Boomerang: A Travelogue of Economic RuinJanuary 24, 2012 at 5:43 PM | Posted in Books, Economics | Leave a comment
Tags: Boomerang, Credit Default Swaps, Frank McCourt, Michael Lewis, The Big Short
Michael Lewis is my favorite writer on finance as he was my Virgil, leading me to the land of Credit Default Swaps in The Big Short. Now, in Boomerang, he takes us on a delightful trip to visit the land of the broke and gullible.
Iceland is our first destination and I know it mainly as the venue for the famous Fisher/Spassky Chess Match in 1972 that got me hooked on chess for three weeks or so. I did not know this country of 300,000 people had gotten rich until they went broke. Apparently, people there are very related to each other and when they found that they could buy and sell from each other and make money, they went crazy. Iceland became a hedge fund until the king toppled over.
Of Greece I have you only look to the argumentative Socrates and his opponents to see the seeds of the latest calamity. They love to argue but not pay taxes. No one, Lewis reports, has ever been convicted of tax evasion in Greece. They are broke but they still want to retire at 55, having others pay for it. I recently had a driver of Greek extraction and I asked him about the situation there. He said that the Greeks who wanted to work came to the United States.
Ah, Ireland, country of the poets, the bottle and the blarney! With the Celtic Tiger we can only say that we knew you when you were puffed up in your glory and pints of Guinness cost 5 Euros. I think that we can say that a country that has been poor since St. Patrick drove the snakes out and quickly becomes rich – really rich – will soon come crashing down. It was nice while it lasted. I wish that Frank McCourt was still alive to spin the tale, though we cannot begrudge (as Frank would say) Lewis his propers.
Why a trip to Germany? Aren’t they the only ones with money? The ones that the Greeks and the Irish and the Spaniards pay homage to? Well, yes but someone had to make the mistake of investing in Iceland and Ireland and ….
I was feeling both sorry for these countries but with a certain Schadenfreude because after all our financial problems we didn’t seem nearly as bad as Iceland, Ireland or Greece. But then Lewis sucker-punched me. He took me on trip to California and at first it seemed nice: he bikes with Schwarzenegger! We learn from Arnold that partisanship is now so extreme and our problems so great — that we are screwed. In this case, I believe him
The Mayor of San Jose put it this way: because we lived near people who were rich, we thought we were rich too.
Loved the book.