Study Guide

The Big Short: Inside the Doomsday Machine Perseverance

By Michael Lewis


The small world of investors who made big bets against subprime mortgage bonds itself contained an even smaller world: people for whom the trade became an obsession. (5.3)

There were literally fewer than twenty people in the entire world who bet against the subprime market. That's nuts. However, as this passage notes, and as we'll see over the course of the section, this isn't just some run-of-the-mill trade for these folks—it's a personal mission, even a crusade. That comes with its own set of benefits and drawbacks.

"Sometimes his ideas cannot be manifested in a trade," said Vinny. "This time they could." (7.14)

Vinny is talking about Steve Eisman here. For Eisman, betting against the subprime market is a way of expressing his disdain for Wall Street. That disdain is what explains his determination.

This was Moody's. The aristocrats of the rating business [...] And its CEO was being told he was either a fool or a crook, by Vincent Daniel, from Queens. (7.21)

Like their boss, the bros at FrontPoint Partners refuse to defer to the authority of so-called "experienced" men. After all, those "experienced" men have really screwed the pooch with the subprime market, causing untold damage to their own companies (and to the economy as a whole) while being none the wiser.

"Jeff is still giving his prepared remarks and Steve just blurts out, 'Well, your models are wrong!' This very awkward silence comes over the room." (7.25)

You might think that Eisman is being a little rude (and you wouldn't be wrong), but here's the thing—the subprime crisis might not have happened if more people were willing to speak their minds as he did. Sitting down and shutting up doesn't really seem like the best course of action here.

"I have always believed that a single talented analyst, working very hard, can cover an amazing amount of investment landscape, and this belief remains unchallenged in my mind." (8.45)

Here is Burry's guiding principle throughout The Big Short. He has an almost religious sense of individualism, one that stays strong even when assaulted from all sides by a bunch of angry investors second-guessing him and looking to withdraw their funds. Some people might call this madness, but hey—dude can't be cray when he's right…right?

"Being short in 2007 and making money from it was fun, because we were short bad guys. [...] In 2008 it was the entire financial system that was at risk." (10.1)

Although Eisman is determined to make himself a tidy fortune, he doesn't share Wall Street's belief in attaining profit at any cost. He has his limits. In this situation, he becomes greatly concerned with how the subprime collapse will affect the countless working class Americans who are already struggling.

He was emotional [...] His bets against subprime mortgage bonds were to him more than just bets; he intended them almost as insults. (10.3)

One the on hand, it's great that Eisman is determined to see his crusade against the subprime market through to the bitter end. On the other, he's clearly way too emotionally attached to the situation to analyze it in an objective way. This causes some major trip-ups for Eisman at times.

"It was more than an argument," Eisman said. "It was a moral crusade. The world was upside down." (10.3)

Eisman's bet against the subprime market grows into an obsession, which is either awesome or asinine depending on your perspective. Either way you land, Eisman's strong moral compass is his guide throughout the book.

It outraged him that the people who got credit for higher understanding were those who spent the most time currying favor with the media. (10.60)

Michael Burry has a laser focus on his work, but he has no patience for the PR end of running a company. And it's not even that he's bored by it—he despises it. In his mind, thinking about others' perceptions of you takes your focus away from making money for your investors.

"I felt bad about it," said Eisman. "It was obnoxious. He was a lovely guy. He was just wrong. I was no longer the underdog. And I had to conduct myself in a different way." (10.66)

By the end of the book, Eisman has taken a step back from his persnickety ways. We bet you still don't want to be on the other end of an argument with him, but we don't think he'll be tracing any more "zeroes" in the air. At least we hope not. If you're reading this, Eisman, then just remember: WWSMD. What Would Spider-Man Do?

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