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  • Essay / The Big Short by Michael Lewis - 1087

    The Big Short by Michael Lewis tells the story of the 2008 financial crisis from the perspective of a few idiosyncratic characters who saw it coming. Unlike large financial institutions who underestimated the risk of making more and more subprime mortgages to insolvent customers, Lewis's characters assessed this risk accurately and anticipated the eventual bursting of the housing bubble. Not only did they foresee the inevitable, but they also made a fortune betting on it happening. Had they conformed to the public sentiment of extreme optimism and confidence in the stability of the housing market, they would not have reaped immense monetary rewards. Between the lines of The Big Short lies, albeit not too secretly, a message about the benefits of nonconformity. Although conformity is often socially encouraged and applauded, sometimes it is important to ask ourselves whether going against the grain would be more beneficial to us or our community. In Michael Lewis's account, challenging the status quo due to skepticism about financial markets reaped large profits, while conforming to widespread denial of the unpredictability of the housing market resulted in massive losses. Among the big skeptics of The Big Short are two thirty-somethings. -years-old who founded a small financial management company and named it Cornwall Capital Management. Charlie Ledley and Jamie Mai, later joined by Ben Hockett, ventured into running a lucrative business out of the garage of a house in Berkeley, California, with just over a hundred thousand dollars in their bank account and absolutely no experience in terms of investment. Rather than knowledge and expertise, young financiers were equipped with the belief that "the best way to...... middle of paper...... for all of us: if there is no Had it not been for Copernicus and later Galileo, we would still be under the impression that the Earth, not the Sun, is at the center of the universe. The monetary profits made during the 2008 financial crisis by a small circle of people also seemed to justify the challenges. Ironically, however, the circle included both conformists and nonconformists. Outside the circle were the exasperated middle- and lower-class Americans who have suffered the most and will continue to do so until maverick politicians push for much-needed financial reforms. Works Cited Lewis, Michael. The great short film: inside the apocalyptic machine. New York: WW Norton & Company, 2010. Print. Lewis, Michael. Interview with Charlie Rose. March 16, 2010. the web. March 7, 2014.McLeod, Saul. “Asch experiment.” Simply Psychology, 2008. Web. March 7 2014.