41 of 42 people found the following review helpful
Lewis decides to become a financial disaster tourist, and travels to various bankrupt European countries. He wants to find out at the ground level, what happened in; Iceland, Greece, and Ireland. Well Lewis collects the data he was looking for, and spins out quite the story.
In a nutshell these countries get a hold of cheap foreign credit, and go into a wild financial mania. They also abandon all previous forms of prudent economic management. The details regarding the Greek economy, are beyond anything I have ever heard before. In fact, the Greek situation makes the former Tulip Mania and Dot Com Bubble, seem rather tame and orderly. The Greek debt problems have still not been fully resolved, so this makes the details all the more engaging.
This is a small book, but the message delivers a big impact. The reader will be left with, a much better understanding of the current global financial dilemma. This book was hard to put down, and a very good read. Both general and financially interested readers, will be entertained and astonished.
12 of 12 people found the following review helpful
Bestselling author Michael Lewis delivers again with this series of themed travelogues about the financial crisis and originally published in Vanity Fair. Each of the articles stands well on its own, but in series they manage to bring an additional element, a much broader perspective on the financial crisis and on human nature.
Lewis travels to the major hot-spots: Iceland, Greece, Ireland, Germany and the US, noting the similarities and the differences in each of their situations, but mostly letting the individual characters who populate his essays tell the stories. Descriptions of people are rich, humorous, playful and cutting, but never mean spirited - the kind of descriptions your friends might use at your roast. Descriptions of countries' national characters and of specific places are equally pithy; 'it's the sort of place bankers stay because they think it's where the artists stay.'
As expected, bank leadership, politicians and regulators fare poorly in Lewis' crosshairs, and although they play small walk-on parts, investment banks such as Merrill Lynch come across as morally bankrupt and duplicitous, far worse than their aforementioned dimwitted but greedy co-conspirators. Lewis is finance literature's equivalent of television's Jon Stewart, calling all out on their motives, their revisionist explanations, and their mistakes. Ultimately, though, Lewis settles on the root cause - it's us; it's human nature and short term thinking. One of his interviewees sums it up best when he says about the virtual bankruptcy of his city, 'I think we've suffered from a series of mass delusions.'
As much as Charles Kindleberger's excellent book Manias, Panics, and Crashes: A History of Financial Crises offers a deep retrospective of the evidence of our foibles, Boomerang offers finely drawn characters who give insight into the human behaviour that inevitably leads to the crashes. A much different perspective, much more enjoyable to read, but no less effective. (Margaret Atwood's Payback: Debt and the Shadow Side of Wealth is an equally excellent and alternative take).
As a former bond trader himself, Lewis has an easy grasp of the issues, the interests and the conflicts, and he segues from character to character and setting to setting to weave his story in the most entertaining and engaging of ways. These strengths set Lewis apart from most financial writers who concentrate on a chronological recounting of facts, with character development playing second fiddle. In all of the best ways in these short articles, Lewis is like Charles Dickens with a sketchbook rather than the vast canvas of a full length novel.
You really should read this book. You will be entertained, you will learn something, and whatever your political or economic stripe, you will pause for some self reflection, because in the end the financial crisis boomerangs back to us and to human nature.
11 of 11 people found the following review helpful
on November 7, 2011
Boomerang is a good sequel to The Big Short which covered the mortgage default debacle very well. We were left wondering as things continued and we never made it out of the depression. Boomerang explains what happened in Iceland, then Ireland, and now in Greece. He also explains how American consultants, the very same who were responsible for engineering mortgage default swaps were paid big bucks to 'advise' Ireland and Greece. Iceland did it on their own. He also explains why Germany is the way it is. It ends with examples from USA. Fasten your seat belts. It is not over! He tells us why things can't remain as they are or were. An excellent read. So timely as we watch the government of Greece tripping over themselves to build a trogen horse in an effort to get $$$ from Germany. The book is quick and easy to read. Michael is someone who can explain this in simple terms because he knows the subject well.
3 of 3 people found the following review helpful
Once again, Lewis has outdone himself when it comes to reporting on and analysing the internal workings of the global money markets. From the author of "The Big Short" and "Liar's Poker" we now have "Boomerang". This juicy little collection of satirical essays reflects on the geopolitical fallout from the market meltdown of 2008. Lewis, in his own unique fashion, sifts through the many wreckages of financial incompetence and malfeasance in search of answers as to why such a catastrophic event of three years ago is not going away any time soon. So much for assuming that our global banking systems will protect us from any long-term endangerment caused by financial mismanagement, if the present state of the economies of Iceland, Ireland, Greece and Germany are anything to go by. Looking at these four countries as major examples of how deep this financial crisis has gone long after the first rumblings of the subprime mortgage debacle, Lewis sees a recurring problem. The central banks of this world are almost powerless to continue financing the incredible debt loads that have piled up from the unbelievable deregulated borrowing and spending binge of the past decade. A tour of the industrial landscape of the first three countries shows economies that are permanently disabled because their GDP is too weak to even cover the interest charges on their indebtedness. Permanent bail-out plans now have to be implemented just to contain the problem. Supposedly bona fide banks like the Allied Irish and several big Icelandic ones have collapsed and with them people's savings; thousands of housing projects still remain empty; currencies continue to devalue; and more Eurozone countries threaten to default on their debts. Germany is included in this study because Lewis sees it as the lender of first resort that helped finance much of the reckless and senseless borrowing of its neighbouring countries in an effort to assert great leadership over continental Europe. The price for 'crapping' so many easy euros is that Germany is now faced with cleaning up the mess with enormous negative consequences to its own economic welfare.I highly recommend this book for its ability to find the stories and the people that go with the events and make them both entertaining and enlightening in their telling.
