Michael Lewis's THE BIG SHORT, visiting the econopocalypse through the lens of LIAR'S POKER

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32 Responses to “Michael Lewis's THE BIG SHORT, visiting the econopocalypse through the lens of LIAR'S POKER”

  1. Anonymous says:

    I actually bumped into lampposts and such immersed in this book while walking to work. Wrote this review:

    bit.ly/9p8ZWo

  2. Metlin says:

    @KeithIrwin:

    I think he’d much rather prefer Michael “Big Swinging Dick” Lewis. ;)

  3. Antinous / Moderator says:

    The round earth thing is groupthink if you’re a flat earther. And let’s not even get into the Evolution echo chamber. ZOMG SHEEPLE! Don’t drink the koolaid!

  4. Anonymous says:

    Also saw him on “60 Minutes” last week Sunday (March 14).

  5. Anonymous says:

    Jamie Dimon got to keep his bonus.

  6. KeithIrwin says:

    I’m not sure why he’s ‘Michael “Liar’s Poker” Lewis’. Shouldn’t he be ‘Michael “Moneyball” Lewis’. That book made a way bigger splash.

  7. Pantograph says:

    So why this sudden outbreak of “groupthink” all over the place? (WMDs in Iraq, economic bubbles, NASA quality control) Lack of critical thinking? Lack of individuality? Too many unqualified people in positions of power? Lack of integrity?

    Whatever it is, the world is paying a high price for it.

    • Ialdabaoth says:

      Hypothesis: as systems and social networks become more and more complex, our rational mind’s capacity for dealing with them gets strained to the limit – and past a certain level of complexity, we simply find it easy to fall back on group consensus than to throw brainpower at a problem that’s probably over our heads anyways.

      It starts with only certain members of any group doing this, but as complexity increases, the percentage of people falling back on simple group-reinforcement behavior rises. Once a certain threshold is reached, the group-reinforcement behavior starts out-competing actual analysis, and the whole organization locks into self-protecting groupthink.

    • Boba Fett Diop says:

      I would say “all of the above,” much of it traceable to the active dismantling of the American educational system since the 1980s.

    • TheAntipodean says:

      “So why this sudden outbreak of “groupthink” all over the place?” Because there is ALWAYS groupthink all over the place. Behavioural economists show that we are often influenced by the herd, and often irrationally, and that this behaviour can be measured and predicted. Shiller (he of the famous Irrational Exuberance and Case-Shiller housing index) discussed this many times – this article is one I found accessible and cogent “How a Bubble Stayed Under the Radar”, NYTimes, March 2, 2008, http://www.nytimes.com/2008/03/02/business/02view.html?_r=1&ref=business&pagewanted=all

    • Shakey says:

      “groupthink” is not a sudden phenomenon. It actually a pretty common human behavior. Charles Mackay wrote about this in his book Extraordinary Popular Delusions and the Madness of Crowds. It talks about group hysteria like witch hunts and economic bubbles of the past like Dutch Tulip bulbs and The Mississippi Company. To quote Mackay “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” They book is online and can be read at project Gutenberg http://www.gutenberg.org/etext/636

  8. sing it, baby says:

    I love the part where Bush directs Paulson to “lotto our way out of this son-of-a-bitch”.

  9. asuffield says:

    Is this fact or fiction? I can’t really tell. (I’m not sure if you can either)

  10. Brainspore says:

    It’s more than a little disheartening to know that these same characters are now the ones running the “cap & trade” scheme that’s supposed to save us from greenhouse gases.

    • Ambiguity says:

      It’s more than a little disheartening to know that these same characters are now the ones running the “cap & trade” scheme that’s supposed to save us from greenhouse gases.

      I think you’re starting to get it… :)

      @Pantograph

      I’m not sure this is a recent phenomena. “Group think” seems to have been with us since recorded history began, and one could speculate even earlier. If one were trying really, really hard to be optimistic, you could argue that the fact that many people are finally noticing it is a positive development.

