The Big Short

by

Michael Lewis

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Michael Lewis Character Analysis

As the author of The Big Short, Michael Lewis doesn’t simply give an impartial account of the story’s events; he provides commentary and context, sometimes appearing in the story as a character himself. By the time Lewis wrote The Big Short, he had already written a dozen previous books, including Liar’s Poker, which is also about Wall Street and deals more directly with Lewis’s personal history as a trader. Part of what inspired Lewis to write The Big Short was the research he was doing for an anniversary edition of Liar’s Poker. Despite his earlier time as a trader (or maybe because of it), Lewis is an outspoken critic of the American financial system. As he tells the story of the lead-up to the Great Recession, he doesn’t attempt to hide the fact that he sympathizes most with the people in the story who correctly predicted the crash—and who were able to profit from it by holding a short position (including Steve Eisman, Vinny Daniel, Danny Moses, Mike Burry, Ben Hockett, Charlie Ledley, and Jamie Mai). But while Lewis admires confident outsiders, he gives less sympathetic portrayals to figures like Howie Hubler and Joseph Cassano, who lost catastrophic amounts of money through their own hubris. At the end, Lewis meets with his old boss, John Gutfreund. He recognizes that Gutfreund helped set in motion many of the events that led to the financial crisis, but Lewis still can’t help being fascinated by him, showing that even after the events of The Big Short, Lewis still has a complicated relationship with Wall Street.

Michael Lewis Quotes in The Big Short

The The Big Short quotes below are all either spoken by Michael Lewis or refer to Michael Lewis. For each quote, you can also see the other characters and themes related to it (each theme is indicated by its own dot and icon, like this one:
Outsiders vs. Conformists  Theme Icon
). Note: all page numbers and citation info for the quotes below refer to the W.W. Norton edition of The Big Short published in 2010.
Prologue Quotes

The willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grown-ups remains a mystery to me to this day.

Related Characters: Michael Lewis (speaker), John Gutfreund , Steve Eisman, Ben Hockett
Page Number: xiii
Explanation and Analysis:

When I sat down to write my first book, I had no great agenda, apart from telling what I took to be a remarkable tale. If you’d gotten a few drinks in me and then asked what effect the book would have on the world, I might have said something like, “I hope that college students trying to decide what to do with their lives might read it and decide that it’s silly to phony it up, and abandon their passions or even their faint interests, to become financiers.” I hoped that some bright kid at Ohio State University who really wanted to be an oceanographer would read my book, spurn the offer from Goldman Sachs, and set out to sea.

Related Characters: Michael Lewis (speaker)
Page Number: xv
Explanation and Analysis:
Chapter 1 Quotes

By the time Household’s CEO, Bill Aldinger, collected his $100 million, Eisman was on his way to becoming the financial market’s first socialist. “When you’re a conservative Republican, you never think people are making money by ripping other people off,” he said. His mind was now fully open to the possibility. “I now realized there was an entire industry, called consumer finance, that basically existed to rip people off.”

Related Characters: Michael Lewis (speaker), Steve Eisman (speaker), Michael Lewis, Valerie Feigen
Related Symbols: Bonds
Page Number: 20
Explanation and Analysis:

Most people didn’t understand how what amounted to a two-decade boom in the bond market had overwhelmed everything else. Eisman certainly hadn’t. Now he did. He needed to learn everything he could about the fixed income world. He had plans for the bond market. What he didn’t know was that the bond market also had plans for him. It was about to create an Eisman-shaped hole.

Related Characters: Michael Lewis (speaker), Steve Eisman
Related Symbols: Bonds
Page Number: 25
Explanation and Analysis:
Chapter 2 Quotes

A lot of hedge fund managers spend time chitchatting with their investors and treated their quarterly letters to them as a formality. Burry disliked talking to people face-to-face and thought of these letters as the single most important thing he did to let his investors know what he was up to. In his quarterly letters he coined a phrase to describe what he thought was happening: “the extension of credit by instrument.” That is, a lot of people couldn’t actually afford to pay their mortgages the old-fashioned way, and so the lenders were dreaming up new instruments to justify handing them new money.

Related Characters: Michael Lewis (speaker), Michael Burry
Related Symbols: Bonds
Page Number: 28
Explanation and Analysis:

He sensed that he was different from other people before he understood why.

Related Characters: Michael Lewis (speaker), Michael Burry
Page Number: 31
Explanation and Analysis:
Chapter 3 Quotes

The least controversial thing to be said about Lippmann was that he was controversial. He wasn’t just a good bond trader, he was a great bond trader. He wasn’t cruel. He wasn’t even rude, at least not intentionally He simply evoked extreme feelings in others. A trader who worked near him for years referred to him as “the asshole known as Greg Lippmann.” When asked why, he said, “He took everything too far.”

