Michael Lewis has created quite a niche for himself by writing about business and finance. You may know him from The Blind Side, but his real strength is shown in such books as The New New Thing about the emergence of the Internet revolution and its affect on how we do business, Next about the dot-com bust and the (then) future of the Internet, and The Money Culture about various foibles of the financial world told through a collection of his essays from such sources as The New York Times, The New Republic, and Wall Street Journal.
But it all started with Liar’s Poker, a fascinating book about his time working for Salomon Brothers – a time that coincided with the invention of a market for mortgage bonds, which led to Michael Milken and his junk bonds. And his latest book, The Big Short continues in that same vein by exploring how desire for money (okay, let’s just call it greed) led to the growth of sub-primes, the bundling of low grade loans, and a blatant disregard of common sense.
And here’s why you care.
You cannot read this without asking how anyone could not see what was occurring. Of course, hindsight is 20/20; but there were people who saw what was happening, saw that things didn’t add up, and tried to warn anyone who would listen. (It should be noted that some of these people also made a lot of money because no one listened.)
For auditors, there is lesson after lesson in this book. Most of them have to do with general themes such as “don’t take their word for it” and “when you don’t understand something, figure it out.” But I’ll go with one of my favorites: “No one ever audits success.” Executives, investors, regulatory agencies, etc. did not want to look closely because it was all going so well.
It is unusual to review a book when you are only half-way done. But even if the remainder is nothing more than “The first day of my vacation I woke up. Then I went downtown to look for a job. Then I hung out in front of the drugstore” until Sister Mary Elephant calls an end to the recitation, this would still be a good, valuable, important book. Read any of Michael Lewis’ work. But get this one, read it, and learn.