Yes, this is two books in a row I've read about non-fictional economic turmoil. Good catch. This one is about our current troubles.
And I'm kind of ashamed to say this is the first book by Michael Lewis I've read. He's a gifted writer with great reporting skills, has a deft touch with characters, and a good storyteller. In addition to books about business and finance, he's written a couple books about sports: Moneyball and The Blind Side. The latter was made into that quite decent heartstring-tugging Sandra Bullock movie.
But Lewis's task here is to investigate why things tanked back in 2007-2008. He does this by telling stories about people who, against all prevailing opinion, managed to foresee the upcoming disaster. For example: Michael Burry, a private fund manager. He had built up a small and select clientèle by doing a decent job of equity-buying. To the consternation of many his clients, he started making ever-increasing bets against the home-mortgage market. Before things went south, this drove his investors slightly crazy; he stuck to his guns and wound up looking like a genius.
The people Lewis follows not only bucked conventional financial wisdom, they're also colorful in other ways, most notably in their lack of social skills. (For example, Burry finds out he has Asperger syndrome during all this.) Their conflicts with the more staid groupthinking peers are entertaining. It might make a good movie, and, well, guess what?
If you're interested in the origins of our financial crisis, you'll want to read this. Especially if, like me, you've always wondered what a "tranche" is. You won't want to read only this though; Lewis's stories aren't the only story. And he's very wedded to the good-guy/bad-guy scenario of wheeler-dealers duping innocent civilians into taking out huge mortgage loans they had zero chance of ever paying back. Fannie Mae and Freddie Mac only get mentioned once, at the very end.
Still, Lewis has a very powerful point: the numbskull investment bankers, managers, and bond-rating agencies were systematically stupid, and got rich anyway. How does that happen?