Page Number: 64
Explanation and Analysis:

The argument stopper was Lippmann’s one-man quantitative support team. His name was Eugene Xu, but to those who’d heard Lippmann’s pitch, he was generally spoken of as “Lippmann’s Chinese quant.” Xu was an analyst employed by Deutsche Bank, but Lippmann gave everyone the idea he kept him tied up to his Bloomberg terminal like a pet. A real Chinese guy—not even Chinese American—who apparently spoke no English, just numbers’ China had this national math competition, Lippmann told people, in which Eugene had finished second. In all of China. Eugene Xu was responsible for every piece of hard data in Lippmann’s presentation. Once Eugene was introduced into the equation, no one bothered Lippmann about his math or his data. As Lippmann put it, “How can a guy who can’t speak English lie?”

Related Characters: Michael Lewis (speaker), Greg Lippmann (speaker), Steve Eisman, Vincent Daniel, Daniel Moses , Eugene Xu
Page Number: 66
Explanation and Analysis:
Chapter 4 Quotes

Oddly, Cassano was as likely to direct his anger at profitable traders as at unprofitable ones, for the anger was triggered not by financial loss but by the faintest whiff of insurrection. Even more oddly, his anger had no obvious effect on the recipient’s paycheck; a trader might find himself routinely abused by his boss and yet delighted by his year-end bonus, determined by that same boss.

Related Characters: Michael Lewis (speaker), Joe Cassano , Gene Park
Page Number: 87
Explanation and Analysis:

In his search for stock market investors he might terrify with his Doomsday scenario, Lippmann had made a lucky strike: He had stumbled onto a stock market investor who held an even darker view of the subprime mortgage market than he did. Eisman knew more about that market, its characters, and its depravities than anyone Lippmann had ever spoken with. If anyone would make a dramatic bet against subprime, he thought, it was Eisman—and so he was puzzled when Eisman didn’t do it. He was even more puzzled when, several months later, Eisman’s new head trader, Danny Moses, and his research guy, Vinny Daniels, asked him to come back in to explain it all over again.

Related Symbols: Bonds
Page Number: 92
Explanation and Analysis:
Chapter 5 Quotes

Even as late as the summer of 2006, as home prices began to fall, it took a certain kind of person to see the ugly facts and react to them—to discern, in the profile of the beautiful young lady, the face of an old witch.

Related Characters: Michael Lewis (speaker), Steve Eisman, Greg Lippmann
Related Symbols: Bonds
Page Number: 107
Explanation and Analysis:

Every new business is inherently implausible, but Jamie Mai and Charlie Ledley’s idea, in early 2003, for a money management firm bordered on the absurd: a pair of thirty-year-old men with a Schwab account containing $110,000 occupy a shed in the back of a friend’s house in Berkeley, California, and dub themselves Cornwall Capital Management. Neither of them had any reason to believe he had any talent for investing. Both had worked briefly for the New York private equity firm Golub Associates as grunts chained to their desks, but neither had made actual investment decisions.

Page Number: 108
Explanation and Analysis:
Chapter 6 Quotes

He’d graduated from the University of Rhode Island, earned a business degree at Babson College, and spent most of his career working sleepy jobs at sleepy life insurance companies—but all that was in the past. He was newly, obviously rich. “He had this smirk, like, I know better,” said Danny. Danny didn’t know Wing Chau, but when he heard that he was the end buyer of subprime CDOs, he knew exactly who he was: the sucker. “The truth is that I didn’t really want to talk to him,” said Danny, “because I didn’t want to scare him.”

Related Characters: Michael Lewis (speaker), Daniel Moses (speaker), Steve Eisman, Vincent Daniel, Greg Lippmann, Wing Chau
Related Symbols: Bonds
Page Number: 139
Explanation and Analysis:

The trouble, as ever, was finding Wall Street firms willing to deal with them. Their one source of supply, Bear Stearns, suddenly seemed more interested in shooting than in trading with them. Every other firm treated them as a joke. Cornhole Capital. But here, in Las Vegas, luck found them.

Page Number: 149
Explanation and Analysis:
Chapter 7 Quotes

Charlie Ledley and Ben Hockett returned from Las Vegas on January 30, 2007, convinced that the entire financial system had lost its mind. “I said to my mother, ‘I think we might be facing something like the end of democratic capitalism,’ She just said, ‘Oh, Charlie,’ and seriously suggested I go on lithium.”

