In The Big Short written by Michael Lewis, the 2008 financial crisis is explored. We see how the housing market crash occurred and we meet the men that knew it would happen. Throughout the book we follow a few of these men, like Steve Eisman, Greg Lippmann, and Michael Burry. These three men were involved in finance and understood the issues within the housing market and bet against it to make a profit off it. The actions of these men highlight the greediness and dangers of the housing market.
In class we’ve learned about many concepts that relate to The Big Short. For example, foreclosure is an important concept in the book that is also extremely relevant to our class. Foreclosure can be defined as the process of forcing someone out of their home because they cannot afford to pay their mortgage. This occurred in The Big Short when the housing market crashed. When the crash happened many people were unable to pay their mortgages and were kicked out of their homes. Another concept that is both relevant and important is credit. Credit can be defined as borrowing money with the intent of paying it back. This concept was relevant in The Big Short because many people were unable to give back the money they borrowed for their mortgages. Trust was also a major concept discussed in class and in The Big Short. Trust is the belief in the reliability of someone or something. In the book people had trust in the housing market. They believed they could buy their homes and pay off their mortgages without being kicked from their homes.
The images of the “Human Landscapes in SW Florida” relate to concepts in The Big Short and the concepts we learned about in class. These images go hand in hand with the course concepts discussed previously such as foreclosure, credit, and trust. In these images we see many plots of land that were supposed to become housing developments, but ultimately did not because those who bought the land could not keep up the payments. This relates to foreclosure because the state of Florida seized the land from those who owned it. This relates to The Big Short because many people were also foreclosed on because they could not keep up with the payments necessary for owning their home. These images also relate to credit because money was borrowed to build housing developments and it could not be paid back because those who invested in the housing developments went bankrupt. This was a major concept in the book. The amount of people or businesses that borrowed money and were unable to pay it back was high. Another concept that intersects with the images of Florida housing is trust. In a lot of these images a housing development was started and never finished. This is because those building the developments had trust in the housing market. They believed they could afford to build these homes and have people occupy them, but they could not. This also relates to The Big Short because of all the people who had trust in the housing market and then were unable to keep up with their necessary payments.
In class we have explored concepts such as foreclosure, credit, and trust. These concepts were extremely relevant to the book we read, The Big Short. In this book we read about the horrors of the 2008 housing market crash. We saw the pure greediness of those involved in the market crash. It shows that you cannot trust big corporations to treat you in good faith. They are focused on their own personal gain and they are not reliable. It is important to understand the main themes in The Big Short so that we can avoid something like the housing market crash from happening again.