The Big Short

Michael Lewis

The Big Short



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Our story begins in the years leading up to the world financial collapse of 2007-08, which has been coined “the great recession”. A group of visionaries, referred to by some as "madmen", have the courage to challenge the global narrative and decide to bet against the entire financial system. The Big Short is the story of events, as experienced by this group of visionaries, who managed to remain true to their instincts, with courage, commitment and tenacity, until they were able to achieve success. While the ship of international finance was sinking, those who had learned to surf, earned themselves millions.

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Analysis and key concepts


The mortgage bond market in the United States: greed and mortgages granted to everyone


They decide to bet against the whole system that supports them


Two important mental attitudes in the world of finance: wanting to understand what is really happening and rejecting widespread opinions


The obscurity and complexity of the bond market are intentional: people’s lack of understanding can help leverage ignorance and fear


Rating agencies disguise risk by making it more complex and bonds are mispriced


A tug-of-war: While the world of finance pulls on one side, few people pull on the other


A game of Chinese boxes creates the bubble that ultimately destroys an entire system


Betting against subprime mortgage bonds means betting on the collapse of democratic capitalism and on the structure of an entire society




Take-home message

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Many useful tips to:

  • Better understand the dynamics that led to the bursting of America’s 2008 speculative finance bubble.
  • Appreciate that the world of finance is deliberately made incomprehensible to ordinary people and also to insiders.
  • Understand that Wall Street's greed has had the power to blind traders to a heralded disaster.

Michael Monroe Lewis was born in New Orleans in the United States of America, and attended Princeton University, where he graduated in Art History. After attending the London School of Economics, he began his career on Wall Street in the 1980s as a bonds salesman at Salomon Brothers. In his thirties, he became one of America’s best-known authors and financial journalists. He has also been writing for Vanity Fair since 2009, specialising in business, finance, and economics. He is especially well-known for his non-fiction work and reporting on financial crises and behavioural finance.

Publishing house:

W.W. Norton & Company