A Crash Course on the World Financial Crisis, Courtesy of Michael Lewis
If it's hard for you to imagine laughing out loud while reading a book on the subprime mortgage crisis, you're probably not alone. But Michael Lewis has a gift for storytelling and in The Big Short: Inside the Doomsday Machine he manages to make the mess understandable, readable, and yes, even enjoyable. Lewis follows the key players who predicted the housing crash, explaining how they saw what nearly all of Wall Street did not. In clear terms, he explains the process of how bad loans got repackaged into bonds and sold off to unsuspecting investors.
My knowledge of finance was extremely limited before reading this book, and there certainly were details that went over my head. But part of Lewis's skill is that he makes the book accessible to a wide audience, and for amateurs like me, he does a remarkable job of explaining the most essential points. As someone who reads largely fiction and poetry, I never imagined a book on finance could be a page-turner. But Lewis builds a novel-like tension as he leads up to the 2008 crash that nearly obliterated our economy. If you want to understand what happened, this is the book to read.
The financial crisis was not limited to the United States. In Boomerang: Travels in the New Third World, his follow-up to The Big Short, Lewis takes us on a tour of the countries hit worst by the "financial tsunami," examining the circumstances and cultural factors surrounding their downfall. Visiting Iceland, Greece, Germany, and Ireland, Lewis takes a close look at how the crisis became global. His tour ultimately takes him back to the U.S., landing in California, one of the states in the deepest trouble. It is a terrifying story but one that Lewis illuminates with his typical fluid prose and humorous anecdotes. With the economy and unemployment one of the main focuses of the 2012 presidential election, Boomerang could not be more timely. Both of these books are sure to make you instant fans of Michael Lewis.