Liam Halligan

Michael Lewis vs Wall Street’s new predators

His latest book has started a war of words. It deserves to

[Getty Images/Shutterstock/iStock/Alamy]

‘The US stock market is rigged.’ That’s the j’accuse headline that screams out from Flash Boys, the new book by Michael Lewis. It’s a very big claim, made by America’s foremost financial writer. It’s also a claim that, after years of accumulating evidence, warrants extremely close and sustained official scrutiny.

Lewis produced Liar’s Poker, his first bestseller, in 1989 — after a four-year stint as a fresh-from-the-Ivy-League bond dealer at the now defunct firm Salomon Brothers. The book, an insider’s account, brilliantly lampooned the macho, aggressive behaviour of the ‘big swinging dicks’ who paced the carpet-tiled trading floors. Liar’s Poker defined popular understanding of Wall Street in the go-go, testosterone-fuelled 1980s.

Another Lewis hit was Moneyball, published in 2003. This explained how major league baseball coaches were increasingly picking teams on the strength of highly detailed performance data generated by obsessive statisticians, eschewing traditional attributes such as physique, athleticism and character. More fascinating ‘gee whizz’ reportage than finger-pointing exposé, Moneyball showed how poorer teams could beat the big boys by buying cheaper, yet more effective players. A riveting David versus Goliath story, Money-ball confirmed Lewis’s knack of conveying a complex subject via crystal-clear writing and larger-than-life characters.

While it was wildly successful, eventually generating a spin-off movie starring Brad Pitt, Moneyball was merely Lewis’s wind-up before delivering a much harder, more challenging pitch. The Big Short, published in 2010, took him back to Wall Street, providing a penetrating account of the build-up of the western world’s deeply destructive housing and credit bubble during the 2000s.

Described by Reuters as ‘probably the best single piece of financial journalism ever written’, The Big Short analysed how the international banking system came off the rails, with devastating consequences for the global economy, due to the crass, immoral behaviour of those running some of the world’s biggest banks.

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