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In The Big Short, the best-selling nonfiction author Michael Lewis tells us that one of his protagonists, a hedge-fund manager named Michael Burry, spent the end of 2004 and the beginning of 2005 reading dozens of 130-page mortgage-bond prospectuses, and scanning hundreds more. Burry was certain that he was the only person—apart from the lawyers who drafted them—who actually read these prospectuses. He was certain because the prospectuses were “mind-numbingly tedious,” and because if others had read them, they would have noticed what Burry noticed: that mortgage lenders were lending to people who could never hope to repay the money they borrowed. The housing market, the one that everyone believed could not fail, would in a few years do just that.

The problem for a writer trying to tell the story of the 2008 financial crisis is that it necessarily involves a lot of mind-numbingly tedious documents, statistics and jargon. Is it possible to retain an audience’s desire to understand the crisis in the face of phrases like “collateralized debt obligation” and “credit default swaps on subprime mortgage bonds”? The film version of The Big Short tackles this difficulty head-on, first calling the viewer’s bluff (“Does it make you feel bored, or stupid?” the voiceover asks. “Wall Street loves to use confusing terms to make you think only they can do what they do…”) and then bringing in celebrities to introduce some of the trickier financial concepts. Margot Robbie appears in a bubble bath, drinking champagne and explaining subprime mortgages (“Whenever you hear subprime, think: shit”) and what it means to short a bond. The chef Anthony Bourdain chops up leftover fish and throws it into a fish stew, illustrating how previously unsellable mortgage bonds are recombined into a collateralized debt obligation.

Lewis had to find other ways of keeping his audience’s attention. His approach in The Big Short (2010) is the same as the one he has been using since the start of his career in the late Eighties, whether writing about finance, baseball, football or Silicon Valley: take one or several brilliant oddballs and follow their path through the relevant industry as they transform it. Explaining the transformation necessitates explaining the status quo, and so the reader picks up a history of subprime-mortgage lending—or internet-startup culture, or player analysis in baseball—along the way, their interest in the hero or heroes’ progress pulling them through the more jargon-heavy sections. The brilliant oddballs in The Big Short are a handful of hedge-fund managers who made a lot of money from predicting the subprime-mortgage crisis.

It’s an extraordinary choice to write a book explaining the events of 2008 that asks its readers to root for a group of millionaires, let alone millionaires who spent several years hoping for the collapse of the economy so they could become richer still. It’s even more extraordinary that, of all the explanations of the financial crisis, this is the narrative that has turned out to have the greatest public appeal. The Big Short spent 28 weeks on the New York Times nonfiction best-seller list. The film version, directed by Adam McKay and released in December 2015, has been a critical and commercial success, nominated for five Academy Awards, winning Best Adapted Screenplay and making $133 million at the box office.

Lewis has always tracked public interest in business and finance: the rise of investment banking in the 1980s, Silicon Valley in the late 1990s and early 2000s, Wall Street in the 2010s. His fast-moving narratives don’t explicitly advance a particular ideology, nor do they ask readers to worry too much about what exists beyond the events they portray. And the undemanding quality of Lewis’s books made him an appealing guide to the financial crisis in the years immediately following 2008. He simplified, explained and entertained at a time when readers didn’t know what to think about the crisis or what to expect from it.

Now, though, its consequences are seen and felt everywhere. Largely absent from Lewis’s The Big Short, they are ever present in its onscreen version. The differences between book and film, released half a decade apart, reflect changes in the public’s attitudes towards the crisis. They also suggest that the kind of financial story Lewis tells may have reached its expiration date.

Think of a depiction of eighties finance and the chances are it’ll be something fictional: the film Wall Street or Tom Wolfe’s The Bonfire of the Vanities. Both came out in 1987; the next few years saw the release of Working Girl and the film adaptation of Wolfe’s novel. In 1991, Bret Easton Ellis’s American Psycho took Wolfe’s shallow, self-regarding bond tradesman Sherman McCoy to the next level with its serial-killer investment banker. These works introduced the public to the new banking culture: its greed and arrogance, its sums of money unimaginable to the poor fools stuck in ordinary jobs.

