Book reviews: The Big Short, The Zeroes

Michael Lewis, The Big Short: Inside the Doomsday Machine

The story of the subprime mortgage crisis, from the point of view of various traders who were betting it was all a crock for a long time. I originally learned about this book on The Daily Show. Mmm, March 2010. A good time for our local Bing Lee: we went and bought a washing machine with a decent spin cycle and I suddenly put my foot down and said that if I was going to be spending 2 hours each night putting our then young baby to sleep we were going to have a TV recorder to tape The Daily Show and The Colbert Report.

If anyone is interested in the genesis of the Ada Initiative, it’s actually that washing machine, because I wrote a blog entry about it that inspired Valerie to get in touch with me after some years of radio silence. (We weren’t mad at each other, we just usually only talk when we have a project cooking. Or when we have washing machine thoughts, it seems.)

Ahem, Lewis’s book. A fun tale of investment outsiders who were shorting subprime mortage bonds by buying credit default swaps against them. They ranged from cynical to apocalyptic. They were mostly social misfits or investing misfits or both. (Aren’t we all misfits?) It’s a well-told tale, but it’s not a true insider’s tale. What was happening at Goldman Sachs, again?

Caution for: it’s from a trader point of view, so while at least one person profiled believed he was watching evil happen, we aren’t talking radical critiques of capitalism or anything here.

Bonus: As I said earlier, I wish I could read expert reviews/rebuttals for almost every non-fiction book I read. And this time I could. Check out Yves Smith, Debunking Michael Lewis’ The Big Short.

Randall Lane, The Zeroes: My Misadventures in the Decade Wall Street Went Insane

Another insider-but-outsider tale of the bond market of the Naughties (the Zeroes, as Lane calls them). Lane was the co-founder of Trader Monthly, a glossy freebie magazine for Wall Street traders. This brought him into contact both with traders themselves, jockeying or not to be profiled as hot up-and-comers, and luxury goods advertisers keen to get in on bonus season.

It’s about equal parts how-my-magazine-startup-failed, which is interesting enough—a combination of it-could-happen-to-anyone road bumps, and getting into business with some real jerks—and what-were-they-like-these-traders. Entertaining enough as a library loan (which is how I read it), but I probably wouldn’t have actually purchased it. Still a bit of an outsider’s tale.