BOOK OF THE DAY: The Big ShortBy Michael Lewis Allen Lane, 265pp, £25

BY THE time Lehman Brothers imploded in September 2008, the queue of people who claimed to have seen Wall Street's subprime crisis coming could have wound around the island of Manhattan three times over. In The Big Short, reformed financier and Vanity Faircontributing editor Michael Lewis sorts the real geniuses from the hindsight-assisted media merchants.

This is the intriguing story of the prescient minds who bet their houses that the subprime investment market was not really a market at all, but a Ponzi scheme perpetuated by investment bankers who were deluded, ignorant, fraudulent or all of the above.

Lewis introduces us to a cast of characters united by a conviction that the subprime lending boom was based on mathematical fallacies – a conviction that was not terribly popular back in 2005. “Shorting” subprime bonds, ie betting against them and their many spin-off variants, was their route to riches.

The most singular of Lewis’s short men is Dr Michael Burry, an outsider in every sense of the word: a California-based doctor more interested in studying than practising medicine; a man set apart from Wall Street’s hierarchies by geography and by personality.

Not long after Burry diagnoses the terminal instability in the subprime investment market, he self-diagnoses Asperger’s syndrome. Burry and Lewis agree that only someone with an Asperger’s-like tendency to gorge on arcane detail would have read the turgid prospectus for a subprime bond.

The next most interesting cast member is Steve Eisman, one step closer to Wall Street than Burry but just as immune to its bullish groupthink on housing markets. Eisman’s defining characteristic is his bluntness, which includes a penchant for telling the most hubristic subprime enthusiasts that they’re going to lose every cent.

Lewis's cast is rounded out by three young upstarts who make millions by going short with little more than a Bloomberg trading monitor and a copy of You Can Be a Stock Market Genius.

All of his protagonists purport to share real anger at the growing realisation that the trillion-dollar game in which they are participating is unsustainably corrupt. Being proven right is presented as an even bigger motivation than getting rich.

Here, Lewis gives them the benefit of the doubt somewhat, portraying their short bets as a moral crusade against the investment bankers and their dupes (the credit ratings agencies), rather than just a smarter kind of greed.

The Big Shortis Lewis's follow-up to his bestseller, Liar's Poker, an unflattering account of 1980s Wall Street excess. This new book explores the peculiarities of Wall Street's recent self-destruction: the impotence of the chief executives who knew little and understood even less of what their traders were doing; the amnesia of the investment bankers who rigged the rules of the game and then became the "suckers" who played it.

When the banks blow up, The Big Short'sheroes are forced to abandon their David v Goliath personas, as it is effectively US taxpayers, not the investment bankers, who pay out on their bets. Sure, everyone who was right about the stupidity of the subprime market gets both vindication and cash, but for Lewis and his readers, the absurdity of the story is that everyone who was entirely wrong made millions too.

Laura Slattery is an

Irish Times

journalist