The Big Short

The Big Short is Michael Lewis's 2010 narrative non-fiction account of the 2008 subprime mortgage collapse, told through the four small groups of investors who saw the catastrophe coming and bet against the broader American housing market. The structural premise is the four-way ensemble portrait of Michael Burry (the one-eyed neurology-fellow turned hedge-fund manager who first identified the structural fragility of the subprime mortgage-backed-securities market and convinced the major Wall Street banks to write him the first credit-default swaps against the broader subprime CDO market), Steve Eisman (the FrontPoint Partners hedge-fund manager whose late-2005 conversion to the Burry thesis drove the broader Wall Street recognition of the impending collapse), the Cornwall Capital garage-based three-person partnership (Charlie Ledley, Jamie Mai, and Ben Hockett, who somehow positioned themselves into the same trade from a Berkeley garage), and Greg Lippmann (the Deutsche Bank trader who built the broader institutional infrastructure for the structural-short trade).

Lewis's structural method is the patient four-way ensemble construction across approximately the years 2003-2008 with the operational technical material (the structure of the subprime mortgage-backed securities, the operational mechanics of the CDO and CDO-squared instruments that converted BBB-rated tranches into AAA-rated synthetic assets, the role of the ratings agencies and the broader regulatory failure) rendered with the kind of patient narrative-non-fiction specificity that the contemporary American narrative-non-fiction tradition has been working toward across the past three decades. The Burry chapters across the front and middle of the book carry the structural emotional weight; the Cornwall Capital chapters across the middle provide the structural comic-and-improbable counterpoint. The Eisman chapters across the back half deliver the structural moral payoff that the entire book has been building toward.

Recommended as required contemporary American narrative non-fiction reading, as the right Lewis entry point alongside Moneyball, Flash Boys, and the broader catalog, and as one of the canonical contemporary American books on the 2008 financial crisis. The 2015 Adam McKay film adaptation with Christian Bale, Steve Carell, Ryan Gosling, and Brad Pitt won the Academy Award for Best Adapted Screenplay. The Jesse Boggs / Jonathan Davis audiobook is the definitive audio production. Five stars without reservation.