The Big Short: Inside The Doomsday Machine
#1 New York Times Bestseller - 28 weeks on the bestseller list
From Michael Lewis, the bestselling author of Liar's Poker and Moneyball, comes a riveting true story of Wall Street greed, catastrophic blindness, and a handful of outsiders who saw what no one else could.
While the world celebrated an endless housing boom, a small group of misfits and rebels smelled disaster. A one-eyed former neurologist running a hedge fund from his office. An abrasive Wall Street analyst who thought the whole system was rotten. Two garage investors who turned $110,000 into $120 million. They weren't supposed to win. They bet against America's biggest banks, and they were right.
Lewis takes you deep into the shadowy world of subprime mortgages and complex financial instruments that nearly destroyed the global economy. He transforms bewildering concepts like credit default swaps and collateralized debt obligations into a page-turning thriller.
This is the true story of how the 2008 financial crisis happened, told through the eyes of those who predicted it, profited from it, and watched in horror as their predictions came true. Dark, funny, and absolutely infuriating, The Big Short reveals the stunning incompetence and corruption that brought the world economy to its knees.
The basis for the Academy Award-winning film. Essential reading for anyone who wants to understand what really happened.
Interesting Facts
Published Just After the Crisis: The book hit shelves on March 15, 2010, barely two years after the 2008 financial collapse. Lewis captured the story while the wounds were still fresh and America was reeling from the worst economic disaster since the Great Depression.
A Former Neurologist Predicted It All: One of the book’s main characters, Michael Burry, was actually a medical doctor who left his neurology residency to start a hedge fund. He once fell asleep standing up during surgery and collapsed into a patient’s oxygen tent because he’d been up all night researching stocks.
The Garage Band Hedge Fund: Two of the heroes, Charlie Ledley and Jamie Mai, literally started their hedge fund Cornwall Capital in a backyard shed in Berkeley, California. They turned an initial $110,000 into $120 million when the market crashed.
A Glass Eye Shaped a Genius: Michael Burry lost his left eye to cancer when he was just two years old. For years, he blamed his artificial eye for his social awkwardness and difficulty making friends, until his son’s Asperger’s diagnosis led him to realize he was on the autism spectrum.
The Strawberry Picker’s Mortgage: Lewis describes a Mexican strawberry picker earning just $14,000 a year who somehow qualified for a $750,000 mortgage. This absurd example perfectly captured how broken the lending system had become.
Only 10 to 20 People Saw It Coming: According to Lewis, just a tiny group of between ten and twenty people figured out how to profit from the madness of the housing bubble. They were the ultimate outsiders betting against the entire financial establishment.
28 Weeks on the Bestseller List: The book spent 28 weeks on The New York Times bestseller list. It resonated with readers hungry to understand how their economy had been driven off a cliff.
Oscar Gold Followed: The 2015 film adaptation won the Academy Award for Best Adapted Screenplay. Christian Bale earned an Oscar nomination for playing Michael Burry, and the movie grossed $133 million on a $50 million budget.
Bale Wore Burry’s Actual Clothes: After meeting the real Michael Burry, Christian Bale asked to have his cargo shorts and T-shirt, which he then wore in the movie. Burry was known for walking around his office barefoot in shorts, listening to heavy metal music.
A Sequel to His First Hit: Lewis describes The Big Short as a fitting sequel to his debut bestseller Liar’s Poker, which chronicled the wild 1980s culture at Salomon Brothers. Both books expose the greed and recklessness that define Wall Street across different eras.
Quotes
"What are the odds that people will make smart decisions about money if they don't need to make smart decisions-if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they're still all wrong." - Michael Lewis
"Success was individual achievement; failure was a social problem." - Michael Lewis
"The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street it was a machine that turned lead into gold." - Michael Lewis
"In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $724,000." - Michael Lewis
"That was the problem with money: What people did with it had consequences, but they were so remote from the original action that the mind never connected the one with the other." - Michael Lewis
"A thought crossed his mind: How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans." - Michael Lewis
"When you’re a conservative Republican, you never think people are making money by ripping other people off. His mind was now fully open to the possibility. I now realized there was an entire industry, called consumer finance, that basically existed to rip people off." - Steve Eisman
"The upper classes of this country raped this country. You fucked people. You built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience. Nobody." - Steve Eisman
"The line between gambling and investing is artificial and thin. The soundest investment has the defining trait of a bet (you losing all of your money in hopes of making a bit more), and the wildest speculation has the salient characteristic of an investment (you might get your money back with interest). Maybe the best definition of “investing” is “gambling with the odds in your favor.”" - Michael Lewis
"A Home without Equity Is Just a Rental with Debt." - Michael Lewis
"The willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grown-ups remains a mystery to me to this day." - Michael Lewis
"How can a guy who can’t speak English lie?" - Greg Lippmann
"I said to my mother, ‘I think we might be facing something like the end of democratic capitalism.’ She just said, ‘Oh, Charlie,’ and seriously suggested I go on lithium." - Charlie Ledley
"Any business where you can sell a product and make money without having to worry how the product performs is going to attract sleazy people." - Sy Jacobs
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