Summary of The Big Short: by Michael Lewis | Includes Analysis

By Instaread Summaries

Inside this Instaread Summary:

Overview of the entrie book

Introduction to the important people in the book

Summary and analysis of all the chapters in the book

Key Takeaways of the book

A Reader's Perspective

• Language: English
• Publisher: Instaread, Inc
• Release date: May 18, 2016
• ISBN: 9781683782117

Book preview

Book Overview

The Big Short: Inside the Doomsday Machine begins with author Michael Lewis taking a look back in astonishment at the fact that he was paid large amounts of money by a Wall Street bank to give investment advice to people as a young man with no formal training or experience in the field. When he left the job, he  wrote a book about his experiences called Liar’s Poker.

After the housing crash of 2008, Lewis sought out analyst Meredith Whitney, who accurately predicted the downfall of Citigroup, to ask her to share her list of others who foresaw the financial catastrophe that unfolded in 2007 and 2008.

Steve Eisman was an aggressive money manager who created his own hedge fund and made a fortune studying the markets as well as the buyers and sellers of mortgage bonds, then betting against them.

Dr. Michael Burry left  his medical residency and started a hedge fund called Scion Capital. He studied the market and realized that he could bet against the subprime mortgage loans by creating credit default swaps or insurance on the loans. Burry approached several large banks to buy credit default swaps and profited greatly as the country’s financial system fell apart.

Charles Ledley and Jamie Mai began their own hedge fund, and built their business by betting on extreme events that nobody else believed would occur. They used this mindset to quickly make a large amount of money. As they discovered all of the fraud within the system, they went to the media and the SEC, but could not find anyone who would listen.

These individuals used their experience, knowledge, and foresight to bet against the subprime mortgage bond industry that was booming and made huge sums of