The Big Short: Inside the Doomsday Machine is a non-fiction book by Michael Lewis about the build-up of the United States housing bubble during the s. The Big Short: Inside the Doomsday Machine Paperback – February 1, by . Author interviews, book reviews, editors' picks, and more. Read it now. Editorial Reviews. From Publishers Weekly. Although Lewis is perhaps best known for his Everything Lewis has touched since has turned to gold, and The Big Short seems to be another of those books, combining an incendiary, timely topic.
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The Big Short book. Read reviews from the world's largest community for readers. From the author of The Blind Side and Moneyball, The Big Short tel. From the author of The Blind Side and Moneyball, The Big Short tells the story of four outsiders in the “One of the best business books of the past two decades. Both of his books about sports became movies, nominated for Academy Awards, as did his book about the financial crisis, The Big Short. His other works.
When they demand their money back, he places a moratorium on withdrawals. Hedge fund manager Mark Baum Steve Carrell joins Burry in investing in the credit default swap market and recognizes that poorly structured loan packages known as collateralized debt obligations CDOs have received AAA ratings and are exacerbating the mortgage crisis.
After discovering that questionable innovation in the CDO market has fueled massive risk in the markets, Baum concludes that the housing bubble will ultimately lead to the collapse of the U.
Baum was based on real-life hedge fund manager Steve Eisman. Vennett was based on Greg Lippmann, a former bond salesman at Deutsche Bank.
After Shipley and Geller make a series of successful bets against the housing market, Rickert grows angry that they have profited off the downfall of the U. Rickert was based on Ben Hockett, a former trader at Deutsche Bank.
Though they make a fortune on their trades, the duo is left highly dejected about the amount of risk taken and the moral hazard that ultimately would fuel the bailouts of several banks.
Shipley and Geller would later try — and fail — to sue the ratings agencies for their misleading rankings of mortgage-backed securities and mortgages.
Stylistic Approaches Financial terminology and the chronology of the financial crisis is highly complex and difficult for a traditional audience to comprehend in a two-hour movie. The film production team employs a simple, yet stylistic approach to defining the tools, from collateralized debt obligations CDOs and tranches to credit-default swaps and mortgage-backed securities , that helped sink the global economy.
For example, the film explains the origination and complexity of a synthetic CDO in a scene where actress Selena Gomez plays blackjack. However, when Gomez loses the hand — or the housing market falls — those increasingly larger side bets set off a domino effect that create larger losses at the table and the economy, respectively.
Next, audiences receive a visual aid when learning the definition of a tranche. The idea behind an asymmetric risk profile is you give yourself the opportunity for massive profits in return for a relatively minor expected loss.
After these types of trades came to light following the blow-up of the housing market, this became the dream — for fund managers and investors alike. Burry was a doctor who shared his investment ideas on Internet forums.
His ideas were so good they attracted the attention of one of the most successful hedge fund investors of all-time, Joel Greenblatt. But when Burry got interested in betting against the housing market in , Greenblatt, along with many other investors in the fund, balked. Burry so believed in his bet against these terrible housing loans that he eventually put a gate on his fund. In hedge fund speak, this means he made it harder for his investors to withdraw capital.
I respected him and looked up to him. He and his investors made out like bandits from his housing short. But can you blame him? Burry was a tried and true value investor so betting against the housing market was an enormous style drift on his part.