by Jeff Johns

Created on: April 21, 2010   Last Updated: April 22, 2010

Michael Lewis- The Big Short- Inside The Doomsday Machine (W. W. Norton - $27.95)

When our current financial meltdown was in it's earliest stages, I distinctly remember asking the listeners of my radio show the question “what are these companies, (that have lost a huge portion of their value) doing differently today from what they were doing yesterday?” The products and services they were providing are still the same, so why has the value of their company dropped so dramatically?

The question was based upon the simplistic theory that the value of a company was based on the demand for the products or services they provided. The reality is that often times that value was manipulated by financial institutions who created a series of complex financial instruments for the purpose of having investors place bets, not on those products and services, but the fluctuations in the values of those companies.

Author Michael Lewis takes readers inside the inner workings of how those financial institutions operate in his latest book The Big Short (W. W. Norton) which focuses on the sub-prime mortgage debacle that is front and center as the root cause of our current financial meltdown.

The Big Short paints a dubious portrait of the “brain” trust of Wall Street investment bankers and bond traders. Literary takes on these modern day tycoons often portray these financial titans as swashbuckling, work-hard, play-hard types, swathed in $5000 suits and expensive silk ties and packing best and brightest, Ivy League credentials.

The reality Lewis describes is loaded guys who don't qualify as the sharpest tool in the shed, who sport a track record of past failures on a grand scale, that move on to the next rung on the ladder and are rewarded with new levels of power and even larger piles of cash to plunder.

The Big Short is an at times confusing road map, think Mapquest on crack, that runs through the multiple layers of investment banks, bond houses, hedge funds and insurance companies, where billions of dollars are gambled and where all-to-often the house gets bailed out by the taxpayer.

Lewis is a master storyteller, with the ability to both entertain and outrage. As he walks you through the story of how the sub-prime house of cards was being constructed and how financial operators developed the so-called investment “derivatives” which boil down to nothing more than the investment equivalent of placing bets, you'll be left scratching your head wondering

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