The Big Short by Michael Lewis
The Big Short by Michael Lewis
Lewis starts off with the mixed reception of LiarsPoker where he felt he was describing the end of an era, and yet in the same book kids from Ohio State saw an opportunity and the method to get into Wall Street.
Having been burnt once, Lewis only details the subprime trades that he feels are worth copying. He intentionally left out the toxic MagnetarCDOs trades, which refueled the subprime fire.
Which leaves the traders he wants college kids to emulate: Michael Burry's metalhead diligence in scouring SEC filings, creativity in creating a shortable product, and persistence in convincing Wall Street banks to make a market; Cornwall Capital's slackers doing good research on mis-priced options; and followed up by Greg Lippmann and Steve Eisman as the cantankerous industry-insiders who trade against the system.
Despite this being a best-seller, one can look around the subprime wreckage and see analogous seemingly profitable trades available today. This probably has more to do with human nature, than with the story at hand.
Eisman had a curious way of listening; he didn't so much listen to what you were saying as subcontract to some region of his brain the task of deciding whether whatever you were saying was worth listening to, while his mind went off to play on its own. As a result, he never actually heard what you said to him the first time you said it. If his mental subcontractor detected a level of interest in what you had just said, it radioed a signal to the mother ship, which then wheeled around with the most intense focus. "Say that again," he'd say. And you would! Because now Eisman was so obviously listening to you, and, as he listened so selectively, you felt flattered.