Recently Read Vol. 1: A Michael Lewis Trio
By Ellie ZygmuntWhy and How I’m Talking About Books
I don’t read a pile of books so much as chain smoke them, the endpapers of one novel igniting the prologue of the next. “Are you at 100 yet?” friends will joke in mid-July, and some years it’s been close.
This year, however, I’ve been taking it slow. Instagram served me a desperate email reminding me of a story I posted two years ago today where my reading count was in the mid 70 volumes; this year, I’ve only just reached 35 books read.
“Shut up, only 35 books!” Yes, I know this is already much higher than the general population who, if surveys are to be believed, are barely able to read a menu in one sitting let alone a Booker nominee. The fact remains that, this year at least, I’ve been taking my time with reading and enjoying the slowdown very much. It’s opened up different possibilities within my reading, and certainly opened up space in my writing.
It’s in the spirit of that openness that I’m hoping to write more often here about what I am reading, starting with periodic gatherings of what I’ve recently finished.
Before I get to the books, these are the boundaries that define my critical position:
- I read books. This is not “consuming content.” Banish that phrase from your mind.
- By reading we participate in the work of making meaning.
- Critique is not the enemy of enjoyment.
- Enjoyment is not a guarantee of quality.
- Ratings are bunk.
Recently Read, Volume 1: A Michael Lewis Trio
Liar’s Poker: Rising through the Wreckage on Wall Street, The Big Short: Inside the Doomsday Machine, and Going Infinite: The Rise and Fall of a New Tycoon
As talk of an AI bubble started to circulate over the summer, what better writer could you turn to than Michael Lewis? While he hasn’t tackled AI directly, Lewis has become the bard of the bust. He’s the writer you consult for an explanation of esoteric financial concepts with stylish prose. So I went on a Michael Lewis bender, reading three of his books in a row.
Lewis’s first book, Liar’s Poker, chronicles his heady three years as a bond salesman at Salomon Brothers during the peak of the 1980s bond market froth. It’s a memoir of luck and lunacy, which Lewis, to his everlasting credit, realizes almost immediately. He correctly reasons that if a 20 something nobody like him can get a job trading millions of dollars, his employers have lost their grip on the plot. And so it goes: Salomon Brothers would lose millions in a series of market crackups made worse by leadership shooting at their own feet.
The Big Short revisits many of the beats of Liar’s Poker, not the least of which are the structural flaws of 80s Wall Street hubris still encrusted around the greedy heart of mid-aughts financial speculators. The Big Short is the story of the subprime mortgage crisis in all of its stupidity, and it’s here where the Lewis approach is displayed to tremendous effect. Derivatives and financial instruments are not scintillating on their own, but they become fascinating in the context of the fables investors tell themselves about their own intelligence and power. Narratives move markets, for better and for worse.
The self-awareness that led a 20ish year old Lewis to conclude he should walk out of Salomon Brothers before he blew it in Liar’s Poker has eroded by the end of Going Infinite. Going Infinite is yet another case of Lewis being in the right place at the right time: here he is at the side of Sam Bankman-Fried at the moment of FTX’s implosion, ready to survey the disaster scene of a fallen cryptocurrency empire.
A great many people found SBF so likeable and trustworthy that they handed him billions of dollars with no diligence beyond good feeling. Lewis seems to have absorbed the same charm offensive. SBF comes off as perpetually gifted child with a mind for math and altruism in Lewis’s telling, which glosses over the considerable damage that childlike approach did to a multi-billion dollar enterprise. Lewis also glosses over some absolutely alarming behaviour, including the majority of FTX’s founding team turning on SBF when he failed to properly disclose missing assets. Also under-examined: SBF’s habit of fleeing the country any time his secret on-again-off-again romantic partner, Caroline Ellison, asks if they can clarify their relationship (which is also leaving aside the fact said secret romantic partner is a walking conflict of interest: Ellison was the CEO of SBF’s hedge fund, Alameda Research). All the time Lewis spent among the investors and the whiz kids hampers a clear assessment of the situation.
As the subprime mortgage market reaches its zenith in The Big Short, one alarmed investor surveys the scene and concludes that something much worse than pure financial speculation is at work:
“…something must have come over [Steve] Eisman, for he stopped looking for a fight and started looking for higher understanding. He walked around the Las Vegas casino incredulous at the spectacle before him: seven thousand people, all of whom seemed delighted with the world as they found it. A society with deep, troubling economic problems had rigged itself to disguise those problems, and the chief beneficiaries of the deceit were its financial middlemen […]”
Heads in the sand. Warning signs ignored like so many pesky CHECK ENGINE lights on a dashboard. While there are people alert to the danger, but no one likes the bearer of bad news, even if the news comes dipped in gold:
“The subprime mortgage market in its current incarnation had never done anything but rise. The people in it who were regarded as successes were those who had always said ‘buy.’ Now they should really all be saying ‘sell,’ but they didn’t know how to do it. ‘You always knew that fixed income guys thought they knew more than you did,’ said Eisman, ‘and generally that was true. I wasn’t a fixed income guy, but here I’d taken this position that was a bet against their whole industry, and I wanted to know if they knew something I don’t. Could it really be this obvious? Could it really be this simple [?]’.”
What animates Michael Lewis’s work are persistent themes of greed, hubris, and a failure to notice when something is too good to be true. The investors who profited from shorting subprime mortgages made fortunes by reacting to the situation as it was, not what they hoped it would be. They were not subtle about their assessment: the key figures of The Big Short warned people about the coming crisis, stubbornly asserting the riskiness of lending people with no income outrageous credit to buy unaffordable houses. Speaking with them years later, some of those investors sound sound almost sheepish about the money they made. Almost.
Given the sudden uptick in library hold numbers on all three of these books, I don’t think I’m the only one wondering if the many catastrophes Lewis has chronicled over the years aren’t relevant again. The nature and degree of another financial crackup is still in the making, but it certainly feels like the current speculative party is at a peak. If history is anything to judge by, now would be the time to turn down the volume and sober up.
That probably won’t happen.
I read all of these books while sitting next to Lars as they played The Last of Us 2, a game likewise about people unable to break away from the patterns of history. In retrospect, it might have been too much calamity to handle at once. Layering the experiences amplified the sense of doom and frustration with strangers making horrible choices that cause unnecessary suffering. Multiple financial meltdowns and a zombie apocalypse feels like a regular Tuesday now. I desperately want the people in charge to make better choices, but have no ability to ensure that they do. That’s the other grim lesson from nearly a thousand pages of post-distaster financial market forensics: you can’t pull people out of the reality they’ve chosen, no matter how obviously self-destructive or disastrous it may be.
So: I’ll keep reading books and writing, preparing for the day the nonsense peaks and someone looks around asking, “Who could have seen this coming?” And then I’m going to toss three Michael Lewis books at them.
Block quotes from Michael Lewis’s The Big Short: Inside the Doomsday Machine.