Inside Job

The Big Short: Inside the Doomsday Machine by Michael Lewis (Norton, $15.95, 291 pages)

“The problem wasn’t that Lehman Brothers had been allowed to fail.   The problem was that Lehman Brothers had been allowed to succeed.”

If you read The Blind Side by Michael Lewis, and think this is going to be another warm and fuzzy story, think again.   This is a former insider’s telling of the reasons the American economy was virtually destroyed by greed in the early 2000’s and it will get you angry – or at least it should.   Here’s one example pointed out in the book…

It’s late 2006 and U.S. home values have just suffered their greatest decline in 35 years.   And, so, Goldman Sachs selected this time to give a bonus to each and every one of its employees – a little bonus of $542,000 (not salary, but some extra spending cash for the holidays)…   How does this make you feel?

If you’re a normal human being without any ties – familial or otherwise – to Wall Street, you should be infuriated by the knowledge of these practices; and there are dozens of examples provided by Lewis.   Yes, this is a tale of incredible hubris.  Lewis, who had once worked at Solomon Brothers, notes that Wall Street traders saw themselves as geniuses who were above reproach:  “(They had) the ability to see themselves in their successes and their management in their failures.”   In fact, however, Lewis well makes the case that these same self-proclaimed geniuses simply didn’t grasp the details of the game that they were playing.   And we all paid the price for their failures.

In just a few years, “One trillion dollars in (subprime-related) losses had been created by American financiers…”   Lewis is honest enough to say that if he’d remained on the Street, he might have been part of the problem:  “If only I’d struck around, this is the sort of catastrophe I might have created.”

“This woman (Meredith Whitney) wasn’t saying that Wall Street bankers were corrupt.   She was saying that they were stupid.”

This is also the story of one Dr. Michael Burry, a man who figured out that big money could be made off of the Street’s losses and ignorance – he decided to bet, big-time, against subprime mortgage tranches and won big-time.   Burry was a man who figured out early on (in 2007) that Wall Street’s rating firms were engaging in massive cheating – rating as solid risks mortgage packages that were pure losers.   One single pool of “crappy mortgages” (falsely rated) – based on home loans made between April and July of 2005 – was allegedly worth three-quarters of a trillion dollars, but the entire pool was basically worthless.

The problem with Lewis’ account, which he states began as a policy paper on the roots of the modern-day American fiscal crisis, is that it reads like a dry white paper.   There’s no sense of outrage, no moral center.   Even while Lewis complains that the U.S. government (and, specifically, the White House) transformed Wall Street firms into public corporations, which were then deemed to be “too big to fail,” there’s no sense of anger.   Thus, we’re left with a sense of amorality, instead of immorality, in this presentation.

This is an interesting and easily read account, but it’s quite frustrating and not recommended.   If you want to enjoy something written by Michael Lewis, try The Blind Side.

Joseph Arellano

This book was purchased by the reviewer.  

Advertisement

Coming Up Next…

A review of The Big Short: Inside the Doomsday Machine by Michael Lewis, author of The Blind Side.

A Hazy Shade of Winter

So Much for That: A Novel by Lionel Shriver (Harper; $25.99; 433 pages)

“…the biggest tipoff that she was not in as much denial as she feigned was that Glynis had no interest in the future.   That left everyone pretty much stumped.   When you weren’t interested in the future you weren’t interested in the present either.   Which left the past, and she really wasn’t interested in that.”

This is a fictional tale of two American families in 2005.   They are typical, yet atypical in that they are both being worn and ground down by the twin pressures of a fiscal recession and deadly diseases.   The primary family, the Knackers, is composed of Glynis, sculptress, wife and mother and mesothelioma victim (a form of cancer that is killing her quickly); Shep, the ever dutiful husband who is a millionaire on paper; their absent college age daughter Amelia; and their clueless teenage son Zach.   Their friends, presumably Jewish, are Jackson and Carol Burdina.   Jackson is an angry co-worker of Shep’s who is insecure about being married to the ever-beautiful Carol.   They have two daughters, Flicka, who was born with Familial Dysautonomia (FD) – which will likely kill her by the time she is 30 – and Heather, their healthy overeating daughter who is growing larger by the hour.

Shep Knacker’s longtime dream is to cash in on his home improvement business in order to live what he calls The Afterlife on an island.   However, just as he sells his business for a cool $1 million, Glynis is diagnosed with the cancer that gives her a little over a year to live.   The longer Glynis lives, the more Shep’s Merrill Lynch account will be drawn down.   Shep quickly learns that a million dollars does not last long in a world where an aspirin costs $300 and a regimen of chemotherapy goes for $30,000.

“That had been one revelation, insofar as there was any: everything was equal.   There were no big things and little things anymore.   Aside from pain, which had assumed an elevated position… all matters were of the same importance.   So there was no longer any such thing as importance.”

One of the ironies of this tale is that while 51-year-old Glynis fights to hang on to life to the point where she becomes a near madwoman, young Flicka looks forward to the day – at 18 – when she can end her own.   And while they trouble themselves with such basic issues, Jackson becomes obsessed with penis enlargement surgery – something he presumes will please his attractive spouse.

“(It was) a world where oblivion was nirvana, where one was never allowed the hope of no pain but only of less.”

Glynis eventually becomes angry as her supposed friends either treat her like a woman already dead, or fail to follow through on their original promises to be there for her when the going gets rough.   Yet, she stubbornly refuses to ever accept a fatal diagnosis, even while undergoing a year-long regimen of toxic chemo.   She begins to view herself as a marathon runner who never seems to be able to complete the 26th and final mile.

Shep is a man who has prided himself on being responsible his entire life.   He’s the man who has always paid his own way and played by the rules.   But others tell him that he’s a responsible taxpaying sucker especially when Medicaid won’t buy Glynis even a single aspirin for her pain.   He’s not sure what to do until, surprisingly, his ever raging and thought-to-be-dense friend Jackson sends him a message.

This is a work about human values and morals in the face of impending financial ruin and death.   What would we do – any of us – in order to keep our health and our homes for an extra day, week, month or year?   In this weighty and timely fictional tale you will find an answer.

Highly recommended.

This review was written by Joseph Arellano.   A review copy was provided by the publisher.   So Much for That is also available as an unabridged audio book and as a Kindle Edition download.