3 of 3 people found the following review helpful
on December 20, 2011
This is the first Lewis book I've read and found it very light reading. It was a nice combination of stories and facts that drove home reasons for the economic crisis that countries find themselves in today. I don't have a problem with the fact that the articles can be found for free on a website. I was willing to pay the $10 to download the book and have the information in one place.
Boomerang explores five countries' experience with sovereign debt. This book is an easy and entertaining read because amusing anecdotal evidence is used to support the reasons behind each country's economic difficulty. From the twenty million nickels bought as a hedge against economic collapse to the exploding cars for insurance purposes, Lewis provides some great examples that illustrate the economic conditions countries find themselves.
The book starts with a visit to Kyle Bass, a hedge fund manager who financially benefitted from the 2008 collapse. Bass has a large inventory of gold and precious metals and has now turned his attention to nickel by buying one million dollars worth, 20 million nickels. Bass' view on current economic suffering is an atonement for Wall Street's behavior.
Lewis then moves on to Iceland where "When their three brand-new global-size banks collapsed, Iceland's 300,000 citizens found that they bore some kind of responsibility for $100 billion in banking losses--which works out to roughly $330,000 for every Icelandic man, woman, and child." Lewis goes further in describing the billions lost in currency speculation and the 85% collapse of Iceland's stock market to result in unknowable amount of loss for the average Icelander. Lewis sets up an exploding vehicle syndrome with this description of the financial state Icelanders found themselves in. "Now many Icelanders--especially young Icelanders--own $500,000 houses with $1.5 million mortgages, and $35,000 Range Rovers with $100,000 in loans against them. To the Range Rover problem there are two immediate solutions. One is to put it on a boat, ship it to Europe, and try to sell it for a currency that still has value. The other is set it on fire and collect the insurance: Boom!"
Boomerang leaves us with an Iceland that has its Krona being a shadow of the peak period, a lamp that was out of stock now costs three times the amount before the crash, its work force ill-suited for the endowment it has, and insufficient political acumen to get it out of its predicament. The latest report on Iceland however, is that it is one of the bright lights in the economic recovery with 3% GDP growth. Iceland let its banks default and have deleveraged and returned to economic growth, something a small country can do without jeopardizing the world financial system.
Lewis then moves onto Greece, the next stop on this tour of economic devastation. The explanation of Greece's debt comes from its culture, government spending without revenue collection. Lewis does a good job of annotating the level of ridiculousness Greece's public sector has come to "The average government job pays almost three times the average private-sector job." And "Stefanos Manos pointed out that it would be cheaper to put all Greece's rail passengers into taxicabs" are two examples of the state of Greek public spending.
While in Greece, Lewis stays at the Vatopaidi monastery, the soul of corruption for this country. The monastery had fallen into disrepair but Father Ephraim uses three prongs to rebuild: relationships with the rich, international outreach, and real estate which provides the most interesting story of the Greek experience. Father Ephraim and others turn an ancient deed and a worthless lake into millions or even billions of dollars.
Ireland is the next stop on this tour where the Anglo Irish bank looses 34 billion Euros or $3.4 trillion in the crisis. Total Irish bank losses tally to 106 billion Euros or $10.6 trillion. Lewis explains "The Irish budget deficit--in 2007 the country had a budget surplus--is now 32 percent of its GDP, the highest by far in the history of the euro zone." Lewis does a great job in contrasting where Ireland has come from and what it has achieved only to be set back by the greed of the finance industry. "In late 2006 the unemployment rate stood at a bit more than 4 percent; now it's 14 percent, and climbing toward rates not experienced since the mid-1980s."
Before leaving Europe, Lewis describes Germany's role in the economic crisis. German's are described as trusting American financial statements as reliable and therefore suffered by investing in them. The German bank IKB became Wall Street's best customer. IKB hired Dirk Rothig, someone with financial experience in the States, to do something new and unusual for the bank. Rothig invented something called a conduit which grew the IKB portfolio from $10 billion in 2005 to $20 billion in 2007, according to Rothig. IKB ended up losing $15 billion on US subprime loans.
