Retrospective rubbernecking at the subprime mortgage disaster
As I mentioned once before, I have a block on â€˜formalâ€™ book reviews, so consider this just a friendly little chat, okay?
I trust Stacyâ€™s opinions implicitly, particularly on matters of journalism, so when in passing she praised Michael Lewisâ€™ The Big Short, the very next thing I did was hit the library web site to reserve a copy.
However, even with her endorsement I was so put off by the summary blurb that I almost abandoned it right there. â€œ… Tells the story of some of these short-sellers, exposing many of the systemic flaws in the financial markets along the way.â€ Um, yawn? The first user review on the library site gave five stars but somehow managed to sound dry as dust. Maybe there just isnâ€™t a way to make â€˜sub-prime residential mortgage crisisâ€™ sound compelling in three sentences, I donâ€™t know.
Before giving up entirely, however, I ran a general web search and turned up an excerpt published in Vanity Fair last year. You should read it, and if you find it as fascinating as I did, youâ€™re a good candidate for the rest of the book. This piece showcases the most pleasant surprise for me: the authorâ€™s attention to characterization.
He sensed that he was different from other people before he understood why. Before he was two years old he was diagnosed with a rare form of cancer, and the operation to remove the tumor had cost him his left eye. A boy with one eye sees the world differently from everyone else, but it didnâ€™t take long for Mike Burry to see his literal distinction in more figurative terms. Grown-ups were forever insisting that he should look other people in the eye, especially when he was talking to them. â€œIt took all my energy to look someone in the eye,â€ he said. â€œIf I am looking at you, thatâ€™s the one time I know I wonâ€™t be listening to you.â€ His left eye didnâ€™t line up with whomever he was trying to talk to; when he was in social situations, trying to make chitchat, the person to whom he was speaking would steadily drift left. â€œI donâ€™t really know how to stop it,â€ he said, â€œso people just keep moving left until theyâ€™re standing way to my left, and Iâ€™m trying not to turn my head anymore. I end up facing right and looking left with my good eye, through my nose.â€
His glass eye, he assumed, was the reason that face-to-face interaction with other people almost always ended badly for him. He found it maddeningly difficult to read peopleâ€™s nonverbal signals, and their verbal signals he often took more literally than they meant them. When trying his best, he was often at his worst. â€œMy compliments tended not to come out right,â€ he said. â€œI learned early that if you compliment somebody itâ€™ll come out wrong. For your size, you look good. Thatâ€™s a really nice dress: it looks homemade.â€ The glass eye became his private explanation for why he hadnâ€™t really fit in with groups. The eye oozed and wept and required constant attention. It wasnâ€™t the sort of thing other kids ever allowed him to be unself-conscious about. They called him cross-eyed, even though he wasnâ€™t. Every year they begged him to pop his eye out of its socketâ€”but when he complied, it became infected and disgusting and a cause of further ostracism.from â€œBetting on the Blind Sideâ€, Vanity Fair April 2010
Michael Lewis is … well, heâ€™s just an extremely good writer, for one, but heâ€™s also got to be one hell of a meticulous researcher. Heâ€™s gone back and pieced together a detailed timeline, cross-referencing with dozens of interviews and using the email archives of his chief subjects.
This resulted, for me, in a sort of retrospective rubbernecking. As he stepped through the relevant events of 2005 through 2007, I found myself remembering where I was and what I was doing at those times … and how little I knew about events already in play that would completely transform my life in 2008 and beyond.
For example, in October 2006 Jak and I decided to buy a house — a path that was doomed before weâ€™d even conceived of it, because of some esoteric choices made by people Iâ€™d never met, working at companies Iâ€™d never had contact with. That kind of blows my mind. I long ago accepted that many things about my own life are beyond my control, but I honestly have never felt quite so helplessly (if retroactively) ignorant. (The fact that only maybe a couple of dozen people in the entire world were less ignorant than I was should diminish the sting more than it does.)
The flip side is that I feel a lot more informed now, after reading The Big Short. Lewis does an excellent job of taking obscure concepts like â€˜collateralized debt obligationâ€™ and â€˜credit default swapâ€™ and breaking them down into comprehensible English.
Also, if youâ€™re having any doubts about where most of the fault for our continuing economic collapse lies, this might make things a bit more clear. Though Iâ€™ve seen people argue about whether the individual actions taken by the banks, insurance companies, and ratings agencies were based in amoral greed or egregious stupidity — Lewis tends to come down on the side of â€˜a little greed, but mostly stupidityâ€™ — Iâ€™m not sure it matters. Personally, Iâ€™d tend to hold them responsible either way.