Before I read The Big Short by Michael Lewis, I had no idea what credit default swaps and collateralalized debt obligations(CDO’s) were. But Lewis does a great job explaining what went on during the years leading up to the subprime mortgage crisis and where it all went wrong. I always knew that the economy got royally f’d by the housing market in 2007-2008 but I never really knew why until reading this book. I was in college during 2004-2009 and the economy was really the least of my worries during that time.
The Big Short follows the stories of several Wall Street outsiders who bet against the housing market using credit default swaps and ended up making hundreds of millions of dollars. It was refreshing to read a non-fiction book that used personal histories and interviews to play out one of the biggest financial crises of the past 100 years. Michael Lewis is best known for his non-fiction sports writing(The Blind Side and Moneyball) but his first best seller was also written from the perspective of a financial insider and was titled Liar’s Poker. [Continue reading]