I have to admit that I am a Michael Lewis fan. And that is mostly because he used to be a trader at Salomons. Well not actually because hew was a trader, but because he is now a writer who writes about the behaviour of financial markets and financial institutions, but because he has the experience of being a trader at a top investment bank, going through their training programme and working on the trading floor, he gives an insight into the operation of Wall Street and the City that is unmatched by all the other financial journalists. He also has a succinct but eminent readable style that makes his books and articles enjoyable.
So it was a joy to hear him last night on Loose Ends on Radio 4 . Strange as it was to heara financial commentator amongst the luvvies, it showed just how entertaining he can make his stories, and this latest story which appears to be a reworking of a Vanity Fair article of June 2009 was published in the spring of last year, but he has only just got around to UK promotional tour. So let me push his book The Big Short: Inside the Doomsday Machine, but add that if you really want the lowdown on CDO's and the financial crisis, one of the best reads is this Harvard undergraduate paper.
The latter is well written and researched albeit by someone completely outside the system. What is really concerning is that if Michael Lewis and Anna Katherine Barnett-Hart, who wrote the undergraduate paper, could see the flaws in the system while several steps removed from the process, what happened to all the expensive corporate governance and risk management at these many institutions.
Oh yes, I remember, they sold out to the bonus culture.