Another throw of the boomerang

There are not many books about finance that make me laugh out loud on the train, and, heaven knows, it’s not an inherently amusing subject at the moment. But Michael Lewis has written another superb book about the distinctive madness of financial markets. In

his specific subject is the Euro debt crisis, a follow-up to
, which covered the US sub-prime crisis.

Who knows, maybe he’s on his way already to China to talk to the minority of clear-eyed sceptics who can see the impending implosion of its real estate and banking bubble – one bit of this global debacle yet to unravel is the (downwards) revaluation of all those US assets the Chinese have bought since the turn of the millennium. For the Lewis approach is to take an outsider’s perspective on a part of the financial world in order to reveal just how weird events prove to be when you’re not completely immersed in them. The sideways light puts all the peculiarities in sharp relief. This has worked for Lewis since his first book, the brilliant

, which he wrote from the point of view of an ingenue in the newly deregulated late 1980s bond markets.

Lewis also has an eye for the extraordinarily revealing fact or example of behaviour which has somehow been overlooked in mainstream analysis. For example, in the context of a received wisdom that Greeks have been profligate and idle spendthrifts living beyond their means while Germans have been hard-working and cautious, it is useful to be reminded that the German Landesbanken were some of the most enthusiastic and stupid participants in sub-prime lending and the writing of CDS insurance for securitized mortgages. Oh, and people in Iceland believe firmly in elves, and no construction project can go ahead until the ground has been certified elf-free. Who knew?

Boomerang has some flaws, the main one an excess of national stereotyping for comic effect. It doesn’t work in all chapters, particularly the German one. Mostly I still laughed. It’s better than despair, especially when you fully expect another sequel.

[amazon_image id=”1846144841″ link=”true” target=”_blank” size=”medium” ]Boomerang: The Meltdown Tour[/amazon_image]