“The Big Short” is Big Entertainment

I don’t like a lot of movies a lot, but I’d say I love “The Big Short” were I not prone to understatement.

In case you don’t know, it is about the collapse of the housing market in 2008 and under most circumstances it would never have become a movie.  Michael Lewis, the author of the book didn’t believe anyone would want to make it into a movie, let a lone a good one, but he turned out to be doubly wrong.   I don’t think he minds.

For the uninitiated the story is about several guys who, unlike just about everyone else, could foresee that the giddy rise in housing prices was a bubble about to burst and then found ways to bet on that eventuality using Wall Street financial instruments they created.   What makes the movie great, er, very good, is that these guys are all curious characters with interesting back stories portrayed strikingly through an excellent script peppered with humor.

Periodically some character says something to temper our enjoyment, reminding us that millions of people lost their homes and jobs as a result, but those sobering thoughts do not suck enjoyment from the story itself.

What does irritate is a statistic given at the end of the movie that only one man went to  jail despite the palpable guilt of many.   What the Obama administration settled for instead was large fines to the various companies involved while allowing those companies to deny intentional wrong doing.   THE BIG LIE!

My guess is the Obama team thought pressing for convictions would add to the shakiness of the financial system which they spent many of their efforts to shore up.  But the crimes ignored were so obvious that the government response is demoralizing.

For those who want to read more about that Matt Taibbi has written an interesting piece for Rolling Stone about an executive at JP Morgan who had a bird’s eye view of the corruption and tried to fight it the best she could, but her voice was stifled first by the company and later by the Obama administration.  Linked here.

Also, as good as the movie was, if you agree with that assessment, I think you’d find the book adding to your enjoyment as no movie can capture all the good parts of a book.   And Michael Lewis, whose books Money Ball and The Blind Side were also turned into good movies, is great at telling a story.

 

 

The Mortgage Crisis of 2008 Makes Good Summer Reading

At least as the story is told my Michael Lewis.

English: , author of the best-sellers Moneybal...

(Photo credit: Wikipedia)

If the name doesn’t ring a clear bell, a couple of his books were turned into the movies  The Blind Side and Money Ball.    And sports haven’t even been his strong  suit.   Exploring the nature of financial folly has, beginning with his first book Liar’s Poker about his days as a bond trader on Wall Street in the late 1980s.

I just finished his book Boomerang:  Travels in the New Third World.  Here he details his travels through Europe after the financial crash that prompted our still lingering semi-recession and gives insights into what unfettered greed combined with the capacity for self-delusion can lead to,  a complete run amuck.

But while the story might have a moral, Lewis makes it all fun and interesting and often thought provoking in only a couple of hundred pages.   For one thing, when you read about the struggles in the European economies now, this book will help you keep perspective on how shaky that collective enterprise is.

Here is a NY Times review of the book which might entice you more.

A nice companion piece by Lewis is The Big Short:  Inside the Doomsday Machine.    It deals with the insights and huge financial success of a handful of financiers in the U. S. who saw where the wild fire of greed was heading and how they could make a lot of money betting against the tide.   Some of them even warned Wall Street, but their message “the king has no clothes” went mostly unheeded.   The Wall Streeters blocked it out;  the possibility was too painful to contemplate.

Here is a NY Times review of that book.

What is clear in reading both books is how right Shakespeare was when he wrote:   “What fools these mortals be.”

All we can do is limit our propensity to destroy ourselves by establishing institutions, laws and regulations that are enforced to constrain this tendency.

Or desentivise it.   What fueled the fire of the great mortgage meltdown was the “system” did just the opposite.  It unleashed greed and allowed risking the money of others while  remaining unaccountable for losses, as the Lewis books well illustrate.