Berkeley and The Big Short

Berkeleyside has already written about Hollywood’s interest in Berkeley author Michael Lewis’ latest bestseller, The Big Short (go to a local bookstore and buy it rather than clicking to Amazon). It’s a great and compelling read which I highly recommend, but one thing I was not prepared for is the strong Berkeley angle in the book.

Lewis’ book is structured around the absorbing stories of the handful of people who defied the financial zeitgeist and not only decided that the nation’s housing bubble was going to burst, but found ways to bet large sums of money on that probability. Three of those iconoclasts started in Berkeley:

Every new business is inherently implausible, but Jamie Mai and Charlie Ledley’s idea, in early 2003, for a money management firm bordered on the absurd: a pair of thirty-year-old men with a Schwab account containing $110,000 occupy a shed in the back of a friend’s house in Berkeley, California, and dub themselves Cornwall Capital Management.

Mai and Ledley are eventually joined by Ben Hockett, who “might be the only person in Berkeley looking for arbitrage opportunities in the market for credit derivatives”. Hockett meets Mai walking his dog and eventually joins Cornwall (dubbed “Cornhole” by the Wall Street stuck-ups who end up forking over many, many millions to Mai, Ledley and Hockett).

So go read the book, both to enjoy the Berkeley connection but also to sit for a few hours open-mouthed at the blindness and collective insanity of Wall Street and at the peculiar nature of the minds and personalities that can go their own way when everyone else is laughing at them. Sounds like a Berkeley story in more ways than one.