The Big Short

by

Michael Lewis

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Themes and Colors
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
LitCharts assigns a color and icon to each theme in The Big Short, which you can use to track the themes throughout the work.

Outsiders vs. Conformists

In The Big Short, former Wall Street trader Michael Lewis profiles several real people who correctly predicted the 2007 global financial collapse and were able to profit from it. All of these people were outsiders to the mainstream financial system in some way. Before the crash, many of the characters struggled to get people to understand and support their ambitions. For example, even as a boy, hedge-fund manager Michael Burry had trouble connecting with other…

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Wall Street’s Culture of Overconfidence

A paradox at the heart of The Big Short is the role of overconfidence on Wall Street: while traders have to project confidence in order to make big deals and get people to trust them, Wall Street’s rampant overconfidence is part of what led to the financial collapse. This is to say that there’s a professional incentive for financiers to act like they know everything and they’re always right, but once traders actually believe this…

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The Problems with Capitalism

Though the subjects of The Big Short all work on Wall Street—the heart of American capitalism—many of them are somewhat skeptical of capitalism by the book’s end. This is in part due to their moral disgust about getting rich via the misfortune of millions of everyday Americans, and it’s in part because they’ve seen firsthand that the rules of the American economy often favor the rich while hurting everyone else. The book explores several ways…

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Pessimism vs. Optimism

The years leading up to the Great Recession in the United States were a time of great (and unfounded) optimism in the financial markets. Investors and regulators ignored warning signs of the impending financial crash, believing that the current boom would continue indefinitely. The people whom Michael Lewis (a former Wall Street trader) profiles in The Big Short are outliers: people who saw the warning signs, even when those around them were optimistic. Though they…

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Needless Complexity

The Big Short claims that the financial collapse occurred, in part, because the world of finance got so overcomplicated that not even those who were running it could really understand what was going on. Michael Lewis describes a series of financial innovations, such as credit default swaps, that were—by design—incredibly difficult to understand. Because of this, most traders and their bosses didn’t realize that there was something catastrophically wrong with the subprime mortgage bond market—something…

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