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"Courage to Act" by Ben S. Bernanke
Rich with detail of the decision-making process in Washington and indelible portraits of the major players, "The Courage to Act" recounts and explains the worst financial crisis and economic slump in America since the Great Depression, providing an insider’s account of the policy response.
A business book that is as riveting as an adventure novel... a masterpiece Huffington Post When the financial crisis of this decade is being taught in business schools, All the Devils Are Here could be the textbook. Time Grand in scope, overwhelming in detail, this is as compelling as a well-crafted literary novel USA Today Yields a rich and intricate tableau of understanding Financial Times A thorough account of the origins of the financial crisis. Helps explain the most troubling headlines of the moment, as well as those that are certain to come. New York Times Joe Nocera is the best business writer alive Jim Cramer
--This text refers to the Paperback edition.
About the Author
Bethany McLean and Peter Elkind are Fortune senior writers. McLean, a former investment banking analyst for Goldman Sachs, lives in New York City. Her March 2001 article in Fortune, "Is Enron Overpriced?," was the first in a national publication to openly question the company's dealings.
I thought it would take a couple of decades of perspective to tell the full story of the crisis. Meanwhile Michael Hirsh's Capital Offense (which covered the story from Washington), along with The Big Short by Michael Lewis (focusing on a few offbeat portfolio managers), Justin Fox's The Myth of the Rational Market (which went deep into intellectual history and gave testimony from many of the people who invented the theories), The Quants by Scott Patterson (working from the equations out) and Glenn Yago and Franklin Allen's Financing the Future (which traced the story from prehistory into the future and emphasized the positive side of financial innovation as much as the negative side) were the best available accounts. All had stylish writing, great stories and thorough research to cover important aspects of events.
Without taking anything away from any of those books, All the Devils are Here manages to cover every important financial aspect of the crisis. To be fair, it doesn't go into as much history or theory as Justin Fox, Michael Hirsh or Yago and Allen did, and it's not as great a story as Michael Lewis and Scott Patterson extracted.Read more ›
"All the Devils are Here" is a very ambitious book that attempts to weave together a wide range of narratives into a single story that explains the financial crisis. In general, I think the book does a very good job of taking on this challenge, but there is no way to get around the fact that it is a complex undertaking. The book takes a full 8 pages just to list the "cast of characters."
The story begins with the invention of mortgage-backed securities in the late 1970s and traces the founding and evolution of Fannie Mae and Freddy Mac. We learn about innovations in risk management and derivatives at JP Morgan and how they created the first credit default swaps and then later lured AIG into the game. Also covered are greed and mortgage fraud at Ameriquest and the failure of the ratings agencies to do anything close to an adequate job. There is also a lot of material on internal politics at Wall Street firms and especially how the risk management process at Merrill Lynch was undermined. Much of the story has been written about extensively elsewhere, for example how the Greenspan/Rubin/Summers trio pushed back against regulation of derivatives.
While "All the Devils are Here" offers one of the broadest takes on the financial crisis, I think it still fails to address one of the "devils" -- or perhaps even the elephant in the room. The book focuses entirely on the financial sector and misses the larger, structural shift that has occurred in the overall U.S. economy. That shift has been driven primarily by globalization and technology and the result has been stagnant incomes for the vast majority of people while a tiny few have seen their incomes explode.Read more ›
Wall Street seems to float in an ether above Main Street, ubiquitous but at the same time untouchable. So translating the fog behind the 2008 financial crisis into language everyone can understand is a daunting task. In their new book, veteran journalists Bethany McLean and Joel Nocera slam dunk this difficult project.
The authors turn CDOs into something that makes sense, CEOs into the fallible humans they are, and even transform the government into a place readers can picture. The result is a book not only on the causes of the financial crisis, but commentary on corruption, systemic hubris, and human nature itself.
Granted, not all the players in the financial crisis are covered, making this book a supplement to existing (and worthy) tomes on Lehman Bros., Bear Stearns and others. What McLean and Nocera do cover, they line with such thorough detail that I learned reams of important new facts about the crisis.
Note that the book covers media whipping boys like Goldman Sachs and AIG in a more nuanced light. This helps business-minded readers understand how leadership and company culture contributed to the firms' post-crisis fates.
One of the book's most valuable contributions, besides its coverage of Fannie and Freddie, was Roland Arnall's Ameriquest. This corrupt company, heavy on cheating and cocaine, was one of the dirtiest players in the financial game. Yet the media and government-which ended up giving Arnall a post as US ambassador-continue to overlook it.
It's easy to say "systemic hubris," but much harder to describe what that looks like in real life. McLean and Nocera do this well.Read more ›