Tag Archives: Michael Lewis

The Big Short, Michael Lewis

WW Norton, 2010, 320 pages, 36.95$C hc, ISBN 978-0393-07223-5

At the height of the 2008 financial crisis, the old saw “if you’re not outraged, you’re not paying attention” came back as a preface to nearly any explanation of the situation. A systematic accumulation of greed had created a ludicrous situation that was destined to fail and when it went, even the so-called smart guys of Wall Street seemed oblivious to the problem facing them. When Bear Sterns and Lehman Brothers disappeared, the cause of their problem seems obvious enough—financial speculation based on risky loans. But why did that problem become such a problem? Didn’t anyone see it coming?

As it turned out, plenty of people saw it coming. Many people involved in real estate in the mid-2000s realized that there was an unsustainable bubble going on, fuelled by ridiculously generous mortgages given to people who couldn’t possibly repay them. A much smaller number of people, however, actively bet on the collapse of those mortgages and associated speculative instruments, and it’s their story that Michael Lewis tackles in The Big Short.

The book revolves around four characters—and “characters” is the right word to describe people such as Michael Burry, a mildly autistic medical doctor turned investment managers who pieced together the coming crisis from his own painstaking research. Or Greg Lippmann, who heard about the crisis and became determined to make a profit from it. Or Steve Eisman, a morally righteous crusader who saw in the coming collapse of the housing market both a vindication of his own cynical views and the ghastly realization that he was still an idealist at heart. Or Charlie Geller, a boutique investor specializing in speculative pessimism, who made even-crazier bets against the fundamental values of the American economy. (Notably absent are any extended mentions of the rather most famous John Paulson, most likely in the interest of allowing four lesser-known stories to be told.)

As a lens through which to see the 2008 financial crisis, adopting the viewpoint of those who actually benefited from the events, The Big Short takes an ironic stance toward the usual triumphalism of business stories. Sure, our heroes made money … but at the expense of whom? As they themselves agonize over their gains, the book ends on an unusually glum note. (Although one character’s interest in drinking water portends far worse to come.)

Most readers will now come to the book from the movie adaptation, and so it’s noteworthy to point out that much of the book is, indeed, quite faithful to the details of the book. That “zero!” hand gesture at a Las Vegas conference, followed by “a call from my wife”? It happened. That stripper with five houses? It happened (in Vegas rather than Florida, but still). While the film does a magnificent job at adapting the specifics of the book into a cinematic narrative, adding extra layers of visual irony along the way, it remains surprisingly faithful to its material, which is remarkable given the complexity and seriousness of the topic and Hollywood’s tendency to dumb down as many things as it can. Strong source material can be lauded for inspiring strong adaptations, and that’s what we have here.

The Big Short is, in other words, a really good book. It’s infuriating, enlightening, funny and gripping at once. The ironic tone is almost the only sane response to an insane situation … and it back up a powerful message that greed is powerful enough that it snares the smart and the dumb alike. No greater ingenuity exists than what is required to convince ourselves of our righteousness.

The Big Short (2015)

(Video on Demand, April 2016) Hollywood is known for dumbing down everything, but the positive spin on dumbing-down is “vulgarize”, and The Big Short does it exceptionally well. Explaining the financial crisis of 2007–2008 through the perspective of traders who bet on the collapse of the US housing bubble before everyone else, this is a film that sets out to explain an exceptionally complicated topic to broad audiences, using every means at its disposal. Other than a clever script that creates dramatic tension out of real events, this includes frequent asides to the camera, sardonic narration and nakedly didactic celebrity appearances. (“And now to explain mortgage bonds, here’s Margot Robbie in a bubble bath.”) The result is nothing short of astonishing: The Big Short lays out its explanations clearly, entertainingly and doesn’t make many mistakes along the way. Even readers of Michael Lewis’s original book will be impressed at the amount of detail that writer/director Adam McKay manages to include in slightly more than two hours. For McKay, The Big Short is an impressive step forward that builds upon his work on The Other Guys’ end credits sequence to deliver a film that is outrageous and infuriating in the best sense of the words, while remaining a far funnier film than either Anchorman movies. (The helps that the film has a sly sense of stealth humour, from playing “Crazy” in the background of an insane explanation, showing how regulators jump in bed with banks, or how an assessor wears blindness-inducing glasses—removing them just in time to deliver some harsh truths.) This being said, the laughs in The Big Short aren’t from jokes as much as they’re from sheer bewilderment, that so-called smart people would be so astonishingly stupid. Or short-sighted, or greedy: As befits a complex catastrophe, the motivations in The Big Short are as complicated as synthetic CDOs. Even the protagonists aren’t too sure what to feel when they win by betting against logic, tradition and the respectability of the American economy. Steve Carrell (as the outraged moral centre of the film) and Christian Bale both impress in roles that deviate a bit from their screen persona (to the extent that Bale has a screen persona, that is), with able supporting performances by Ryan Gosling and a barely recognizable Brad Pitt. It’s not a stretch to claim The Big Short as a public service—the limpid way it manages to explain the madness of an entire system is populist rage fit to justify mass entertainment as the modern jester. While not every trick it attempts works (McKay’s direction seems too deliberately off at times), it’s a fine, even impressive piece of cinema, as much for its ambitions than for how it achieves them. It makes a more than fitting companion to films such as Margin Call and Inside Job.

