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Boomerang: Travels in the New Third World

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I admit to being a fan of Michael Lewis' books, so take that into consideration as you read this review. Lewis earned a masters degree in economics from the London School of Economics and went to work as a bond trader for Salomon Brothers before its scandals. His education and investment experience qualified him to write "Liar's Poker" in 1989, though I have no idea what qualified him to write such an entertaining and lucid description of the Wall Street culture of that time. Subsequently, I have read Lewis' "Moneyball" (in 2003), "The Blind Side" (in 2006), and "The Big Short" (in 2010). All of these books are very easy to read and hard to put down. They tell well-researched, interesting stories. In the case of "The Big Short" it helps to illuminate the origins of the financial crisis that broke starting in 2007.

In Lewis' latest book, "Boomerang," the subtitle is, "Travels in the New Third World." Lewis is not referring to Asian or Latin American countries here. He's talking about European countries that drank the elixir of seemingly endless and cheap credit prior to the bursting of the recent financial bubble. To say that cheap credit transformed the economies in Greece, Ireland and Iceland, for example, is to understate the impact of the financial bubble on these countries. Talk about a timely book--I am writing this during September 2011, and yet this book refers to the recent downgrade of U.S. debt, which occured only last month, beginning on page 171.

As in many of Lewis' books, there's a new person who you probably never heard of before to meet. In "Moneyball" it was Billy Beane, the general manager of the Oakland Athletics baseball team, and in "The Big Short" it was Steve Eisman, Michael Burry and others. This time it's Kyle Bass, the manager of a Dallas-based hedge fund, who Lewis makes sound both very insightful and eccentric. What would you call a man who owns a 40,000 square foot ranch located on thousands of acres in the middle of nowhere with its own water supply and an arsenal of automatic weapons? Or someone who would recommend "guns and gold" for his mother? Anyway, the gist of Bass' financial analysis is that mountains of shaky debt (arising from borrowings during 2002 - 2006 by people who couldn't repay) was essentially transferred from private institutions (like banks, etc.) to various governments, to the point that eventually markets would question the credibility of these governments. Put differently, the public debt of certain countries wasn't just the official public debt, but also that which came from supporting various private institutions.

Bass, Lewis tells us, visited Harvard professor Ken Rogoff (coauthor of "This Time is Different: Eight Centuries of Financial Folly," which I recommend), and found even Rogoff to be surprised by the magnitude of the public debt problems. Just as Bass bought credit default swaps on subprime mortgages prior to the financial crisis, Bass later bought credit default swaps on Greek government bonds, because he was convinced that Greece would be one of the first countries to experience real problems. Bass expected the swaps he purchased for 1,100 per year per million to eventually be worth 700,000.

Anyway, Lewis interviewed Bass years ago in preparation for writing "The Big Short," but he "left Kyle Bass on the cutting room floor." Lewis returned to Dallas two and a half years later, this time to find that Bass was betting most heavily against Japan and France at the time. Bass also had literally bought 20 million U.S. nickels (don't ask how), because he said the value of the metals in each nickel was worth 6.8 cents. The majority of this book is devoted to Lewis' travels in Iceland, Greece, Ireland and Germany, and to his discoveries during his travels. To get a flavor for the book and Lewis' writing style, here are some of Lewis' passages, in his own words:

Iceland: "Iceland instantly became the only nation on earth that Americans could point to and say, `Well, at least we didn't do that!'"

Greece: "As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was to turn their government into a pinata stuffed with fantastic sums and give as many citizens as possible a whack at it."

Ireland: "But while the Icelandic male used foreign money to conquer foreign places--trophy companies in Britain, chunks of Scandinavia--the Irish male used foreign money to conquer Ireland. Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do was buy Ireland. From each other."

Germany: "Either Germans must agree to integrate Europe fiscally, so that Germany and Greece bear the same relationship to each other as, say, Indiana and Mississippi (the tax dollars of ordinary Germans would go into a common coffer and be used to pay for the lifestyles of ordinary Greeks) or the Greeks (and probably, eventually, every non-German) must introduce `structural reforms,' a euphemism for magically and radically transforming themselves into a people as efficient and productive as the Germans."

Quoting Lewis quote UCLA neuroscientist Peter Whybrow in the book's last chapter (on California's financial problems, not European countries), Lewis writes, "'Human beings are wandering around with brains that are fabulously limited. We've got the core of the average lizard.' Wrapped around this reptilian core is a mammalian layer (associated with maternal concern and social interaction), and around that is wrapped a third layer, which enables feats of memory and the capacity for abstract thought. 'The only problem is our passions are still driven by the lizard core.' Even a person on a diet who sensibly avoids coming face-to-face with a piece of chocolate cake will find it hard to control himself if the chocolate cake somehow finds him. Every pastry chef in America understands this, and now nueroscience does, too. 'In that moment the value of eating the chocolate cake exceeds the value of the diet. We cannot think down the road when we are faced with the chocolate cake.' ... Everywhere you turn you see Americans sacrifice their long-term interests for a short-term reward."

