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.