Nowadays whenever we turn on the TV or radio, there seems to be one depressing financial tale after another. The Great Recession is making many lives tougher and seems to be taking (rather too much) time up of the world’s media. Many of us might be wondering why exactly are we in the pickle we’re in? One interesting set of answers are those provided by journalist Michael Lewis.
Lewis started his career as a bond salesman during the boom on Wall Street during the 1980s which has given him a good understanding of the mechanics of the economic system and finance. His first book, Liar’s Poker, was written in 1989 and is a semi-autobiographical account of his time at Salomon Brothers, an investment bank.
The book both looks at how he moved from college to the bank, the personalities of his colleagues, and it also examines the creation of slightly fragile mortgage bonds. There is no coincidence that the book was called Liar’s Poker rather than Foxy Bingo or A Pleasant Game of Chequers – the deregulation of the Markets clearly leads to trouble on Wall Street.
Now we wind forward twenty odd years to The Big Short which came out in 2010 and details how the credit bubble of the mid to late 2000s led to the pickle we find ourselves in today. A ‘short’ incidentally is roughly means selling securities and then rebuying them once their price has gone down. Basically, it is a way of making money when the market is tanking. The book is a very well explained and entertaining introduction to the beginnings of the Great Recession.
Most recently, Lewis has published Boomerang: Travels in the New Third World which looks at the continuing financial implosion in various countries across the world – he visits those countries that have famously reduced themselves to bankrupcy (or nearly) like Iceland, Ireland and Greece, but also goes to the famously parsimonious Germany to see how they are bearing up too. It’s all very entertaining, if a little depressing. Alternatively you could read Lewis’s sports books, The Blind Side: Evolution of a Game looks at NFL, Moneyball: The Art of Winning an Unfair Game looks at baseball (and has been made into a film starring Brad Pitt) as does Coach: Lessons on the Game of Life.
So, if you want to learn how it all went wrong and have a laugh at the same time. The books of Michael Lewis might be a good place to start.