The Blind Side (2009)

(On TV, March 2012) Some movies just rub me the wrong way, not matter how skillfully they’re made and how upbeat they can be.  Seen from far away on paper, The Blind Side is pure movie-of-the-week stuff: A desperately poor and lonely teenager is rescued by the unbelievable kindness of strangers and goes on to earn some success in sports.  But then you pile up the extras, increasingly the misery of the protagonist, making sure the rescuing strangers are kinder than virtue itself, ensuring that the sport is all-American football and topping it off with “this is based on a true story”.  The film itself is well-made: Sandra Bullock plays her age well as a charming southern belle who decides to rescue the disadvantaged teenager; dialogues are occasionally very funny; technical credentials are just fine and the film ends on a note of unabashed optimism.  The Blind Side earned accolades all the way up to an Oscar nomination, made tons of money and it’s almost disgusting to criticize a real-life true story like this one.  And yet… it’s not that difficult to be troubled by the portrait of a rich white family rescuing a traumatized black child.  There’s an element of unctuous Caucasian paternalism there that overshadows the rest of the film’s virtues, and being the whitest guy I know doesn’t change the cringe-inducing way the film portrays the issue. (Compare and contrast with Precious.) I’m just as uneasy about the way The Blind Side seems to be courting mainstream audience approval with its repeated devotion to religion, football, family and other traditional values.  It certainly doesn’t help that the film seems adapted from a very small portion of Michael Lewis’ far more cerebral eponymous book, and that its structure seem built on a series of short dramatic loops, suddenly introduced and quickly resolved.  Every character seems nice, every passing difference can be overcome after a conversation or two and the film seems unwilling to tackle any serious issue along the way.  It works, but it seems so deliberately paternalistic that I can’t buy into it.

Moneyball (2011)

(In theaters, October 2011) Something isn’t quite right with this Moneyball, but it took me a reading through the original book to finally understand why.  As a sports drama in which underdogs defeat their opponents through cleverness and unorthodox thinking, it does manage to boil down a complex and dry subject into a narrative that most people (including those without much baseball knowledge) will be able to follow and enjoy.  Brad Pitt is surprisingly good as the Oakland Athletics’s general manager Billy Beane trying to make the most out of the small budget he’s given –hiring oddball players and constantly running the numbers game is one way that the story plays out in the good old underdog sports drama narrative.  But sometimes, it does too neat a job: While Michael Lewis’ book makes it clear that the sabermetrisation of pro baseball was (and continues to be) a lengthy process in which the 2002 season was just another step, the film condenses decades of thinking into a single year, and heavily dramatizes the events in such a way that they lose their intended meaning.  Sabermetrics is about squeezing a few percentage points here and there, enough so that statistically, you end up with better results at the end of the year.  So what’s Moneyball’s most triumphant sequence?  The complete statistical anomaly of winning twenty games in a row (and that last one on a heroic shot), something that actually undermines the argument made by the picture.  Once that twentieth game is won, the film has nowhere to go: while the team makes it to the finals, they lose their season.  Other teams would take ideas similar to Beane’s and run with them.  The elements that make Lewis’ Moneyball an interesting book aren’t necessarily those that make for a sports drama and the film occasionally suffers from the contradiction.  Still, it’s churlish to criticise the film for fairly esoteric reasons: On most aspects, Moneyball is a solid sports drama with enough comic relief to make it work, and it’s hard to overestimate the work that has gone in transforming the non-fiction original book into something that feels like a classic baseball movie.  The container, however, may be part of the problem.

