Posts Tagged ‘michael lewis’

The Big Short: Inside the Doomsday Machine is a 2011 book by Michael Lewis. It is one of his best, perhaps second only to Flash Boys. I reviewed it in 2014. I recently watched the film adaptation. Coupled with The Blind Side makes me look like I am on kind of Michael Lewis-film binge, which I only noticed afterwards.

It is a reasonably good retelling of how it happened in the book. Not that you can do it justice in a two-hour film, but it is a good summary. Occasionally one of the characters would break the fourth wall and introduce celebrities offering sarcastic explanations of how the banks fucked us.

Speaking of fucking, the one thing that draws my attention was the phone call between Mark Baum and Greg Lippmann. I’m sure in the book Lippmann actually told Baum how he was going to fuck him, rather than the watered-down reconciliation in the film.

The film even had a moral point at the end, discussing how basically nothing has changed and we are just repeating the same old patterns. And that is why I am moving to Iceland in two weeks…

The Blind Side: Evolution of a Game is a 2007 book by Michael Lewis. I reviewed it in 2014 and in another post discussed my thoughts about the story.

In 2009, it was made into a film, which, after a recommendation from someone, I finally got round to watching. It shares quite a bit in common with the book, while at the same time concentrating exclusively on the relationship between Michael and Leigh Anne.

That is the whole thing. It is not, to Elina’s relief, a film about American football. Nor is it, to my disappointment, a film about economic theory. It is a drama revolving around those two characters, with almost everything else cut out.

I thought having read the book helped me out on a number of occasions during the film. A lot of things made sense to me because I had read the details in the book. You would miss them if you had not, but maybe you just wouldn’t notice.

Michael Lewis’s book The New New Thing tells the story of James Clark, founder of Silicon Graphics, Netscape, Healtheon and myCFO. More accurately, it tells the tell of James Clark trying to programme his boat Hyperion, while in his spare time becoming a billionaire.

It is a strange story. Clark is almost certainly something special having made a huge amount of money with all this companies. He saw the future again and again. And he capitalised on this without actually making proper businesses.

Silicon Graphics was a business success. However, Netscape never was and was ultimately flogged to AOL (for shares) while Healtheon is a company I had not even heard of and had to look up on Wikipedia. There there is a short article to be found about how it merged with WebMD.

Clark’s skill seems to be creating an idea and giving it a spectacular IPO without ever really building a business. And he is very, very good at it.

Boomerang is almost a follow-up book to Michael Lewis’s The Big Short, looking at the fall out of the global recession across the rest of the world. And by the “rest of the world”, it is basically Europe.

He first looks at Iceland in which he talks to a fisherman that became an investment banker. The whole financial crises can be summed up in the following conversation.

“You spend seven years learning to be a fisherman?” “Yes.” “And after that, you spent months training at the feet of a master before you felt you were capable?” “Yes.” “So why did you think you could be an investment banker without any training?”

He then moves on to Greece and talks about how they got into their financial mess. He claims that almost nobody on Greece pays their taxes, every government official takes bribes and that public employees have completely overrun the government to the point where they now get paid two or three times what any sensible country would pay them. I do not know how true all of that is. He finishes up by discussing Ireland.

It is an interesting, and quite a concise book which made it pleasurable to read. Some of it seems rather shallow though. How much can you rely on the stereotypes of Icelandic and Greek people that are put forward in the book? Probably less than our narrative-over-statistics obsessed minds would allow by default. Especially when he begins to talk about the German’s apparent love of shit. I even read what I would interpret as a Holocaust joke. Several times.

Further, he seems to contradict his earlier writing. The final part of the book talks about how much Germany lost in the sub-prime mortgage collapse. In The Big Short he talks about how American banks created credit default swaps that they did not really understand and how one of the people who saw it coming was Greg Lippmann from Deutsche Bank. In Boomerang he proposes the exact opposite – that the American banks knew exactly what they were doing in selling worthless assets to German banks.

In fact, the more I think about it, the more I think that what Michael Lewis has written in this book is actually complete bollocks. The collective lesson I took from Silver, Watts, Kahneman and Taleb is that the financial crisis was too complicated to predict, but humans have a tendency to add a narrative after to try and explain it to themselves in simple terms. Then Lewis comes along and says the financial crisis happens because the Greeks are lazy, the Irish are stupid and the Germans have a shit-fetish.

