I'd recommend Lewis' work because he writes so well and so clearly about the products at the heart of the crisis. He is pretty illustrative because the book that made his name, Liars' Poker, was about the origins of the trader culture and the beginnings of the mortgage derivatives business on the Street in the 1980s. Read that, and his accounts of traders "ripping the faces off" of their banks' clients, and you will understand why Ayn Rand is so popular on Wall Street.
His handicap is that he is, by and large, a narrative writer with a story, and villains/ignoramuses and lonely heroes (in this case, the "shorts", or the guys who bet against the mortgage market, not all of whom were small potatos --- absent from his book, for instance, is John Paulson, the protagonist of The Greatest Trade Ever, or Magnetar Capital, the hedge fund that drove much of the subprime mortgage bond demand in 2006-2007. This makes his stories very interesting and readable, but somewhat slanted and a bit skewed from a journalistic aspect. What he doesn't get is that the "shorts" like his heroes, like Paulson and Magnetar, were absolutely critical to the formation of the synthetic CDOs and the CDS markets that made the real estate bubble into a systemic crisis. It would not have happened without them.
For a good basis of what the book is about, check out this Portfolio article by Lewis: The End of Wall Street's Boom.
Bookmarks