Appearing Elsewhere: Review of The Big Short by Michael Lewis

My review of Michael Lewis’ new book The Big Short appears in the Christian Science Monitor this morning. If you’ve read Lewis before (Moneyball, Liar’s Poker), you know he can spin a good tale. The Big Short is no exception. The most rewarding aspect of the book, though, is that it provides a clear but comprehensive primer on the factors that caused the 2008 financial crash:

CDOs took the worst pieces of each subprime bond and recombined them into a new product that was meant to appear less risky than the sum of its parts. The gambit was like a meatpacker grinding together bits of bone and gristle and calling it top sirloin, and it worked because Moody’s and Standard and Poor’s – the meat inspectors of the financial world – were either asleep at the wheel or on the take, depending on your level of cynicism. Regardless, CDOs opened the possibility of an infinite regress of wagers – a bet on a bet on a bet – and enabled speculation in subprime mortgage bonds to reach the economy-destroying heights that it did.