Many of the notable representations of the 2008 financial crisis, by contrast, have been nonfiction, offering explanation rather than illustration: Andrew Ross Sorkin’s Too Big to Fail and the film based upon it, the Matt Damon-narrated documentary Inside Job, John Lanchester’s I.O.U.: Why Everyone Owes Everyone and No One Can Pay and David Graeber’s longer view on the same subject in Debt: The First 5,000 Years. Among the writers who have set out to explain the crisis to lay readers, many are, of course, business reporters and academics (Sorkin and Graeber, respectively). At the other end of the spectrum is John Lanchester, who offers himself as a guide to twenty-first-century finance on the basis of his ignorance. In the introduction to How to Speak Money, his glossary of financial terms, he describes spending the first four decades of his life almost entirely lacking financial knowledge and then acquiring it in the course of painstaking research for a novel he was writing. If he can do it, the logic goes, so can you.

Lewis stands somewhere between Lanchester and the financial columnist or economics professor. He has a master’s in economics (London School of Economics) but he majored in art history (Princeton). He worked for a few years on Wall Street and in London before becoming a financial journalist, but he’s also written books about sports and politics, as well as a series of columns on fatherhood for Slate. His fondness for pastel shirts and pale sports jackets gives him the look of a successful businessman on vacation, but he also has the tan, strong jaw and slightly messy sandy hair of a movie star who is aging well. In other words, Lewis is the ideal person to explain the financial crisis to people who don’t read the business pages: experienced and knowledgeable, but not so immersed in the world of finance that he’s unable to communicate with people outside it.

He’s also done it once before. Part memoir, part financial history and part anthropology, Lewis’s first book, Liar’s Poker (1989), describes his experience as a bond salesman in the years leading up to the stock market crash of October 1987. The book opens with a young Lewis joining the Salomon Brothers training class of 1985. Salomon, reportedly the model for the fictional firm in The Bonfire of the Vanities, was by the early Eighties the most profitable investment bank in the world. Liar’s Poker was received as an exposé of the greed and excess of Wall Street, a nonfiction counterpart to Wolfe’s novel, but in the many interviews Lewis has given since the book came out, he has denied that this was his intention. He wanted to introduce readers to a new era in finance, he says, and vaguely hoped that in doing so he might persuade a few college students to follow their passions rather than go into banking. It didn’t work out that way: shortly after the book’s publication, Lewis was inundated with letters from college students asking him for further tips to get onto Wall Street. “They’d read my book as a how-to manual,” he writes in the prologue to The Big Short.

It isn’t hard to see how Liar’s Poker might kindle or stoke a desire to go into finance. Yes, it portrays Wall Street as full of idiots, and yes, it shows these idiots being rewarded for mediocrity, but it also suggests that if you’re better than the idiots—smarter and more willing to stand back from the crowd to see where the opportunities really lie—you can make more money still. Reading Liar’s Poker, you suspect that you’d be one of the smart ones, even if you’ve always been bad at math, chiefly because the dumb ones are such mindless pack animals that you couldn’t possibly be one of them. If you like the idea of being in an office where employees play elaborate pranks on one another, such as taking the suitcase of a colleague about to go away for the weekend, removing its contents and filling it with wet toilet paper—well, you’d be a fool to consider any other career. (The suitcase trick was a particular favorite at Salomon, repeated with variations—pink lace underwear instead of toilet paper—throughout the early Eighties.) Where else could you have such fun while making a fortune?

But Lewis’s books have an appeal that reaches far beyond aspiring bankers. When reviewers talk about his popularity, they usually attribute it to two things: his skill at storytelling and the clarity of his writing. He’s uniquely capable, they say, of finding a compelling narrative in the mess of facts and jargon that clutter an industry, and of tidying up that mess so that a newcomer won’t be put off. He has a genius for simplification, favoring short, declarative statements, quick character sketches, informal language, vivid analogies and the concrete over the abstract. Even so, this is only part of the story. I’m doubtful that readers come away from Lewis’s books knowing as much about his subject as the blurbs and reviews promise. Lewis is good at explaining a complicated world, but he’s better at explaining to his readers—even to his readers for whom that world remains hazy or unappealing—the particular ways in which brilliant men are brilliant, and making that brilliance exciting. You may be uninterested in earning large sums of money. You may be horrified by the idea of working in an office where people are always playing pranks on each other. You’ll still read Liar’s Poker and regret for a moment, when you encounter Alexander, that you didn’t become an investment banker.