Love him or not, Michael Lewis is a talented writer, and I truly believe that most readers will have a hard time putting this book down. If you have enjoyed his earlier books, the decision to purchase this one seems to be a no-brainer. If you haven't read one of his earlier books, this one is worthy of your consideration.

The entire book with the exception of a short introduction is available for free online. I knew the book was based off articles in Vanity Fair, but I did not realize that there was no new content. I just wanted to warn anyone that subscribes to VF that they are paying for the content twice if they purchase this book.If you feel like saving money, you can find the articles that comprise the book on VF's website.

Update: Since I wrote this review, VF has placed the Iceland article behind their pay wall. You can still find it for free by searching for "Vanity Fair Iceland." All other articles can be found for free on VF's website; just search for "Michael Lewis Vanity Fair" and then click on the index of his articles.

This book is basically just a collection of 5 pieces done for vanity fair and available for free on their homepage.
While the articles are great i read all the original ones and somehow expected more content for my money.

I like Mr. Lewis' books. I admire his entertaining style and his insight, and I read all his new books. His series of articles on the European crisis is a must for everyone, and exceptionally well written. But I had already paid for this content TWO times.

For example, take his first essay, "The Wall Street On Tundra".

I bought a Vanity Fair's issue (April 2009) where it was first published. And it is difficult to buy this magazine in Europe.
Then in September 2010 I paid for this article as part of "The Great Hangover: 21 Tales of the New Recession from the Pages of Vanity Fair" by Harper Perennial. Fair enough.

And then in October 2011 I found this book, "Boomerang", on Amazon and I thought, this is the extended and revised version of the text I liked so much, I should buy this. But this was the very same article, without any changes.

It is normal for a journalist to sell his article two times, for a magazine and for a book. But repackaging the content for a second book in a year is too much for me. Mr. Lewis could have extended this text, he could have described subsequent events or at least he could have edited this article in order to make it more readable (why should I automatically understand that the phrase "On February 3" means "On February 3, 2009", because this was first published in 2009? Or maybe I should because I already have read this two times). A month's work would have make this book worth paying for, more interesting and more up to date. Instead, two and a half years after it was first published, I mistakingly paid for the same text and got nothing new. I was disappointed.

Im a big fan of Michael Lewis books, but this was an embarrassing collection of superficial generalizations that are not more than slightly helpful to understanding the government debt crises.

I am a pretty avid reader of Michael Lewis' works. I started off with Liar's Poker and worked my way through his collection. While I find his messages to be a bit arrogant and a little too much "holier than thou" (especially The Big Short), his stories are nonetheless entertaining. I purchased a copy of Boomerang shortly after its release. After a few pages into the book, I started to feel like I had read some of these stories before. As it turns out, Mr. Lewis had just largely repackaged his latest collections of articles from Vanity Fair into a single book - Boomerang. I was pretty disappointed that now after reading most of his articles in Vanity Fair I was stuck with a book that did not go much beyond these articles. I feel that by repackaging these articles and calling it a new work, Boomerang, Mr. Lewis is only hoping to get additional mileage out of work that he has already published. The book in my opinion is a huge shame and one motivated by profit and greed. It is ironic that Mr. Lewis, always quick to point out how the greed and blinding self-interest of the actors in his accounts led to their downfall, is himself guilty of the same vice by publishing this book under the pretense of a new work. Had the prologue mentioned that these stories were prepared for his work for or in conjunction with Vanity Fair I would feel somewhat better about having purchased the book. However, no mention of this fact is included in the book.

My advice to those interested in the book. Go to the Vanity Fair website and read the articles for free and save your money. I have pasted the links below for those interested.

[...] [...] [...] [...] [...]

I read the intro and thought it was fantastic. I thought the rest of the book would be like that, but I was quickly disappointed. As you've probably seen in other reviews, the rest of the book is cut-and-paste articles from Vanity Fair. Why even put out a book?? The book publisher deserves some blame on this because they let him do it. I'm surprised Vanity Fair let him do it. After the other chapters (Iceland, Greece, Ireland and Germany), I was really ready to read the last chapter on America. What I got was a senseless description of an outing with Arnold Schwarzenegger... riding bikes, disobeying traffic rules and much of Arnold's history coming to America. What the heck was that?!?! How does that fit with the rest of the story of financial decay worldwide? Then, a bunch of discussion about police officers and firefighters suffering through the economy? I don't get it! The book ends and you are left confused... no real discussion of the economic failure of the U.S. No conclusion to wrap things up. It just ends... just like you would expect I guess if you just pasted in four magazine articles and didn't even take the time to write anything new or even wrap the book up with a conclusions chapter. This book is not worth buying. Parts of it are an entertaining and educating read - but again, it's all online in the four free Vanity Fair articles. To Lewis: This is a really cheap way to make a buck off unsuspecting buyers.