    • Ernunnos says:

      That’s not the purpose of cap & trade. It’s just another mechanism of wealth transfer. The costs get passed on to anyone who buys energy or products that incorporate energy. (ie. Everything.) It’s a sales tax by another name. This sales tax will then be used to fund a new market (ie. casino) which will be manipulated by the usual suspects for the benefit of the same. When the FIRE economy collapses, you turn it into a FIRE+CC economy. Whatever else these people are, they aren’t dumb, and they don’t want to trade their Maseratis for tractors, as Jim Rogers suggests.

  11. jima says:

    The Big Short is also discussed in Salon today, where Andrew Leonard notes that the book has a large number of one-star reviews on Amazon.com from Kindle owners that are peeved the publisher doesn’t have a Kindle version available.

    • Latro says:

      Well, while I’m not particularly of the persuation that one is entitled to have anything at any price that one wants and all that…

      … the book is in ePub format at Penguin Books at 25 pounds, which is a bit … pricey… I think.

      Pity cause I really want to buy it.

    • Anonymous says:

      RE: lack of kindle version.

      Gives this quote on Amazon for it’s Kindle product a dash of irony:

      “This is the future of book reading. It will be everywhere.” Michael Lewis, author of Moneyball and Liar’s Poker.

      ‘Everywhere’ you say Michael, I’m sure there will be some exceptions..

  12. JayConverse says:

    There’s a good recent NPR podcast with him on Fresh Air with Terry Gross, too.

  13. ADavies says:

    Went to see him speak at Politics and Prose (DC bookstore) today.

    Big take away was when someone asked if anything’s changed since the market crash (like better regulation, or more responsible corporate behavior). After he got done laughing, Lewis said no, basically nothing’s changed. It should, and it might if we agitate enough for it.

    Bought the book after the talk was over.

  14. Roy Trumbull says:

    In Liar’s Poker Lewis pointed out that while there was a law concerning trading on inside information in stocks there wasn’t such a law for bonds.

  15. Anonymous says:

    Michael Lewis was on the Daily Show this week, talking about the book. For people in the UK I’ve included the link to 4OD for it;

  16. spocko says:

    But I heard on talk radio that the reason that there was a big melt down was directly connected to Fannie Mae and Freddy Mac having to give loans to people who couldn’t pay them! They want their listeners to look at their less fortunate neighbors. They don’t want their listeners to look at the Wall Street players.

    • Ernunnos says:

      It’s not a dichotomy. Bad loans issued to people who couldn’t pay are the weak foundation of a huge, rickety structure. If they’d been good loans issued to people who could pay, then there would have been nothing fraudulent about the high ratings attached to those securities, they never would have gone bad, so credit default swaps sold against them wouldn’t have been called in, and bankers would not have to play games with their balance sheets to stay solvent.

      Some people got loans they couldn’t pay, others magnified the effect of those loans through complex financial instruments. There’s plenty of blame to go around.

      In my opinion, the chief blame lies with the lenders who discarding the traditional debt-to-income ratios and credit standards that served to protect the interests of both consumers and financial institutions. That is the traditional job of lenders, and they abandoned it completely. Bankers got paid to rubber-stamp loan applications. That is itself a form of fraud, no different than a “no show” job.

      • jjasper says:

        If they’d been good loans issued to people who could pay, then there would have been nothing fraudulent about the high ratings attached to those securities, they never would have gone bad, so credit default swaps sold against them wouldn’t have been called in, and bankers would not have to play games with their balance sheets to stay solvent.

        And if me mam had wheels instead ‘o legs, she’d be a wagon.

        Yes, the loans were given to people with poor credit, but only an idiot stops here without wondering why there was such a demand for these loans. It’s because the banks were paying people to make them so they could market them. There’s a short supply of good credit out there, and the credit market, if it was opened to people with bad debt could explode. And it did.

        No one is denying that the loan companies issued bad loans, but the banks that flooded the credit markets with them knew exactly what they were buying. No one forced them to market those debts. In fact, most of the drive to create those bad loans came from banks that were flooding the market.

    • jjasper says:

      Apparently, Fannie and Freddie put guns to the heads of all of those wall street execs, forced them to buy the bad debt, then forced them to lie to investors about how stable the market for bad debt was. I heard it was Bill Clinton who held the actual gun, even.

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