Alexander is a trader a couple of years ahead of Lewis. He’s “unique,” Lewis writes, “the closest thing I met to a master of the markets which, I’m now convinced, no man really is.” Alexander takes him under his wing, and the two men—Alexander in New York, Lewis in London—speak several times a day. His advice falls into two categories. First, that when all investors are doing one thing, you should do the opposite. Second—and more intriguingly—that when a major event happens you should look away from the primary site of investor interest and think about secondary and tertiary sites. So, for example, minutes after the Chernobyl disaster, Alexander calls Lewis and tells him to buy potatoes. In an impressively succinct paragraph, Lewis explains:

A cloud of fallout would threaten European food and water supplies, including the potato crop, placing a premium on uncontaminated American substitutes. Perhaps a few folks other than potato farmers think of the price of potatoes in America minutes after the explosion of a nuclear reactor in Russia, but I have never met them.

Liar’s Poker often feels claustrophobic, but at this moment it opens out to reveal the whole world, mysteriously connected in ways only the best trader can understand. There are no crimes in Liar’s Poker, but Alexander is a kind of detective, piecing together a complete picture where others see only disconnected fragments. The cleverness of it eclipses the callousness. It would be cool, I remember thinking, reading Liar’s Poker for the first time, to be able to do that.


Alexander is the prototypical Lewis protagonist: white, male, smart enough to see what no one else can see, brave enough to act on it. He’s Jim Clark in The New New Thing, sensing before everyone else what the next moneymaker will be. He’s Billy Beane in Moneyball, having the courage to turn his back on generations of so-called baseball wisdom and focus on the numbers. He’s the kids in Next, figuring out how the internet can help them get ahead of the professionals. And he’s the hedge-fund managers in The Big Short, able to see that the housing market everyone said would never fail would do just that. If these figures have a fictional counterpart, it’s not Sherman McCoy but Sherlock Holmes. Like Sherlock, they’re often loners. They’re more interested in truth than in social niceties. They share an unparalleled attention to detail. And they combine methodical analysis with flashes of intuition.

In his essay “The Typology of Detective Fiction,” literary critic Tzvetan Todorov divides the detective novel into three categories: the whodunit, the thriller and the suspense novel. The whodunit is the classic detective story. Its essential structure “contains not one but two stories: the story of the crime and the story of the investigation.” Lewis’s books often contain two stories too: the history of the business he’s describing and the career of his hero or heroes. But in most of them, the investigation is Lewis’s: he’s the one who uncovers the history in order to understand his hero’s significance. Liar’s Poker is loosely plotted around a series of vignettes. The New New Thing more closely resembles a picaresque, with Clark rushing from adventure to adventure, making ever more money as he does so. In The Big Short, however, Lewis finally places his detectives within a detective plot: his heroes uncover the story of the subprime-mortgage industry, and the story of this uncovering is as much a part of the book as is the story of the subprime mortgages.

In the classic detective novel, the detective is an amateur: he does what he does without the backing or training of an institution, and part of the thrill is the unconventional, idiosyncratic way in which he solves the crime. The heroes of The Big Short aren’t amateurs but they are outsiders. Michael Burry is a former medical doctor with self-diagnosed Asperger’s Syndrome and a glass eye, who taught himself investment principles before starting a hedge fund named after his favorite fantasy novel. Steve Eisman, who runs a small hedge fund owned by Morgan Stanley, is cynical and angry about Wall Street, embittered by the death of his infant son as well as by his experiences at work. Charlie Ledley and Jamie Mai, both aged 30, set up a private investment fund in a shed in Berkeley with $110,000 of their own money. The outsider status of all these protagonist-detectives, paired with their disregard for the established way of doing things, determines both their actions and our willingness to get behind them.