Moneyball, Michael Lewis

Norton, 2011 movie tie-in expanded reprint of 2003 original, 317 pages, C$18.50 pb, ISBN 978-0-393-33839-3

Sport meets science in Michael Lewis’ Moneyball, a fascinating case study of the way fact-based analysis is slowly replacing traditional instinct as a guide to a baseball team’s performance.  Written after Lewis was allowed behind-the-scene access to the Oakland Athletics’ 2002 season, Moneyball explains how the desire to improve performance on a limited budget, coupled with the willingness to adopt new analytical methods collectively known as “sabermetrics”, allowed a small team like Oakland to compete successfully with team with far bigger budgets.

The keyword here is “money”: Lewis, after making a splash with Liar’s Poker and The Big Short, is best-known as a financial writer and this focus is never too far away from his topic matter as he explains the difficult situation of a poor baseball team in a league where other teams can easily outspend them.  Coupled with a renewed interest in number-based analytical methods, these constraints allowed Oakland general Manager Billy Beane to retool the usual scouting process.  Never mind studying players in the minor-leagues fields and filing reports based on scouts’ gut instinct: Beane’s analytical team would rather pore over seasons’ worth of numbers in order to find not necessarily the best players, but the ones that are undervalued by the market.  You can’t buy who you want when other teams have deep pockets, but you can get great bargains by targeting players who aren’t being paid what they’re worth.  Sabermetrics isn’t about having a huge advantage; it’s about working the margins until you can extract a few reliable percentage points’ worth of advantage, which ends up making a difference over the long run.

Lewis blends this story (as exemplified by the 2002 Oakland season) with that of Bean, a talented baseball player who somehow never met the considerable expectations placed on him by major-league teams.  Beane, after a few mildly successful years in the major league, did what practically no one else did and decided to take up the management of a baseball team, re-starting from the ground up.  This sensibility led him to champion analytical methods developed from the mid-seventies by statistical nerds over the advice of seasoned scouts.

In Moneyball, these innovations work: By being the first to pioneer the principles of sabermetrics, the Athletics get first-mover advantage, seeing easy bargains where other teams aren’t even looking.  It’s a temporary advantage as other teams, such a Toronto and Boston, eventually adopt similar techniques… but for a while, it works to the Athletics’ advantage.  (Hilariously, the centerpiece of the 2002 Athletics season is an unprecedented 20-game winning streak, a freak succession of victories that has almost nothing to do with the percentage points earned by sabermetrics.  Lewis explains this in the book, but the movie adaptation misses the point by using it as the film’s climax.)

Thanks to Lewis’ vulgarization talents, Moneyball will find an audience far beyond numbers-minded baseball fans.  The book is a joy to read, and even casual baseball observers will find plenty of good material to chew upon.  (There are exceptions: a chapter on trading is so deeply steeped in traditional baseball jargon that casual readers will find it nearly impenetrable.)  It’s a story about how cleverness can defeat brawn, or how facts can check instinct and as such is likely to appeal to science-minded readers.

This “revenge of the nerds” plotline is more fully explained in the paperback version’s afterword, which describes the controversy with which the book was received by traditional old-school baseball managers and fans.  To hear Lewis tell it, the sabermetrics principles were threatening because they upset an entrenched scouting system largely made up of ex-players seeking to uphold their own tradition: Having back-room math analysts tell them that they were making bad decisions wasn’t the kind of news warmly received.  And it may serve to explain why, even almost ten years later, the Athletics are still doing well in implementing sabermetrics: not every team administration may yet be willing to understand how letting go of traditional methods can improve their results.

In short, it’s a story very similar to the kind of competitiveness that has taken over Wall Street, with trained scientists and engineers seeking minute percentage advantages over their rivals.  Blending the two American passions of baseball and money in one easy-to-read package, there’s a good case to be made for Moneyball as a quintessential American non-fiction book.