CloudKnow

Michael Lewis’s fascinating page-turner, The Big Short: Inside the Doomsday Machine takes us through the Subprime mortgage market through the eyes of the cast of characters who not only saw the coming crisis but bet heavily on the catastrophe, and won big.

What’s interesting about the cast of characters is their contrarian view on the financial crisis, events that shaped their worldview, and holding on and increasing their bets while under tremendous pressure, in some cases, from their own investors.

Lewis focuses largely on four groups, and among them mostly on Steve Eisman, Dr. Michael Burry, Greg Lippmann and Charlie Ledley:
• Frontline Partners (Steve Eisman, Vincent Daniel, Danny Moses, Porter Collins), Ivy Zelman and Wing Chau
• Scion Capital (Michael Burry, Steve Druskin), Joel Greenblatt and Kip Oberting
• Formerly of Deutsche Bank (Greg Lippmann & Eugene Xu)
• Cornwall Capital (Charlie Ledley, Ben Hockett, Jamie Mai) and David Burt

The book starts with Eisman, moves on to Burry, Lippmann, Ledley and how they go about learning more about the Subprime market, various interactions with Wall St. Banks, AIG, how the protagonists put together the pieces of the puzzle, and finally culminates with Howie Huber losing billions and the financial crisis of 2008.

If you liked this post, you might like Daily Links #171 (Michael Burry edition).

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