Nonfiction: "The Big Short: Inside the Doomsday Machine," by Michael Lewis.

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Author Michael Lewis succeeded in such books as "Moneyball" and "The Blind Side" through lively interviews with people we never heard of, but who were up to their necks in the story, be it Billy Bean of the Oakland Athletics or football player Michael Oher.

Since Topic One these days is the economy, Mr. Lewis has seized the opportunity to return to the scene of the crime -- Wall Street, where he worked in the 1980s and wrote about it in "Liar's Poker."

His new book, bearing the traces of a rush job of writing, tries to explain the great collapse of September 2008 through the stories of the few buyers and sellers who sensed that the American economy was a house of cards waiting to fall.

What happened in the late summer of 2008 has been compared with the Great Depression for its devastation of the financial system. The causes, though, as well as the attempted corrections, are not similar. Only the culprits -- Wall Street and the banks -- and the victims -- Americans -- are the same.

The savior, as usual, is the federal government. Mr. Lewis concludes:

"The world's most powerful and highly paid financiers had been entirely discredited; without government intervention every single one of them would have lost his job, and yet those same financiers were using the government to enrich themselves."

By now, we know, if barely understand, how our major financial institutions essentially gambled on the millions in shaky mortgages sold to middle and lower income buyers who really had no business getting credit. A key to the short-term success of this approach was the willingness of bond-rating companies to assign top value to dubious loans, thus disguising their worth.

"The Big Short: Inside the Doomsday Machine"
By Michael Lewis
Norton ($27.95)

The other is something called a "credit default swap," a complicated kind of insurance policy on credit risks that finally exposed lenders bankruptcy when the economy collapsed.

When the housing market sagged and the defaults began, this trillion-dollar subprime-lending monster died, taking banks and companies with it.

Mr. Lewis located a small knot of brilliant, quirky independent deal makers such as Steve Eisman, a profane gadfly who alienated Wall Street regulars, Michael Burry, a physician with Asperger's disorder who found dealing with investors via e-mail easier than face-to-face with patients and Charles Ledley who ran a money management firm out of his California garage.

This anecdotal history of the crisis is entertaining, to a point, but Mr. Lewis struggles to integrate the quirky stories with explanations of the complex process that brought the economy to its knees.

The real insiders, who Mr. Lewis implies, were largely unaware of the unfolding disaster, contribute little to his book. Also silent are the federal government officials who were asleep at the wheel, a response hard to figure because of the enormity of the situation.

Add those factors to the hurried, unpolished nature of Mr. Lewis' style -- "taxis appeared haphazardly ... like farm trout rising to corn kernels" -- and the result is both frustrating and unimpressive, more of a quick-hit account of images rather than an in-depth analysis.

The title comes from the Wall Street strategy, "selling short," in which stock is "borrowed" rather than bought, then sold in hopes that it can be returned to the lender at a profit when the stock price falls.

Bob Hoover: 412-263-1634 or . First Published March 7, 2010 5:00 AM


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