISBN: 0393072231 Label: W. W. Norton & Company Manufacturer: W. W. Norton & Company Number Of Items: 1 Number Of Pages: 266 Publication Date: 2010-03-15 Publisher: W. W. Norton & Company Release Date: 2010-03-15 Studio: W. W. Norton & Company
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Editorial Reviews: The #1 New York Times bestseller: a brilliant account—character-rich and darkly humorous—of how the U.S. economy was driven over the cliff. When the crash of the U. S. stock market became public knowledge in the fall of 2008, it was already old news. The real crash, the silent crash, had taken place over the previous year, 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 their debts. The smart people who understood what was or might be happening were paralyzed by hope and fear; in any case, they weren’t talking. The crucial question is this: Who understood the risk inherent in the assumption of ever-rising real estate prices, a risk compounded daily by the creation of those arcane, artificial securities loosely based on piles of doubtful mortgages? Michael Lewis turns the inquiry on its head to create a fresh, character-driven narrative brimming with indignation and dark humor, a fitting sequel to his #1 best-selling Liar’s Poker. Who got it right? he asks. Who saw the real estate market for the black hole it would become, and eventually made billions of dollars from that perception? And what qualities of character made those few persist when their peers and colleagues dismissed them as Chicken Littles? Out of this handful of unlikely—really unlikely—heroes, Lewis fashions a story as compelling and unusual as any of his earlier bestsellers, proving yet again that he is the finest and funniest chronicler of our times.
Spotlight customer reviews: Customer Rating: Summary: What about bad government policies ? Comment: I enjoyed reading this book but kept wondering when he would mention the Community Reinvestment Act that forced lending standards to be lowered and the critical role played by Fannie Mae and Freddie Mac. Without discussion of the destructive role played by government,the story is incomplete and misleading. Our "representatives" in Washington were at least as crooked and greedy as anyone on Wall Street. Customer Rating: Summary: Great Read Comment: The author is a terrific writer. Very engaging read, but also simple and easy to understand. I finished this book in about 4 days of reading. Lots of great insights to some interesting people and their view of the economy prior to it collapsing. Customer Rating: Summary: Thank you Michael Lewis for quitting finance and writing instead Comment: Michael Lewis would probably be a lot richer if he had continued working on Wall Street but we would have missed out on his exceptional talents as an author. I suspect he is also happier person as an author than a bond salesman. The Big Short is an all around fantastic book and will satisfy most readers. It is entertaining, well written and even suspenseful. Lewis tells the story of various characters, who although not well known, nevertheless played a substantial role in the housing bust. Lewis creates suspense and urges the reader to continue reading to find out what happens to these interesting characters. What makes The Big Short a solid 5 star book is not just that it was pleasant to read. I have read several books on the financial crisis and the housing collapse, but none compare to the Big Short in clarity. Readers will gain deep understanding about what led to the 2008 recession. Financial instruments like CDOs, Credit Default Swaps, Alt-A bonds are explained clearly without boring the reader. After all, these exotic financial instruments and the people who invented them played a major role in the economic downturn. Lewis does not merely explain macroeconomic factors but gives you a picture of what was going on years before that led to the collapse. And he does all this while entertaining you! There is not much more a reader can ask for. This is an exceptional book and I highly recommend it. Customer Rating: Summary: Fine study of Wall Street criminality Comment: In this fascinating book, ex-Wall Street Michael Lewis tells the story of some of those who betted against subprime mortgages, against Wall Street. Subprime mortgages were taken out by those least able to repay the loan. For example, a Mexican strawberry picker earning $14K was lent every cent he needed to buy a $724K house. Household Finance Corporation, with the biggest portfolio of subprime loans, lied to its borrowers they had an `effective rate of 7 per cent' when it was taking 12.5 per cent. In 2002, it settled out-of-court and paid a $484 million fine. In 2003, HSBC Group stupidly bought HFC for $15.5 billion. Goldman Sachs was `notorious for packaging America's worst home loans'. It paid rating agencies to re-rate BBB-rated mortgage bonds, gathered into collateralized debt obligations (CDOs), as AAA. (One hedge fund owner called the rating agencies `whores'.) Standard & Poor's managing director of CDO ratings e-mailed, "Any request for loan-level tapes is TOTALLY UNREASONABLE!!" Wall Street contracted its credit analysis to people who wouldn't do a credit analysis. $400 billion of CDOs were never properly vetted. By January 2007, Morgan Stanley's star trader had bought $16 billion in AAA-rated CDOs, composed entirely of BBB-rated subprime mortgage bonds. This led to the biggest-ever trading loss on Wall Street. As Lewis writes, the subprime mortgage market was `an engine of exploitation and, ultimately, destruction'. Financier Steve Eisman said, "The system was really, `f*** the poor.'" The entire business of consumer finance, he said, `existed to rip people off'. When Wall Street fell, Wall Street blamed the American people. The US government then bailed out, not the individual American borrowers, but Wall Street's firms, which had all bankrupted themselves by making dumb bets on subprime borrowers. Goldman Sachs lost its clients a billion dollars. Bush, then Obama, gave billions of taxpayers' money to Goldman Sachs and $306 billion to Citigroup alone. Goldman Sachs still paid $3.8 billion bonuses last year. The Fed shifted a trillion dollars' worth of bad debts from Wall Street to the taxpayer. Wall Street does not create wealth, just shifts it from one shark to the next. It is not rationally putting our savings and pensions to better use, but stealing them. It is a criminal conspiracy. Customer Rating: Summary: A good book, but below expectations Comment: This is a good book and well worth reading for anyone who wants to have a better understanding of what happened in the mortgage securities market that led to the massive financial crisis. I didn't give it 5 stars because I thought the focus on a few players who figured out the fundamentals of the underlying risks and made huge fortunes in so doing was not the best way to tell the story. Interesting to some degree, but not as thorough and broad as I would have liked. More focus on the inside of the investment banks, loan originators and rating agencies would have been welcome. I expected a lot from this book - I had heard that all the key Congressional players were reading it to help them figure out the crisis. So, I hoped to see a more comprehensive look at the key factors. It really doesn't deliver that. More Reviews