very readable explanation of 'Wall Street' end of the financial breakdown, focused on outsiders to the financial industry who saw the debacle coming

This book is presented to us in a reader friendly manner that makes this complicated story of true events easy to follow and the dots easy to connect. The recession of 2008 impacted nearly everyone in the United States and made its presence known all over the globe from the trickle down after effects that were spread out to other nations as well. There were many factors that contributed to the events of 2008 but there were key mistakes that were made and key shifts in the world of investing that played a major role and contributed greatly to these events. Even if you are not familiar with investing or not of a financial background, this book will be easy for you to follow and a worthwhile read. I'd recommend this book to just about anyone and I feel it is an important read and book to have in your library.

Lewis has the inside story from a couple investors who realized what was happening with subprime mortgages and credit default swaps and derivatives, and very successfully went short on mortgage bonds and brokers and banks that were dealing in them. The revelations about the criminal and immoral behavior of the mortgage lenders, bankers, brokers, rating agencies and regulators are deadening and disheartening. Powerful interests flouted the law and did what they wanted to do to make lots of money, putting an entire nation and the world at risk. The scope of the crime made it impossible to escape the financial meltdown, and most of those responsible kept their money and stayed out of jail. Lewis made it possible for me to get a satisfying understanding of the financial instruments and the convoluted criminal process of creating them and hiding them. Very readable, arcane financial stuff in only a few places.

Great book focusing on the people involved in the financial meltdown. But . . . it needs a cheatsheet or appendix explaining the terms and/or concepts (credit default swap, etc.), and an index.

A little bit nauseating, but undeniably brilliant. Lewis explores some of the same territory covered by This American Life and Planet Money in their great deconstructions of the 2009 financial meltdown, but manages to make it feel fresh and interesting.

Admittedly, the book does tend to get a bit too technical at times, but it's almost as if that's part of the point. What happened in the subprime mortgage market does its level best to defy explanation, as people we expect to be very smart managed to do very dumb things. In a lot of ways, The Big Short reminded me very much of the other Michael Lewis book I've read, Moneyball, which has a very similar story of the small group of people who are able to recognize flaws and oncoming changes in a system and use that to achieve an advantage on the entrenched group of people who refuse to acknowledge that the present or future will be any different than the past.

Arriving very late to the party, I finally read Lewis' The Big Short. I enjoyed both his Liar's Poker and Moneyball. His talent of drawing quirky portraits is again on display. The Big Short might also be called "The Revenge of the Nerds". In Lewis' tale, it is only the outcasts, the socially misfits and cranks. who discover that the US real estate market has run amok, fueled by easy money provided both by the FED and Wall Street whose greedy investment bankers eagerly sold their clients toxic sludge with Triple A ratings, signed by Moody's and Standard & Poor's. Lewis' tale is a good yarn of David vs. Goliath (where Goliath is rescued by government life support). The banks, the rating agencies and the regulators thus are allowed off the hook far too easily.The crisis of 2008 happened because criminal activities were not checked by the watchdogs whose sole job would have been to keep those criminals in check. As Lewis shows, the bosses in the rating agencies were not unaware that BBB tranches could not magically all be turned into AAA tranches. They signaled and made clear to their employees that they wanted this fraud to proceed (and were compensated for their sale of their reputation accordingly by the investment banks). The retail banks knew that "liar loans" were not worth the contract paper they were signed on. They willingly handed on unsound risks to dumb investors (often European) who believed in the "made in the USA" quality label, despite much prior experience with the shoddy quality of US cars which should have cured anyone from such an idea. Lawyers and regulators also, for a fee, looked away, actively directing the Titanic onto the iceberg. Instead of paying the price for their folly, the criminals not only were allowed to keep their loot, government handed them huge amounts of money. In directing his focus on the few who stood on the right side of history, Lewis allows the culprits to get away. Just like Liar's Poker became a manual for junior Gordon Geckos. The Big Short might train the next generation of real estate crooks.

Great story from the view of those who saw the sub prime mortgage coming and made money from it. It explained part of the financial meltdown in an easy to understand way. He also tries to explain credit default swaps and collateralized debt obligations.

