Michael Lewis’ book, The Big Short: inside the Doomsday Machine mainly deals with a group of individuals who tried to analyze the sub-prime mortgage and came to discover many underhand deals in the financial system. The shenanigans in the Wall Street came to understand that their schemes would bring about a massive financial crisis. After getting this revelation, they went ahead and amassed wealth that they hoped would cushion them from such a financial crash.
Lewis, in this vivid account, walks his readers with a glowing account of the 2008 financial crisis from a unique perspective. Instead of focusing on key players in the rotten financial system, Lewis shares his insights by using murky individuals as his leading characters. Such a choice of characters might be used to help readers get a connection with them after the story is told. This might not have been the case for an inexperienced writer. In addition, Lewis goes inside the gloomy financial transactions with unimaginable precision. However, the author fails to point out any role, whether of omission or commission by the government, which might be responsible for most of these events or failures in the financial system (Wallace 32).
Lewis takes his readers through a bit-by-bit step explaining the genesis of the markets that crashed and not just, where the problems started. He has an excellent grasp of the financial dealings and explains these complex instruments in a language that can be understood by the average person. Through this, Lewis is able to present his arguments clearly to the readers although some sections of the book can lose some readers who might not have a good grasp of the financial system. Paradoxically, Lewis makes it clear that the instruments that are responsible for the collapse of markets are not well understood by the main players in the industry (Wallace 68).
Michael Lewis uses phrases such as “deadbeat” to refer to people who cannot meet their loan obligations (Lewis 100). On the other hand, he also uses words such as “scumbag” to refer to those who finance, bankroll, as well as repackage loans that people are unable to repay and then sell these to unsuspecting individuals (93). The main point that Lewis wishes to make is that Wall Street did not understand the repercussion of their actions. There is also a bit of teeter tottering between the greedy chiefs in leading companies and the incompetence of Wall Street. Lewis tries to jungle with this imbalance in this book. This is because; for instance, the author cannot claim that Goldman Sachs was responsible for writing credit default swaps that led to the collapse of AIG and thriving of Goldman Sachs (Lewis 48). In addition, he cannot again come over to claim that the players did not understand what they were doing. This rather unfortunate contradiction seems to run across the book.
Another fascinating thing about this book is that the author is exceptionally honest about the whole financial sector in the United States of America. According to the author, the financial sector is unequivocally corrupt and is filled with people who care little about the future if they can make money today (Wallace 34). To me, this might not come as a surprise; however, the manner in which the author puts the characters bare in the eyes of the readers is almost painful. The people in the financial sector worked hard to lie to themselves concerning the uncertainty that subprime was generating in the industry, which was willful deceit. The people who work in the system are seen as fools. Moreover, they are cast as people who are willing to take part in a system they know is not sound. It is disturbing to realize that some of the players in the system were paid to lie, while others issued with threats if they did not speak lies, like the Moody’s, and S&P. Moreover, others did not understand what was happening in the system, and many of these were the CEOs of giant banks (Mansharamani 71).
Although this is a marvelous book, there is one thing that I would criticize as far as the work is concerned. There is a need for Lewis to delve deeper in his analysis and provide a better explanation of some of the concepts that are used quite often. A thorough explanation of these concepts would make the book more appealing to the average reader. Overall, Lewis has done a good job as it gives insights on the happenings in the financial sector, and especially provides a clear analysis that a layman can comprehend. Since these activities are normally done under cover, providing a detailed account of them is of immense relief to many. One need not read many books about the happening in the financial sector to get a good picture of the dealings in these places. However, a grasp of this book will be a good relief. This is because it will help people realize the disaster that is waiting to happen in the American financial sector. Moreover, it reveals those who are responsible for the mess in many economies across the globe.
Works Cited
Lewis, Michael. The Big Short: Inside the Doomsday Machine, New York: W.W. Norton & Company; Reprint Edition, 2011.
Mansharamani, Vikram. Boombustology: sporting financial bubbles before they bust. New York: John Wiley & Sons, 2010
Wallace, M. William. The Decline and Fall of the U.S. Economy: how liberals and conservatives both got it wrong. New York: ABC-CLIO, 2010.