A second component of the whodunit, according to Todorov, is that nothing much can happen to the investigators in the course of their investigation. You know that Sherlock Holmes and Hercule Poirot will solve the mystery without being threatened, attacked or killed. The suspense novel, by contrast, discards its detectives’ invulnerability while retaining the two-story structure of the whodunit, with the result that the reader “wonders as much about the future as about the past.” The Big Short is more of a suspense novel than a whodunit: we want to know what has happened but also what will happen. The threat to the protagonists isn’t violence or death but, as so often in Lewis’s books, the loss of money: the possibility that their gamble won’t pay off. It does pay off, of course, and the narrative is one of triumph, with the right people proved right. Sure, the government steps in to prop up the banks, and many of the people most directly responsible for the crisis come out of it rich, but you still emerge from reading the book thinking that they’re losers because they were wrong.[1]

By encouraging us to identify with his protagonists, Lewis frees us from the anxiety that we might be implicated in, or affected by, the culture that produced the financial crisis. “One reads [detective novels] with the purpose of remaining as one already is: innocent,” writes literary critic Franco Moretti in “Clues,” an essay in which he argues that the genre emerged in tandem with modern capitalism. “Detective fiction owes its success to the fact that it teaches nothing.” The aim is simply to return to the beginning, to make everything as it was before the crime took place.

There’s one major barrier, however, to our identification with Lewis’s hedge-fund managers, and our vision of them—and ourselves—as innocent: their success depends on millions of Americans losing their homes. Eisman’s anger at the fraudulent behavior of the investment banks and rating agencies alternates with his pleasure as he realizes the inevitability of their deceptions coming to light—and how much he stands to gain from them doing so. Lewis deals with this by borrowing another trick from the classic detective novel, which often takes place in a closed system: a country house, the Orient Express, a small village. In The Big Short, high finance serves as the small village: nothing significant exists outside it. The events are dramatic, but they’re bounded— and the consequences don’t stretch beyond the characters portrayed.

This requires a peculiar blindness to the people Lewis glancingly refers to as “ordinary Americans,” not to mention immigrants to America. They’re in the book—they’re the ones buying the mortgages, after all—but always at a remove. Eisman realizes that lenders are targeting poor immigrants when he discovers that his South American housekeeper is planning to buy a townhouse in Queens with an adjustable-rate mortgage, and that his Jamaican baby nurse owns six houses, the loan company having encouraged her to repeatedly refinance one house in order to buy the next. When Eisman and his team go to an annual subprime conference in Las Vegas, a friend of theirs also in attendance reports that he has met a stripper with five separate home-equity loans. “Two years later, Las Vegas would lead the nation in its rate of home foreclosures,” Lewis notes. But he doesn’t talk to anyone who bought and then lost a house in Las Vegas, or to Eisman’s housekeeper or nanny. The only voices he includes are those in finance, or—occasionally—the wives and mothers of those in finance, when they can provide insight into the psyches of Lewis’s central characters.

With nothing to serve as contrast to the financial services industry, the distinctions between different bankers and hedge-fund managers are intensified. Ledley and Mai, whose entire careers have been devoted to turning money into more money, can be described as “idealistic” and not especially interested in money at all. When Lewis introduces their friend and adviser Ben Hockett, he quotes him describing his move from Tokyo, where he traded derivatives for Deutsche Bank, to California:

When I started [working in finance] I was single and 22 … Now I have a wife and a baby and a dog. I’m sick of the business. I don’t like who I am when I get home from work. I didn’t want my kid to grow up with that as a dad. I thought, I gotta get out of here.

“Getting out of here” turns out to mean getting Deutsche Bank to put him in charge of $100 million of their money, which he trades from his own home in Berkeley. “He could wear whatever he wanted to wear, live wherever he wanted to live, and work wherever he wanted to work—and do it all while remaining employed by Deutsche Bank,” Lewis notes, as if this represents the best possible option for someone sick of the business.

In Lewis’s hands, the financial crisis becomes manageable, almost comforting. We know this isn’t true, of course: our appetite for nonfiction explanations of the crisis is fueled by our awareness of the magnitude of its effects. Perhaps we prefer to focus on the causes because we think we already know the effects: we can see all around us the increase in poverty and homelessness, the slowing of business. But in 2010, when The Big Short was published, it was still possible to fantasize that the damage would remain contained and comprehensible. You could learn about it in the way that you might learn about a historical battle or a presidential campaign. The investigation reaches its conclusion. The underdogs win. It’s over.

