Inside The Doomsday Machine By Michael Lewis Analysis

America’s biggest gambling epicenter isn’t Las Vegas, it’s in New York City, right on Wall Street. In what other situation can you walk away from a losing hand and still make tens of millions of dollars? This very thing happened in 2008 and very few people were able to see it coming despite being the cause of it. In Michael Lewis’ book, The Big Short: Inside the Doomsday Machine, he tells the story of several men who were able to predict the fall of the stock market many years before it happened and no one would listen to them. Michael Lewis does very well in explaining the events leading up to the economic downfall in 2008. He makes it easy for those who are unfamiliar with the terminology of Wall Street to be able to understand what is going on. Even though, many terms are nearly impossible to grasp.
Michael Lewis is an American author who is well known for his books which are nonfiction and …show more content…
Banks lied about how reliable the mortgages they were giving out were while the rating agencies lied about the ratings that they should receive, simply so the banks wouldn’t go to their competition. Burry, Eisman, Lippmann, and Hockett all knew what would eventually unfold but were laughed at when they told others or wanted to bet against the success of the mortgage bonds. Lewis does a great job in showing the warning signs that the four men acknowledged, but no one else could see. These signs included: increase in interest rate in coming years on the mortgage loans the banks had leant, the poor rating system that was implemented for rating these mortgages, the unrealistic loans that were being given out, and the creation of synthetic collateralized debt obligation, or CDOs. Another successful thing Lewis does in this book is how simple he makes it to understand what