Michael Lewis is annoying. He doesn't always write about finance, but when he does, the words are so good everyone else may as well pack up.
He quit Wall Street in the Eighties to write Liar's Poker, probably still the definitive account of arguably the craziest two square miles on the planet.
Back then, Lewis could not understand why a bank was willing to pay him hundreds of thousands of dollars a year to give investment advice when he clearly knew nothing about anything, and figured the whole industry was about to implode. It turns out he was two decades ahead of himself.
His latest page-turner, The Big Short — Inside The Doomsday Machine, returns to his old ground.
Lewis follows a bunch of apparent losers who are convinced the US housing market is about to go pop, taking Wall Street and perhaps everything else with it down the tubes. Michael Burry is a one-eyed doctor with Asperger's syndrome. Steve Eisman has the tact of a rhino and likes to shout at Wall Street's finest: "You're wrong! Your data is wrong!" Eugene Xu is the second-best mathematician in China but unfortunately speaks no English. No one likes them and no one listens to them, until it is too late. Lewis's point, again, is that bank chief executives don't understand their own companies.
It is simply not possible to keep track of every trade and every whizzy financial instrument dreamed up by traders with zero conscience. They can see what is making money, but working out what may be about to lose is harder.
The Wall Street pecking order is described thus: "Goldman Sachs was the big kid who ran the games in this neighborhood. Merrill Lynch was the little fat kid assigned the least pleasant roles, just happy to be part of things... whenever there is a calamity, Merrill is there." Sounds about right.
The Big Short — Inside The Doomsday Machine, by Michael Lewis, out now from Penguin Books, £14.99.