In the afterword to the most recent edition of The Big Short, Lewis says that while writing the book, he “bumped up early and often against a new discomfort”:

The material would not allow me to do what I naturally would like to do with it … I was accustomed to writing stories that were, at heart, comic. The story of the investors who made their fortunes from the collapse of the U.S. financial system had lots of funny bits to it, but it was, at heart, a tragedy.

In The Anatomy of Criticism, Northrop Frye notes that the theme of the comic is “the integration of society.” The detective novel is a comedy at heart: evil is identified and removed so that society can continue as it was before. Despite the unyielding material, Lewis’s The Big Short remains a comedy—which is not to say there are no tragic bits to it. These bits do not concern “ordinary Americans.” Instead, we see that the investors who make their fortunes from the collapse of the U.S. financial system do not emerge from the experience especially happy. But the tension between tragic and comic is most apparent in the book’s epilogue, where Lewis intersperses a summary of the aftermath of the crash with a description of a lunch he had with his former Salomon boss, John Gutfreund, late in 2008. Lewis is angry and disappointed by the lack of consequences for those responsible for the crisis, and the lack of changes to the financial system as a whole. “What are the odds that people will make smart decisions about money … if they can get rich making dumb decisions?” he asks. Then, characteristically, he abandons his anger in favor of the pithy anecdote with which the novel closes. Gutfreund offers him a deviled egg, a “gorgeous, frothy confection of an earlier age,” the best thing in the restaurant. Lewis takes one. “Something for nothing,” he writes. “It never loses its charm.”

The film version of The Big Short, however, takes Lewis’s almost-comic telling of the financial crisis and reformulates it as tragedy, paying far more attention to “ordinary Americans” and the wider culture in which finance is embedded. The film splices in montages of Wall Street activity with stills of Ali G, Britney Spears and South Park’s Eric Cartman. We see the Spice Girls and the Facebook “like” icon; we see for sale signs outside houses and signs in supermarkets announcing that they accept food stamps.

In one of the film’s most painful scenes, two members of Eisman’s team, Danny and Porter, go to Florida to survey mortgage owners who are over ninety days delinquent. They find a complex of large houses with swimming pools and backyards, almost all of them empty. When they do eventually find someone living in one of the houses, it’s a burly, sleepy man with a young child clinging to his legs. He’s been paying his rent, he says; he doesn’t know that his landlord hasn’t been paying the mortgage, or that he filled out the mortgage application in the name of his dog. “Seriously man, am I going to have to leave?” he asks. “’Cause my kid just got settled in school.” Danny scratches his neck, frowning, uncomfortable. “You should talk to your landlord about that,” he says, backing away. The consequences of him being right become real, to him and to us.


Reflecting his sensitivity to public mood and interests, Lewis has taken a different approach to finance in his two most recent books from the one he took in The Big Short. In September 2011, the same month that Occupy Wall Street began, he published Boomerang, a collection of articles he originally wrote for Vanity Fair about the financial crisis in a handful of European countries: Iceland, Greece, Ireland, Germany. There are no banker-heroes in these articles, but his role as bemused American means that Lewis treats each country’s predicament with good-humored incredulity: Can you believe the mess these foreigners have got themselves into? As usual Lewis mainly talks to bankers, heads of state and economics professors, but to add local color he throws in a few encounters with ordinary people. In Iceland, for example, he listens to a couple having sex in the hotel bedroom next to him, baffled to hear them making noises he finds “totally incomprehensible.” (They’re speaking Icelandic.)

Boomerang is tremendous fun to read. Yet it makes the social consequences of the financial crisis far more visible than they had been in The Big Short. And in the final chapter, when Lewis goes to California and investigates the financial and legislative difficulties that Arnold Schwarzenegger faced in his time as state governor, he drops his amazed tourist routine. Talking to a long-time resident of Vallejo, a city on the brink of bankruptcy, he realizes he’s hearing a story he’s heard before:

It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans. … [Americans had] been conditioned to grab as much as they could, without thinking about the long-term consequences. Afterward, the people on Wall Street would privately bemoan the low morals of the American people who walked away from their subprime loans, and the American people would express outrage at the Wall Street people who paid themselves a fortune to design the bad loans.