Moneyball is a Michael Lewis book about Billy Beane revolutionised baseball by replacing the scouting staff of Oakland Athletics with one geek and his computer named Paul DePodesta. They started drafting based on statistics, rather than whether someone looked like a traditional baseball player. The result was that with one of the lowest payrolls in baseball, they became the first team ever to win 20 games in a row.

It is written in Lewis’ usual style of presenting the information in a story narrative and is essentially the same theme as many of his other books – how people have had a huge amount of success by exploiting inefficiencies in the market.

A very interesting read and makes you wonder how many areas of human affairs suffer from such inefficiencies. The answer is almost certainly, a lot.

Liar’s Poker is the first book Michael Lewis published and the one that transformed him from a bonds salesman to a writer. It tells the tale of how he came to work at Salomon Brothers and key figures at the company that oversaw rise and fall. It’s an interesting insight into the excess of Wall Street.

I’ve been thinking some more about why I did not find The Blind Side quite as satisfying a read as I had hoped for. I think it is because the story does not really fit together as well as it could have, and thus the ending was a bit of an anticlimax.

The early part of the book set out a clear narrative. The NFL was taking up to the fact that left tackle was a really important position while simultaneously Michael Oher but a quark of fate was both huge and nimble. It was a fairy tale story ready to be put to paper.

Unfortunately, it did not pan out that way.

The NFL had in fact woken up to the value of left tackle well before Michael Oher arrived on the scene. Far from being unique, the league had already sourced a collection of elegant giants to protect their quarterbacks.

He was drafted in 2009 by the Baltimore Ravens and despite trying him out at left tackle, he has spent most of his time on the right. That is not to say he is not an excellent player. The Ravens won the Super Bowl (after the officials refused to call blatant pass interference on what would have been the 49ers winning drive – I’m not bitter about it though) with him in the offensive line. However, re-write the book he did not. Bryant McKinnie was their left tackle.

That is not to detract anything from what is a wonderful story. It was a very moving tale and an enjoyable read.

Pretty disappointed by this book. It was a truly heart warming tale about how a rich white family brought a poor black kid into their home and turned his life around. But what I really wanted was an insight into an industry. That is what Flash Boys and The Big Short delivered.

That is not to criticise Michael Lewis as a writer. He is, as ever, poetic in his storytelling. It is a strange and wonderful story. However, it did not create the “I cannot put this down” feeling as much as the books of his that I have previously read.

The Big Short is a book by Michael Lewis that tells the story of the 2008 financial crises and some of the people who saw it coming. Lewis is a great writer. He takes a subject which is fundamentally rather dull and boring, and tells stories in such an accessible and engaging way that it is difficult to put it down.

It preaches a similar story to that of his later book, Flash Boys. That is that almost nobody in the banking industry really knows what is going on. They churn out new products and new systems so fast that none of them really understand it. Their, and our doom. But at least it makes good reading.

When someone says the phrase “high frequency trading” (HFT), most of us have no idea what it means. Even those of us with some idea, probably think it is trading by computers, but essentially doing what traders do – wheeling and dealing in an attempt to make some money.

Michael Lewis’s book “Flash Boys” tells a different story. High frequency trading is all about front-running. You want to buy 10,000 shares in Apple? Great, I’m going to buy them before you can and then sell them to you at a higher price. It’s illegal, or it was, but with the deregulation of central stock markets in favour of competition between markets, you can now exploit milliseconds it takes for them to talk to each other.

This caused huge investment into the history with HTF firms making enormous profits. The banks didn’t say anything because they were making money from selling the HFT companies the data they needed. The stock markets didn’t say anything because they were making money from the huge increase in trading activity. Everyone was getting rich from scalping the ordinary investor.

I say was, but the problem has not gone away. However, the book also discusses how former trader Brad Katsuyama has gone on to set up IEX, a private stock exchange that tries to eliminate all the unfairness in the market.

It is a fascinating by scary read. To see how totally wrong the entire banking industry is. We all kind of know it, but it really brings it home.