If you’re looking for an understanding of exactly what happened in the financial markets to cause the stock market to crash in 2007, The Big Short is as close as you’ll come to a coherent explanation. While you’re unlikely to understand exactly what the CDOs which caused the crash were, their nature isn't particularly important- they’re only the MacGuffin of the story. Lewis explains them as best as possible in English, but as the nature of the story here tells you that Wall Street’s obfuscatory jargon succeeded in concealing their true nature you may end up none the wiser.The Big Short is essentially a modern version of The Emperor’s New Clothes, with the part of the boy who dared to point out the nudity taken by the unlikely figure of Michael Burry, a medical student with one eye and Asperger’s Syndrome who had gained a very minor financial celebrity with some smart blogging. Initially no-one listens, but in a testament to Richard Dawkins’ theory of the meme it gradually spreads through Greg Lippmann, the founders of Cornwall Capital and finally Steve Eisman. The bulk of the book is about the inexorable spread of the realisation that Wall Street had come up with a means to package junk bonds (those unlikely to retain a high level of payment) as triple A rated bonds, and that when those junk bonds inevitably went belly up there was a fortune to be made. Lewis, as proven with the likes of Liar’s Poker, Moneyball and The Blind Side, is expert at finding the story and building tension as investors who see their money being bet against conventional market wisdom start getting itchy trigger fingers and start wanting their money back as Wall Street appears to be colluding to hide the scale of the CDO problem. As we now know, eventually the market collapses, taking down Lehmann Brothers and Bear Stearns and essentially resulting in many of the other firms being bailed out. But the lucky few who’ve seen the Wall Street emperor’s covering his dignity as well as Ron Jeremy does make it out not only alive but rich. Essentially, they’re rewarded for their foresight in stepping away from the herd.As with Liar’s Poker it’s Lewis’ ability to capture the nature of the characters involved and his eye for telling detail that makes a book about financial trading amidst mainly conventionally unlikeable characters compelling. Eisman, Lippmann and Burry wouldn’t exactly be the first candidates for representing their country at the United Nations. But even they appear best buddy material compared to the likes of Howie Hubman and Wing Chu, brash upstarts who smugly collect their money whilst the going’s good with sub-prime mortgage bonds... and end up walking away millions of pounds personally richer despite having orchestrated some of the worst losses in Wall Street history.That ends up being the real sting in the tale. Despite nearly bringing the whole economy crashing down, after Lehman and Bear Stearns fail the US Government jumps in to prop up other banks, Secretary of the Treasury Henry Paulson (a former CEO of Goldman Sachs under whose reign a huge number of the eventually toxic CDOs were created) ending up essentially giving the banks cash... which they end up using to go back to business as usual. It’s as pointless as having tipped that cash into the Atlantic Ocean – it’s simply ended up propping up what’s been comprehensively demonstrated to be a corrupt, flawed system which ends up rewarding failure and complacency as much as success and foresight. It’s a disquieting note on which to end the story, the thought that the system which failed so badly is still there having learned none of the lessons it should have.Thematically, this feels like the sequel to Liar’s Poker, as well timed as Gordon Gecko’s equivalent filmic return. And like that pair of films, this seems like another warning about the state of Wall Street. On this evidence any putative third instalment of either might simply be a survey of the devastation of a financial atomic bomb.

Lewis is best when describing the few financiers who accurately predicted the failure of the sub-prime mortgage market and the subsequent collapse of the financial system. His characters are richly drawn. Some are everything you expect Wall Street types to be: cocky, vain, and whip smart. Others, surprisingly, are socially inept and/or solitary. Three guys make millions going short because they are temperamentally uncertain and cynical.Where Lewis falls short, is in failing to simplify the underlying complicated financial dealings, although he tries. Lewis would have been better off not even attempting to clarify derivatives, Collateralized debt obligations (CDOs), and other sophisticated financial instruments or deals.

I would have given this 3.5 stars if that were possible as this is a good but incomplete story about the financial debacle of 2008 and three men who made a fortune off of it by seeing it coming. It's absolutely worth reading, if only for the moment when one of the main characters realizes that the Chairman of Bank of America is "an idiot." In addition to that one moment, it contains many moments of dark humor and information one would never find in newspapers.