Page Number: 160
Explanation and Analysis:

It made no sense: The subprime CDO market was ticking along as it had before, and yet the big Wall Street firms suddenly had no use for the investors who had been supplying the machine with raw material—the investors who wanted to buy credit default swaps. “Ostensibly other people were going long, but we were not allowed to go short,” said Charlie.

Related Characters: Michael Lewis (speaker), Charlie Ledley and Jamie Mai (speaker), Ben Hockett
Related Symbols: Bonds
Page Number: 163
Explanation and Analysis:
Chapter 8 Quotes

Now, in February 2007, subprime loans were defaulting in record numbers, financial institutions were less steady every day, and no one but him seemed to recall what he’d said and done. He had told his investors that they might need to be patient—that the bet might not pay off until the mortgages issued in 2005 reached the end of their teaser rate period. They had not been patient. Many of his investors mistrusted him, and he in turn felt betrayed by them.

Related Characters: Michael Lewis (speaker), Michael Burry
Related Symbols: Bonds
Page Number: 180
Explanation and Analysis:

After a few pages, Michael Burry realized that he was no longer reading about his son but about himself. “How many people can pick up a book and find an instruction manual for their life?” he said. “I hated reading a book telling me who I was. I thought I was different, but this was saying I was the same as other people. My wife and I were a typical Asperger’s couple, and we had an Asperger’s son.”

Related Characters: Michael Lewis (speaker), Michael Burry (speaker)
Page Number: 182
Explanation and Analysis:
Chapter 9 Quotes

Howie Hubler had grown up in New Jersey and played football at Montclair State College. Everyone who met him noticed his thick football neck and his great huge head and his overbearing manner, which was interpreted as both admirably direct and a mask. He was loud and headstrong and bullying.

Related Characters: Michael Lewis (speaker), Howie Hubler , Michael Burry
Page Number: 200
Explanation and Analysis:

In the murky and curious period from early February to June 2007, the subprime mortgage market resembled a giant helium balloon, bound to earth by a dozen or so big Wall Street firms. Each firm held its rope; one by one, they realized that no matter how strongly they pulled, the balloon would eventually lift them off their feet.

Related Characters: Michael Lewis (speaker), Howie Hubler
Related Symbols: Bonds
Page Number: 209
Explanation and Analysis:
Chapter 10 Quotes

Now the metaphor was two men in a boat, tied together by a rope, fighting to the death. One man kills the other, hurls his inert body over the side-only to discover himself being yanked over the side. “Being short in 2007 and making money from it was fun, because we were short bad guys,” said Steve Eisman. “In 2008 it was the entire financial system that was at risk. We were still short. But you don’t want the system to crash. It’s sort of like the flood’s about to happen and you’re Noah. You’re on the ark. Yeah, you’re okay. But you are not happy looking out at the flood. That’s not a happy moment for Noah.”

Related Characters: Michael Lewis (speaker), Steve Eisman (speaker)
Page Number: 227
Explanation and Analysis:

It wasn’t Eisman who upset the tone in the room, but some kid in the back. He looked to be in his early twenties, and he was, like everyone else, punching on his BlackBerry the whole time Miller and Eisman spoke. “Mr. Miller,” he said. “From the time you started talking, Bear Stearns stock has fallen more than twenty points. Would you buy more now?”

Miller looked stunned. “He clearly had no idea what had happened,” said Vinny. “He just said, ‘Yeah, sure, I’d buy more here.’”

After that, the men in the room rushed for the exits, apparently to sell their shares in Bear Stearns. By the time Alan Greenspan arrived to speak, there was hardly anyone who cared to hear what he had to say. The audience was gone. By Monday, Bear Stearns was of course gone, too, sold to J.P. Morgan for $2 a share.”

Page Number: 235
Explanation and Analysis:

But the biggest lag of all was right here, on the streets. How long would it take before the people walking back and forth in front of St. Patrick’s Cathedral figured out what had just happened to them?

Related Symbols: Bonds
Page Number: 242
Explanation and Analysis:
Epilogue Quotes

The changes were camouflage. They helped to distract outsiders from the truly profane event: the growing misalignment of interests between the people who trafficked in financial risk and the wider culture. The surface rippled, but down below, in the depths, the bonus pool remained undisturbed.

Related Characters: Michael Lewis (speaker), John Gutfreund
Page Number: 254
Explanation and Analysis:

Until that moment I hadn’t paid much attention to what he’d been eating. Now I saw he’d ordered the best thing in the house, this gorgeous, frothy confection of an earlier age. Who ever dreamed up the deviled egg? Who knew that a simple egg could be made so complicated, and yet so appealing? I reached over and took one. Something for nothing. It never loses its charm.