This book was not as good as Moneyball or previous books, but it is interesting if read with certain qualifications in mind. One problem was his rather eccentric approach to certain countries. For example, he used the controversial work of Alan Dundes as a prism through which to examine German culture. Alan Dundes takes a rather discredited Freudian view, which posits "anal-erotic" fixations that supposedly drive some cultures. Basically made-up Freudian ideas that no one takes seriously anymore. Although Mr. Dundes was Jewish, he offended Jews when he published a 1983 paper about Auschwitz jokes, which prompted demands that he be fired. There seems to be something of a grudge to the work of Dundes, a desire to insult, which seems prevalent in his "analysis" of German culture.

Michael Lewis references him repeatedly and that does not inspire confidence or a sense of originality. Lewis basically pathologicalizes (that is, to make it seem like an illness) the German trait of contentiousness and diligence. As fat lazy Americans, these traits may indeed strike most of us as strange! Here is a line from the article on Germany:

""Jörg Asmussen offers the first hint of an answer--in his personal behavior. He is a type familiar in Germany but absolutely freakish in Greece--or for that matter the United States: a keenly intelligent, highly ambitious civil servant who has no other desire but to serve his country. His sparkling curriculum vitae is missing a line that would be found on the résumés of men in his position most anywhere else in the world--the line where he leaves government service for Goldman Sachs to cash out. When I asked another prominent German civil servant why he hadn't taken time out of public service to make his fortune working for some bank, the way every American civil servant who is anywhere near finance seems to want to do, his expression changed to alarm. "But I could never do this," he said. "It would be illoyal!""

Needless to say, we no longer find people like that in the US, so perhaps loyal, hardworking people who serve their country do seem bizarre to us, but one suspects it is not some strange German obsession that needs to be explained, but rather the grotesquerie of the average lazy irresponsible Greek or American. You also see how German children have been guilted since birth for being "evil", for WWII. It is rather disturbing to think of innocent kids treated that way.

The writing is very good, as always, and entertaining. As someone mentioned, you can get most of the articles online for free.

Instead of reading the articles in Vanity Fair, I bought the book and found it a completely comfortable ride through the the countryside of some unbelievable places. You don't get any detailed view of things, sort of like having lightning flashes as you ride along, but the scenes are startling and make you reflect in ways that I would have wanted Lewis to do. Instead you just see his grotesque mask - like smile reflected in the windows. His analyses are fun, but misleadingly shallow. These three countries' slide into bankruptcy - Iceland, Ireland, Greekland - are amazing stories that seem completely unreal, even science fiction at times; but Lewis provides no real understanding for what went on and what will happen in the future. AS he points out, Germany seems the key to which direction the bailout of Greece will take, and whether or not the international economy will take another post-Lehman-like dive; but instead of giving us the real dirt on Germany's intentions, he diverts us with entertaining but highly irrelevant side trip into their fascination with feces and coprophilia. After all, what really distinguishes the fleissig hard working Germans from the Greek and Irish seems to have more to do with their determined trust and cooperation with each other, more like the other scandinavians, than with prurient coprophilia. How did they become so trusting - was it the utter devastation of WWII and the enormous hangover of guilt from the Nazi era? What taught them to be so rulebound that they demand ubiquitous order in all things?Was it the utter devastation and disorder of the black market?
The book raises many such psychological national mysteries but offers few plausible suggestions for any resolution: why do the Irish pay off their international debt in full when they could easily have defaulted with many fewer downside consequences? Why in heavens' name would Icelandic fisherman think they are good investment speculators? It seems so improbable! Lewis has a good time in a monastery and I guess it sheds some light on the cavalier attitude Greeks have to taxes and government corruption; but the central story is the Greek government as a corrupt enterprise, lying to the EU about its debt and intentions; and conniving with wall street firms to hide the debt (at great additional cost) from the EU. Again, Lewis' excursion into a greek monastery hides the story in fluff and display lighting.
So, kudos to Lewis for making these bizarre state actions publicly accessible; but a few humbugs too, for such shallow, patronizing and seductive analyses

I've read all of Michael Lewis's books, and this one is astonishing.

As ever, the financial/economic analysis is spot on, and the author has an unerring knack for seeing through swirls of events and extracting the few watershed ones that lead to fateful developments. His description of the one decision that led to the Irish meltdown, for instance, is vintage Lewis.

But whatever happened to Michael Lewis? His comments on the countries he visits seem often gratuitously downputting, sometimes outright bigoted, and unwarranted. How did this manuscript go through without major editing? According to the author, most Icelanders are quote mousy-haired and lumpy unquote (well, I spent a week there, and from what I saw that's just a totally random description), the Greeks are all jaundiced and worse, we're treated to several astonishing, recurrent pages expounding forth as to how the Germans are deeply obsessed with human faeces (I lived in Germany for a couple of years and I can reassure you, this is utter random nonsense), somewhere he met with an official who happened to be trim and hairless and we're treated to several pages of how all 'fit white men who shave their heads' think and are and behave and what personal mantra they should have or not have. Did I pay good money to read such nonsense? Unbeknownst to us, was the author all along really a bigoted, provincial boeotian? Does the author believe he advances his own reputation with such fare? Totally puzzling. I'm still scratching my head.