The Big Short Extra Credit
Task: After reading the novel The Big Short: Inside The Doomsday Machine by Michael Lewis,
please answer the following questions. All of your answers should be a few sentences to a
paragraph in length unless specified. The final question which should be at least a one page
(double spaced) analysis.
- Please feel free to type your answers to the questions directly into this document.
This paper is due Wednesday December 13th and is worth a potential 20 points
1. Please identify each of the following characters and a brief description of what their job was,
and their general attitude toward the Wall Street. Also talk about how they learned/figured out
about shorting the bond market
- Steve Eisman
- Greg Lippmann
- Jamie Mai
- Charles Ledley
- Ben Hockett
- Michael Burry
2. Two of the most important concept that the book functions on is the idea of short selling
(Shorting the Market) and using Credit Default Swaps. Explain what each of these concepts are.
3. In a paragraph summarize a few of problems that the Michael Lewis points out about how our
financial system was set up? Some ideas you could follow are how the system was made to fail
or how it has not updated with the changing time and economy.
4. Where, or on whom, does Michael Lewis place blame for the events leading up to the crash?
Please explain your answer.
5. What role did the rating agencies (Moody's, Standard & Poor's, and Fitch) play in the market
collapse? Were they at fault, or was the system such that they were forced to become unwilling
partners? Please explain your answer.
6. Talk about the mortgage initiators. What role did they play? Discuss the array of mortgages
offered and how they destabilized the system.
7. Steve Eisman, Mike Burry, and the men who ran the "garage band hedge fund" made huge
fortunes off the downfall of others. Do you see them as prophetic heroes, greedy
opportunists...or something else? Explain your answer in a paragraph.