The last stop on this tour of economic disaster comes back to the U.S. where Lewis looks at a 60 Minutes interview of Merideth Whitney and her analysis of the financial condition of State debt. Whitney doesn't think the States will have a problem because they can transfer their debt to the counties and the cities. This is where Lewis spends his last stop, analyzing a city in the worst financial condition in the States, Vallejo California. In Vallejo, businesses post "WE ACCEPT FOOD STAMPS" on their windows, weeds surround abandoned businesses, and traffic lights permanently blink since there are no police in the streets. Real estate in Vallejo fell 66% between 2006 and 2010. The main cause for this city's woes were public safety wage contracts that resulted in bankruptcy.
Lewis concludes this trip with comments about human nature and the lack of forethought for everything from obesity to gambling, drug and alcohol addiction, and of course personal indebtedness. "Americans sacrifice their long-term interests for a short-term reward." This describes the underlying problem with the world economy today.
2 of 2 people found the following review helpful
on November 3, 2012
Lewis demonstrates with great panache that one book can be funny, brilliant and dead wrong, all at the same time. In Lewis's case, this is aggravating. His assessments of world fiscal situations have the ring of freshness, experience, truth and wisdom, yet his assessments of people, often quite humorous, are unsteady and thus undercut whatever it is he wishes to say about the economic situation, which is a lot. He seems somewhat unaware of his own presence, so when he walks down an Icelandic street and enters a series of collisions with Icelandic men, it doesn't seem to occur to him that he may have broken a social rule about how strangers pass on a street. Instead he belittles Icelandic society. It gets worse. He slams the Germans, for instance, for having a language and a culture built around images of filth, without noting that American culture does the same thing. Another example: he spends a lot of time harassing people from numerous countries for ridiculous and irresponsible behaviour, yet when he comes to his native California he glosses over the same irresponsible behaviour as if it weren't even there. That's cowardly and untrustworthy. Buy a box of salt, enjoy Lewis's style, hold your nose when he goes off the deep end, and read this as a model, in style and form, that can lead to a truly great book in the hands of a different writer. By all means, read it, though. There's some real smart stuff in here, in a refreshing format. Just beware. People aren't totally his thing.
1 of 1 people found the following review helpful
on December 31, 2011
This is a slim book.
And it's certainly not an 'academic tome'.
It is anecdotal. It's the kind of 'story' that someone that sits down beside you at a diner counter would regale you with.
But man, is it powerful.
I'm no 'dumb-bunny'. I stay on top of things news-wise probably as well as most people. And I was aware of the reasons behind the financial crisis of 2008 and what's followed. I could provide fuzzy answers to some questions about it all.
This book made me realize how much I didn't know.
I've not read any of Mr. Lewis's books before. I've seen two film adaptations. 'The Blind Side' and 'Moneyball'. He is a wonderful writer, the equal of two of my non-fiction faves, Jared Diamond and Simon Winchester.
Anyone wanting to get a fresh, honest, simple perspective on what the stories are behind the story of our impending financial disaster, look no further. Take a seat at the diner counter and settle in for a very disturbing tale.
Personal rating: 9/10 (I wish there'd been more.)
2 of 2 people found the following review helpful
on November 2, 2011
This book does not have the depth or rigour of Lewis's earlier work. It is an easy read because of that. The stories told seem to me to be a simplistic view of the economic crises in the countries covered but are still solid as a major cause. If you are wondering how the global financial crisis got traction this is a good start.
2 of 2 people found the following review helpful
on December 7, 2011
Like all Michael Lewis books Boomerang is constantly revealing meaningful details that shock and entertain. Lewis seems to be a step ahead of the field in all 4 of his dynamic books.
"And you shall give the money, with which the excess number of them is redeemed, to Aaron and his sons." -- Numbers 3:48 (NKJV)
Did you ever win big in the lottery, obtain a large inheritance you didn't expect, get an extra several thousand dollars added to your credit limit, or take out a home equity line of credit? If so, you'll know what this book is all about: Suddenly having a lot of money available . . . and how you responded to that circumstance. Most people find something to spend it on . . . either for fun, for potential profit, or for foolish investments.
In the recent global expansion, ridiculously cheap debt was available to hundreds of millions of people and to governments of all kind in a way that was unprecedented. Almost everyone got themselves into financial trouble in the process.
In Boomerang, that entertaining writer of financial folly, Michael Lewis, visits Iceland, Greece, Ireland, Germany, and California to describe what happened differently in each case. You'll find his descriptions hilarious . . . if obviously oversimplified for good punch line effects. He leaves you in one of the most desperately broke municipalities in the world, providing a vision of what the future will look like for many of those governments that overspent.
While it's not up to Liar's Poker or The Big Short, Boomerang makes for a fun, quick read that will give you lots of laughs . . . and leave you with some solid food for thought about any debt crisis that might be impending in your part of the world.
The book could have been improved a lot by including some more overspending countries (such as building entirely empty cities that no one ever occupies in China to meet government quotas for growing the economy, Japan trying to spend its way out of a demographic disaster, and nations all around the world spending like crazy to put in infrastructure to supply demand that will evaporate as soon as all the governmental overspending is inevitably cut back). The substance could also have been increased to better balance the tongue-in-cheek oversimplifications of national "character." In places, the sections feel a lot like fluff (especially the section on Iceland).