Boomerang Review Plus California and Bust
By Michael Lewis
Michael Lewis is a contributing editor at Vanity Fair magazine, but he also has written books on the economy. As of recently he has written a book called Boomerang which talks about some of the European debt crisis. Lewis has also written an article on Sept. 29, 2011 for Vanity Fair magazine called California and Bust. This article was written about former California governor Arnold Schwarzenegger, and how the state of California was once crated by Schwarzenegger. Now California has economy has changed since Schwarzenegger left the governor’s office.
Boomerang has had great reviews since its release in early 2011. Michiko Kakutani of The New York Times work on article published on September 26, 2011 called ‘’Touring the Ruins of the Old Economy’’ about Lewis’s book. ‘’ Michael Lewis possesses the rare storyteller’s ability to make virtually any subject both lucid and compelling. In his new book, “Boomerang,” he actually makes topics like European sovereign debt, the International Monetary Fund and the European Central Bank not only comprehensible but also fascinating — even, or especially, to readers who rarely open the business pages or watch CNBC. The book could not be more timely given the worries about Europe’s deepening debt crisis and the recent warning issued by Christine Lagarde, managing director of the I.M.F, that “the current economic situation is entering a dangerous phase.”
"Combining his easy familiarity with finance and the talents of a travel writer, Mr. Lewis sets off in these pages to give the reader a guided tour through some of the disparate places hard hit by the fiscal tsunami of 2008, like Greece, Iceland and Ireland, tracing how very different people for very different reasons gorged on the cheap credit available in the prelude to that disaster. The book — based on articles Mr. Lewis wrote for Vanity Fair magazine — is a companion piece of sorts to “The Big Short: Inside the Doomsday Machine,” his bestselling 2010 book about the fiscal crisis. Like that earlier book its focus is narrow. It doesn’t aspire to provide a broad overview of the debt crisis but instead hands the reader a small but sparkling prism by which to view the problem, this time from a global perspective.''
"In the course of “Boomerang” Mr. Lewis introduces us to other, “disturbingly prescient” people, like Morgan Kelly, a professor of economics at University College Dublin, who began noticing in 2006 that something seemed seriously out of whack with the Irish housing market. He also foresaw the collapse of Irish banks, which had lent staggering amounts of money to property developers during the Irish real estate bubble.''
"Among the other intriguing individuals in this volume there’s Stefan Alfsson, an Icelandic fisherman who in 2005 quit fishing and joined the stream of young people becoming bankers, setting himself up as “an adviser to companies on currency risk hedging” — without a day of training. And there are some canny Greek monks who built a vast real estate empire that set off a scandal that Mr. Lewis says helped bring down the government of Prime Minister Kostas Karamanlis in October 2009. When a new government took over, it “found so much less money in the government’s coffers than it had expected that it decided there was no choice but to come clean”; those revelations panicked investors, and the new higher interest rates the country was forced to pay, Mr. Lewis says, “left the country — which needed to borrow vast sums to fund its operations — more or less bankrupt.''
"Mr. Lewis’s ability to find people who can see what is obvious to others only in retrospect or who somehow embody something larger going on in the financial world is uncanny. And in this book he weaves their stories into a sharp-edged narrative that leaves readers with a visceral understanding of the fiscal recklessness that lies behind today’s headlines about Europe’s growing debt problems and the risk of contagion they now pose to the world.'' (Kakutani)
Michiko Kakutani of The New York Times puts a lot emphasizes on Lewis’s craft as a writer in the book called Boomerang. Lewis explains what the problem is in Europe, and how it affects the rest of the world. Lewis gives the reader an understanding about the debt problems in Europe, and explains it really well with his ability of knowledge of the subject. Lewis even knows how to quote people, and put into perspective for his readers. Lewis writes for an international audience who understand the European debt problems.
Michael Lewis shows his craft even more in Vanity Fair. Lewis writes in the business and political sections. Lewis diffidently shows any reader his knowledge and research on any article he writes. In California and Bust, Lewis suggests a ‘’fiscal Armageddon’’ is coming to America. Are Americans really ‘’conditioned to grab as much as they could without thinking about the long-term consequences?’’Lewis also uses this story and compares it to what is happening in Europe. Lewis grabs the reader’s attention by publishing a picture of Schwarzenegger oh his bike. Most people still like the former governor, and will read anything about him along with a visual picture even the article is not all about Schwarzenegger.
"On August 5, 2011, moments after the U.S. government watched a rating agency lower its credit rating for the first time in American history, the market for U.S. Treasury bonds soared. Four days later, the interest rates paid by the U.S. government on its new 10-year bonds were plummeting on their way to record lows. The price of gold rose right alongside the price of U.S. Treasury bonds, but the prices of virtually all stocks and other bonds in rich Western countries went into a free fall. The net effect of a major U.S. rating agency’s saying that the U.S. government was less likely than before to repay its debts was to lower the cost of borrowing for the U.S. government and to raise it for everyone else. This told you a lot of what you needed to know about the ability of the U.S. government to live beyond its means: it had, for the moment, a blank check. The shakier the United States government appeared, up to some faraway point, the more cheaply it would be able to borrow. It wasn’t exposed yet to the same vicious cycle that threatened the financial life of European countries: a moment of doubt leads to higher borrowing costs, which leads to greater doubt and even higher borrowing costs, and so on until you become Greece. The fear that the United States might actually not pay back the money it had borrowed was still unreal.''
"On December 14, 2010, the television news program 60 Minutes aired a 14-minute piece about U.S. state and local finances. Correspondent Steve Kroft interviewed a private Wall Street analyst named Meredith Whitney, who, back in 2007, had gone from being obscure to famous when she correctly suggested that Citigroup’s losses in U.S. subprime bonds were far bigger than anyone imagined, and predicted the bank would be forced to cut its dividend. The 60 Minutes segment noted that U.S. state and local governments faced a collective annual deficit of roughly half a trillion dollars, adding that another trillion-dollar gap existed between what the governments owed retired workers and the money they had on hand to pay them. Whitney pointed out that even these numbers were unreliable, and probably optimistic, as the states did a poor job of providing information about their finances to the public. New Jersey governor Chris Christie concurred with her and added, “At this point, if it’s worse, what’s the difference?” The bill owed by American states to retired American workers was so large that it couldn’t be paid, whatever the amount. At the end of the piece, Kroft asked Whitney what she thought about the ability and willingness of the American states to repay their debts. She didn’t see a real risk that the states would default, because the states had the ability to push their problems down to counties and cities. But at these lower levels of government, where American life was lived, she thought there would be serious problems. “You could see 50 to a hundred sizable defaults, [maybe] more,” she said. A minute later Kroft returned to her to ask when people should start worrying about a crisis in local finances. “It’ll be something to worry about within the next 12 months,” she said.’’(Lewis)
Michael Lewis is good reporter because he knows what he talking about. He knows how to use quotes, has knowledge of the subject, and knows how to give his opinion by not making the reader feel stupid. Lewis makes people aware of what is going on in his writing, and he does not go off on tangent of about this what needs to be done. Lewis is more of an informal writer because he gives you the news by being bias, and acknowledging that the debt problems will not be changed overnight. Instead, he offers his opinion and advice to what could happen in the future of American and European debt problems.
