Whenever anything sounded too good to be true, my father used to say, “That’s just a come along.” I don’t know where he got that expression. He may have been mimicking the carnival barker’s cry to “Step right up” or “Come along over here,” or perhaps he was referring to a come along winch, a powerful tool used to move heavy objects. But his meaning was clear: it was a scheme designed to separate you from your money.
“The Big Short: Inside the Doomsday Machine” describes a “come along” of epidemic proportions. When I first heard about the book, I imagined that reading about the U.S. subprime mortgage meltdown would be about as exciting as watching paint dry. Then I discovered that Michael Lewis, former bond trader turned best-selling author, could probably write about watching paint dry and it would be spellbinding.
The underpinning of “The Big Short” is the story that we now know too well of the 1990’s lending boom: too many loans, given to too many people, too far above their means to repay. The flawed speculation was that housing values would only go in one direction―up. But in 2007, the economy faltered, and scores of borrowers couldn’t pay their loans. What had gone up came crashing down into a giant economic world-wide splat. Defaults soared and many housing, investment, and insurance giants that had helped to spin the web (Lehman Brothers, Bear Stearns, American International Group and others) got caught in it. Unfortunately, so did the public.
Lewis tells the tale through a quirky cast of characters. He describes how several financial contrarians, like Steve Eisman and Michael Burry, came out top of the financial crisis. First, they did the due-diligence, or investigations (which just about everyone else including oversight rating agencies like Standard and Poor’s and Moody’s) failed to do. And then they had the insight and the chutzpah to “short,” or bet against, the subprime bonds and ultimately walked away with millions of dollars, while other Wall Street traders bet the wrong way on the plumped-up goose of the housing market.
Although non-fiction, “The Big Short,” reads like a thriller novel. Lewis dives deep into the psyche of the main characters 
who, though obvious geniuses, look like they might also feel at home on “The Island of Misfit Toys.” Eisman, among the most likeable of the main cast, lacks impulse control, has no internal filter, and offers no deference to the rich and powerful. Late in the book, when the Bear Stearns CEO makes public excuses about the market, it’s easy to cheer as Eisman retorts, “And whose fault is that? This is how you guys wanted it. So you could rip off your customers.” And while it could be easy to feel sorry for another central player, Burry, with his one-eyed, mono-maniacal fixation and social isolation, it’s hard to feel too sorry for a guy who whose bet paid off in multi-millions and who was proven to be oh-so-right. This is a story about guys deemed to be the underdogs, who were anything but.
Lewis avoids dense, glassy-eyed explanations and industry jargon. He simplifies complex transactions like collateralized debt obligations, credit default swaps and reinsurance through adept story-telling that shows just how the financial sausage was made. The book does what numerous traders and executives could not and that is to give a simple, sound explanation about how their own financial transactions worked.
The book may set a record for the number of times that f*** or f***ing is used in a non-fiction work, but the language isn’t gratuitous. It ushers you into the minds (and the mouths) of the characters and their wise skepticism that saw beyond the smoke and mirrors.
Whether you do or don’t see the newly released hit movie, I highly recommend the book. In fact, if Dad was still alive today, I would give him a copy of “The Big Short.” I believe I know what he would say.