Thoughts: The Big Short: Inside the Doomsday Machine, by Michael Lewis

This is the beginning of a run of non-fiction books, so that means you get to learn exactly how much I don’t know about anything. This is also taking us right to the end of 2015 in my TBR. How exciting!

The Big Short went on the list because we saw the film, and I was pretty impressed. I was impressed with the book as well.

I don’t know how much exactly I can say about it, as I’m about as familiar with the financial crisis as everyone else with a half-arsed understanding of the financial crisis – I didn’t come at this with much theory or whatever under my belt. And I’d be lying if I said that now I could rattle off exactly what many of these things exactly are – but I know enough to know that that’s the point. CDOs and CDSs are designed to be unfathomable. It was very much an obfuscation game, and a very successful one.

Part of the reason The Big Short is such a compelling read (lots of reviewers like to say it’s a thriller, which I disagree with on the basis of having seen and read thrillers before) is that it feels urgent and like a spilled secret. Our chances of ever finding out what officially really happened are vanishingly small, as NDOs and contradictions in official reports have been thrown around since the minute everything happened, so books like this, with eyewitness statements and some anonymous sources, written by someone familiar with not only the industry but its scandals, are maybe our only way in. I described it to friends as being like sitting across from the author in a bar, and he’s telling you the story in a slightly lowered voice, and you’re leaning over the table to hear more. Lewis posits himself as firmly on the side of the lay reader – who is, let’s not forget, the wronged party in all this. All of us lost out here. We were robbed, whether through being taken in by bankers with agendas and taking out faulty loans, or through the taxpayers’ money in various countries that went to bailing out undeserving institutions.

Lewis’s writing is sometimes almost conversational in tone, but clear. He uses analogies quite sparingly but at just the right places, to remind the reader what certain products are, explain the ramifications of complex-sounding actions and effects, and explain what the euphemistic language of finance means in (not really equivalent) but understandable terms.

I freely admit that his tone and position make the book easy to like. It feels like he’s telling you a secret, but that it’s a secret that needs to be spread. People need to know. You know what I mean?

The story (even as you’re thinking that this is some real doomsday stuff you have to remind yourself that it’s already happened and they were right!) is peopled with a few colourful characters of the anti-social savant/abrasive outsider/scrappy upstart variety (you can see why they saw it would make a good film), which made me wonder if this is part of why no one saw it coming? If you had to be one of these undesirables of the financial world to see it coming, and believe them if you couldn’t be them? I suppose it still comes down to arrogance.

And that’s another component of the readability of the book – it’s inherently satisfying to see rich, arrogant, stupid and arguably criminal people brought low. The numbers of triple B-rated CDSs goes up, the amounts of money dangling over the cliff go up, and even as I’m scandalised by the venality of it all I’m thinking, go higher, push further, go on.

There’s an odd point in the book, when the crash happens and everyone realises what’s happened, and suddenly you, like one of the men interviewed in the book, have to change your view of the rich, arrogant, stupid men, because they aren’t on top anymore; they lost. We must modify our views of them accordingly.

But not too much, because as we’re told, none of the big offenders actually got punished at all. Not even socially. Certainly not financially.

Is it even over?

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