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Essay on Michael Lewis's The Big Short

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Michael Lewis’s The Big Short tells the tale of the 2008 financial crisis from the perspective of a few idiosyncratic characters that saw it coming. Unlike big financial institutions that underestimated the risk of increasingly extending subprime mortgage loans to uncreditworthy customers, Lewis’ characters gauged such risk accurately and anticipated the eventual burst of the housing bubble. Not only did they foresee the inevitable, but they also made a fortune by betting on its happening. Had they conformed to the public sentiment of extreme optimism and confidence in the stability of the real estate market, they would not have reaped immense monetary rewards. Between the lines of The Big Short, there lurks, albeit not too covertly, a message about the benefits of nonconformity. While conformity is often times socially encouraged and applauded, it is important to wonder at times whether going against the flow would be of greater benefit to us or our community. In Michael Lewis’s narrative, defiance of the status quo as a result of skepticism toward financial markets has yielded big payoff, whereas conformity to the widespread denial of the housing market’s unpredictability has incurred massive losses.
Among the big skeptics in The Big Short are two thirty-year-old men who founded a small money management firm and named it Cornwall Capital Management. Charlie Ledley and Jamie Mai, later joined by Ben Hockett, ventured into running a money making business out of a house garage in Berkeley, California, with just a little over a hundred thousand dollars in their bank account and absolutely no experience in investments. Rather than knowledge and expertise, the young financiers were equipped with the conviction that “the best way to m...


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...o us all: If it wasn’t 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 earned during the 2008 financial crisis by a small circle of people seemed to be well worth the challenges as well. Ironically, though, the circle included both the conformists and the contrarians. Outside the circle stood exasperatedly middle- and lower-middle-class Americans who suffered the most and will continue to until nonconformist politicians press for the implementation of much needed financial reforms.



Works Cited

Lewis, Michael. The Big Short: Inside the Doomsday Machine. New York: W.W. Norton &
Company, 2010. Print.
Lewis, Michael. Interview with Charlie Rose. 16 March 2010. Web. 7 March 2014.
McLeod, Saul. “Asch Experiment.” Simply psychology, 2008. Web. 7 March 2014.



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