In these few lines, Lewis says what it was still possible to keep below the surface when he wrote The Big Short.

Lewis abandoned this kind of social commentary almost immediately. In his most recent book, Flash Boys (2014), he returned to Wall Street, and to the detective plot structure of The Big Short. The book is an expose of high-frequency trading (HFT) and the existence of “dark pools” in which trades take place away from public exchanges, unbeknownst to investors. Its detective-hero is Brad Katsuyama, “golden child” of the Royal Bank of Canada, whose colleagues assume he will one day run the bank, and who embarks upon an investigation into why the market is no longer functioning as it used to.

Ordinary Americans suffer from HFT, since among the investors whose trades are front-run by high-frequency traders are mutual funds, pension funds and university endowments. Lewis has spoken in interviews of his anger at this, but it isn’t a point he stresses in the book itself. Nevertheless, the tone of Flash Boys is often angry. So many of Lewis’s books are motivated by a belief in meritocracy: the best businessman will find a way to succeed spectacularly. But HFT rigs the system, transforming the market from a supposedly level playing field to a place where only those with enough money to access superior technology can win. Flash Boys is Lewis’s confrontation with the possibility that his faith in the meritocracy of business has been misguided. The despondency that this confrontation provokes in him alternates with his excitement as Katsuyama and his team uncover the existence of HFT, realize its unfairness and set out to fix it.

To fix it: this is the crucial distinction between Katsuyama and the protagonists of The Big Short, at least in Lewis’s version of events. Where Eisman, Burry, Ledley and Mai determined to make as much money as they could from their discovery, Katsuyama and his team want to make the system fairer, even if this means they make less money than if they had kept quiet and played along.

As the public’s sense of what a banker-hero might look like has changed, so has Lewis’s choice of hero: as brilliant as Eisman and co. but focused on justice rather than greed, Katsuyama is the kind of banker we can get behind in the mid-2010s. Having found a mystery in the weeds of Wall Street algorithms, Lewis can continue writing about finance in the way he always has: as a closed world full of adventure and scandal, and free from messy social consequences. But if Lewis struggled in The Big Short to reconcile the events of his story with his instinct for comedy, in Flash Boys his trusted model of making the complexities of finance simple and entertaining while avoiding its effects on the wider world—the world of his readers—is pushed almost to breaking point. Once more, Lewis asks us to identify with his brilliant protagonists, without questioning what it means to focus so narrowly on brilliance and success.

In June 2016, Lewis announced he had finished a new book, due out at the end of this year. Titled The Undoing Project, the book is about the research of two psychologists, Daniel Kahneman and Amos Tversky. Kahneman and Tversky’s work focuses on judgment and intuition; Kahneman, whom Lewis profiled in Vanity Fair in 2011, has won a Nobel Prize in economics, but for behavioral rather than classical economics. Perhaps Lewis’s move away from high finance suggests that he thinks his readers’ interest in the subject is exhausted, or perhaps it augurs the culmination of a development increasingly apparent in his last three books: the topic no longer lends itself to the kind of story he wants to tell. Lewis’s career has charted a shift in the general reading public’s perception of high finance; what once was an acceptable subject for comedy now requires a far darker narrative. Perhaps we’re ready for new stories about the financial crisis, stories that don’t take their inspiration from a genre that teaches us nothing and culminates with the restoration of the status quo. These new stories might not be very funny at all.

Art credit: Lawrence Mesich

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This essay appears in issue 12 of The Point.
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    Footnotes    (↵ returns to text)
  1. The protagonists of The Big Short are the good guys primarily because they’re opposed to the bad guys. The greed, arrogance, carelessness and stupidity of the subprime-mortgage lenders; the investment bankers who buy the loans, parcel them into bonds and sell them on; and the agencies who don’t bother to check the bonds before rating them are so bewildering, so clearly deplorable, that anyone who’s betting against them is automatically appealing.
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