Related Characters: Michael Lewis (speaker), John Gutfreund
Page Number: 264
Explanation and Analysis:
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Michael Lewis Character Timeline in The Big Short

The timeline below shows where the character Michael Lewis appears in The Big Short. The colored dots and icons indicate which themes are associated with that appearance.
Prologue
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Needless Complexity Theme Icon
Michael Lewis, the book’s author, recalls when he was 24 years old and working on Wall Street.... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
Lewis’s first book was about the bond market. At the time he was writing, Wall Street... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
Lewis hoped Liar’s Poker might spur college-age readers to turn down offers from investment banks and... (full context)
Outsiders vs. Conformists  Theme Icon
Lewis wonders how he would’ve contributed to the financial meltdown if he’d stuck around on Wall... (full context)
Outsiders vs. Conformists  Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
After talking with Whitney, Lewis read in the news about a man named John Paulson, who made phenomenal amounts of... (full context)
Outsiders vs. Conformists  Theme Icon
Pessimism vs. Optimism Theme Icon
...have seen it coming, but few of them actually did anything about it. Whitney gave Lewis a list of about six people who saw what was coming and were willing to... (full context)
Chapter 1
Outsiders vs. Conformists  Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Steve Eisman got into finance in the early 90s, shortly after Lewis got out. He gets his first job through his parents, who work at Oppenheimer securities,... (full context)
Outsiders vs. Conformists  Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
Lewis concludes that Eisman was a “curious character” entering Wall Street at the start of a... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
...others is Sy Jacobs, who went through the same training program at Salomon Brothers as Lewis and who went on to work at a small investment bank. Jacobs recounts to Lewis... (full context)
Chapter 2
Outsiders vs. Conformists  Theme Icon
The Problems with Capitalism  Theme Icon
Needless Complexity Theme Icon
...nothing, but if it does, you get a return several times larger than your investment. Lewis compares credit default swaps to a roulette game: one side puts money on the table... (full context)
Chapter 5
Outsiders vs. Conformists  Theme Icon
The Problems with Capitalism  Theme Icon
Needless Complexity Theme Icon
...into collateralized debt obligations (CDOs), the more they think the whole system is crazy. As Lewis puts it, “it was also a stunning opportunity: The market appeared to believe its own... (full context)
Chapter 6
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
...my market. Without you I don’t have anything to buy.” Eisman finally gets it. As Lewis puts it: “The credit default swaps, filtered through the CDOs, were being used to replicate... (full context)
Chapter 9
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
...is betting that some triple-B-rated bonds will go bad but not all of them. As Lewis puts it: “He was smart enough to be cynical about his market but not smart... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
...the company is asked to explain the loss and gives a jargon-filled response that leads Lewis to conclude “the CEO himself didn’t really understand the situation.” (full context)
Chapter 10
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Lewis uses a metaphor to describe the unraveling of the financial system: “Two men in a... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
Lewis describes a typical morning at 6:40 a.m. on Wall Street, with the big bank employees... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
...it isn’t clear that anything major has happened. People go about their business in Manhattan. Lewis asks, “How long would it take before the people walking back and forth in front... (full context)
Epilogue
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
At about the same time that Eisman, Danny, and Vinny are at St. Patrick’s, Lewis goes to lunch with his old boss, John Gutfreund. He hasn’t seen Gutfreund since quitting... (full context)
Outsiders vs. Conformists  Theme Icon
The Problems with Capitalism  Theme Icon
Needless Complexity Theme Icon
Gutfreund used to lie about not knowing Lewis, since his book Liar’s Poker caused Gutfreund public relations problems. At lunch, however, he is... (full context)
The Problems with Capitalism  Theme Icon
Needless Complexity Theme Icon
To Lewis, the line between gambling and investing is “artificial and thin.” He suggests maybe investing is... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
Gutfreund asks Lewis why he invited him to lunch. Lewis doesn’t want to tell the truth: that, though... (full context)
Outsiders vs. Conformists  Theme Icon
The Problems with Capitalism  Theme Icon
Needless Complexity Theme Icon
...as a simple panic, suggesting that the problems were not as severe as they seemed. Lewis disagrees, stating that “every major firm on Wall Street was either bankrupt or fatally intertwined... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
Lewis asks Gutfreund how he feels in hindsight about his decision to turn Salomon Brothers from... (full context)
Outsiders vs. Conformists  Theme Icon
Wall Street’s Culture of Overconfidence Theme Icon
The Problems with Capitalism  Theme Icon
Pessimism vs. Optimism Theme Icon
Needless Complexity Theme Icon
Lewis tells Gutfreund that he’s thinking of doing an anniversary edition of Liar’s Poker, now that... (full context)