Boomerang

Lewis calls it financial-disaster tourism. Having told the story of the American subprime bust in The Big Short, he went abroad for Vanity Fair to see what the same flood of cheap credit had done elsewhere. His premise is that easy money let each society indulge its particular temptations. Icelanders wanted to stop fishing and become investment bankers; the Germans, careful savers at home, became the buyers of last resort for Wall Street's worst bonds. The last chapter returns to the United States, where state and municipal pensions and budgets look like the next shoe to drop.

Reviewers were largely admiring. Kyle Smith in Forbes called Lewis the leading journalist of his generation, and the New York Times review praised him for making the IMF, the European Central Bank and sovereign debt both clear and absorbing. The method has limits. These are magazine pieces lightly stitched together, and Lewis leans on national stereotypes for comedy, which can feel glib.

For readers of the eurozone crisis, it remains a quick, vivid companion to drier accounts, and a reminder that a credit boom ends in a fiscal crisis when governments take on bank losses.

1. Cheap credit reveals character. The same flood of money produced different disasters in each country, shaped by local habits, institutions and temptations.
2. Bank debt becomes sovereign debt. When governments guarantee failing banks, as Ireland did, private losses become public ones and a banking crisis turns into a fiscal crisis.
3. Tax compliance is a trust problem. Greece's deficits reflected a society where widespread evasion made everyone assume everyone else was cheating, which no single reform could fix.
4. Watch the buyers of last resort. Conservative German institutions loaded up on complex American mortgage securities, a reminder that sophisticated-looking buyers can be the least informed.
5. Municipal finance is next. Unfunded pensions and public budgets in places like California and Vallejo show the bubble's costs reaching local governments.

The book opens and closes in the United States, with four European case studies in between, each first published in Vanity Fair.

1. The biggest short. Lewis revisits Kyle Bass, who had bet against subprime mortgages and now argued that governments which had absorbed their banks' losses would themselves be unable to pay.
2. Iceland. A nation of about 300,000 people turns itself into a hedge fund. Its three big banks grow from a few billion dollars in assets in 2003 to more than $140 billion before collapsing in October 2008.
3. Greece. In Athens and at the Vatopaidi monastery on Mount Athos, whose land deals helped bring down a government, Lewis finds tax evasion, padded public payrolls and fudged accounts, and a society in which no one trusts anyone else.
4. Ireland. A property boom financed by banks such as Anglo Irish ends with the government guaranteeing the banks' debts and passing tens of billions of euros of losses to taxpayers.
5. Germany. In Hamburg and Dusseldorf, Lewis explores why Germany, the eurozone's paymaster, was also home to banks that bought Wall Street's worst subprime securities.
6. California. Back home, Arnold Schwarzenegger explains the state's budget paralysis, and in San Jose and bankrupt Vallejo, Lewis sees how pension promises are breaking city budgets.

The tsunami of cheap credit that rolled across the planet between 2002 and 2008 was more than a simple financial phenomenon: it was temptation, offering entire societies the chance to reveal aspects of their characters they could not normally afford to indulge.

Icelanders wanted to stop fishing and become investment bankers. The Greeks wanted to turn their country into a pinata stuffed with cash and allow as many citizens as possible to take a whack at it. The Germans wanted to be even more German; the Irish wanted to stop being Irish.

Michael Lewis's investigation of bubbles beyond our shores is so brilliantly, sadly hilarious that it leads the American reader to a comfortable complacency.