Sunday, June 3, 2012

52 Books in 52 Weeks: Books 21 & 22 - Liar's Poker and The Big Short

Liar’s Poker and The Big Short by Michael Lewis

If you want to restore your faith in America’s financial future, feel good about the people in power at the country’s biggest investment banks, and face today’s fiscal nightmare with the confidence that the system is inherently good and will surely repair itself, I suggest you avoid these two books like the plague.

Liar’s Poker gives an insider’s account of the no-rules chicanery that took place on the trading floor of Salomon Brothers and other major players in the ‘80s, which eventually led to the stock market crash of 1987. Then, just when you think the power brokers have surely learned their lesson and mended their ways, here comes The Big Short, describing how these same frat boys rose up from the flames like so many phoenixes and proceeded to concoct an even more mind-boggling get-rich scheme. The result of that one: the stock market crash of 2008. The one we’re still reeling from.

They say that those who do not learn from history are doomed to repeat it. But the postscript for these guys is that they managed to get wealthier regardless. And not just a little wealthier. Incredibly, inconceivably wealthier.

Michael Lewis is a great storyteller, and even though I didn’t understand a lot of the financial goings-on that he described (and frighteningly, neither did an awful lot of CEOs), both books were thoroughly readable and – dare I say – enjoyable. 

The takeaway: Grandpa was right. Under the mattress is a safe place for money.

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