496 of 513 people found the following review helpful
5.0 out of 5 stars I thought it would take at least a decade for a book this good
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...
Published on November 16, 2010 by Aaron C. Brown
181 of 200 people found the following review helpful
3.0 out of 5 stars Good but fails to assess blame
This is the story of how the financial meltdown came about. It begins at the beginning and continues until the end. It is a carefully constructed chronicle of the systemic greed and hubris, clueless shortsightedness and incompetence that brought the U.S. financial system to its knees. Although well written, and reads like a novel, it still is not an easy read and in the...
Published on November 18, 2010 by Herbert L Calhoun
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24 of 29 people found the following review helpful
5.0 out of 5 stars The Best!,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)All The Devils Are Here is by far the best book on the financial crisis. It details the history of what led to this crisis in an understandable and interesting manner. I suggest that everyone read this book. Once again, Bethany McLean demonstrates why she is America's top business journalist.
14 of 16 people found the following review helpful
5.0 out of 5 stars I love that these guys wrote this book,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)This book is exactly what we needed. Real people doing actual researching and telling us the truth about the financial crisis. Why it happened, who did it and the ultimate reveal that this mess was totally engineered to make a few even more wealthy.
Jon Stewart did a great interview with these two. Check it out at [...]
6 of 6 people found the following review helpful
5.0 out of 5 stars Historical Masterpiece !!!,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)I am an english major with a law degree and have read my share of books in my lifetime. I can say without any hesitation that this book should be read by every American, whether your flag swings to the right or left, that is interested in knowing what happened leading up to the crash of 2008.
This book takes the reader from the mid 1970's through to 2008 with an easy to comprehend depiction of all the players and key events that culminated in the the bursting of the real estate/stock market bubble. I have read many other works and listened to other reports about the cause of the current recession. Almost every account suffers from the same shortcoming. Namely the cause of the 2008 crash is usually depicted as caused by a relatively recent and isolated course of events and the blame is largely put on one entity such as the federal government, the big banks or Fannie Mae.
"All the Devils Are Here" on the other hand deftly explains how many entities contributed to the crash of 2008, from the federal government to Fannie Mae to the securities ratings agencies to the Wall Street superpowers like Goldman Sachs. This book furthermore explains how the creation of the massive volume of subprime loan portfolios, collateralized debt obligations and credit default swamps never could have been possible absent the synergistic cooperation of all these key players together.
Finally, this book points out how for decades there had been many individuals who shouted from rooftops warning of the toxic nature of this Frankenstine-like financial machine. However each and every one of these individuals calling for beefed up regulation and transparency were swiftly and summarily put down, usually by the intoxicating rhetoric of the Chicagoan school of economics led by Alan Greenspan and his "committee to save the world".
I would absolutely recommend this book to anybody interested in taking their head out of the sand and figuring out what exactly happened during one of the most important chapters of American and world history.
28 of 36 people found the following review helpful
5.0 out of 5 stars Please Stop Rating Based on the Kindle Price,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)As of this date, every review that rates this book at one star is based solely on the pricing of the Kindle version of this book. I'm not here to defend the pricing. What I do believe is that if you don't like the Kindle price, don't buy it. Vote with your money.
But, please don't trash up the rating system by rating the book at one star. Those who look at ratings and reviews are interested in knowing what those who have read the book have to say about how good or bad the book is. When you use the rating system to vent your anger at amazon, that is a disservice to others that shop at amazon.
11 of 13 people found the following review helpful
5.0 out of 5 stars Fantastic book - couldn't put it down.,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)This is an excellent book. It reads fast, but delivers lots of technical details without burying the personal stories. It's the story of how many seemingly reasonable decisions made over 30 years eventually created a monster. A monster that nobody really understood until it was far too late. Sure, there were smart opportunists with questionable ethics that were all too happy to pick up the pieces at the end, but it took millions of people all around the world to build the house of cards.
When I finished, I thought to myself, "there's going to be a book just like this one written about the health insurance industry someday."
9 of 11 people found the following review helpful
5.0 out of 5 stars Very Accessible,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)I have basically no experience with finance, real estate or the stock market. When the housing mania was going on, a friend of mine paid roughly half a million dollars for what was essentially a trailer home. To my mind this made no sense, but everywhere people were taking out similar mortgages. Why would any bank agree to it? Clearly there is no way that trailer is worth that much money... Oh, well, not my world, so I didn't care - until the near total economic collapse. Then I tried to understand what was going on. How did the system undermine itself? I thought I understood it pretty well, until I read this book.
This book explains the events that led up to the economic crisis. It characterizes the people involved, their motivations and their aspirations. It explains the financial products, the finagling, the regulations and the laws in a way that is very accessible to people that are unfamiliar with the field.
My only complaint is that there are a lot of unnamed and anonymous sources and quotes without references. Some parts read more like a tabloid. If you can ignore those, I think the book provides a lot of decent evidence and verifiable facts that shed a lot of light on the greed and corruption that plagued and still plagues our economic system. My feeling is that we are destined to repeat the events of 2008 only next time its going to be much worse.
4 of 4 people found the following review helpful
3.0 out of 5 stars A solid history of the Financial Crisis,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)McLean and Nocera do a really nice job reviewing the many facets that lead to an overheated housing market of the early 2000s. The authors touch on the involvement of Government Sponsored Entities, Fannie Mae and Freddie Mac, Congress, public financial regulators, fly-by-night subprime lenders, ratings agencies, and of course Wall Street firms involved in creating derivatives of mortgage-backed securities. A heavy emphasis is focused on the power and persuasion held by Fannie, the empire building of Countrywide Financial and CEO Angelo Mozillo, and a unique comparison of how Goldman Sachs reacted differently to a boom in Collateralized Debt Obligations from other firms (particularly in contrast to AIG and Merrill Lynch) in order to escape relatively unscathed, at least from a balance sheet perspective. Bear Stearns and Lehman Brothers are briefly discussed as well.
I thought the authors did a good job keeping the book relatively politically neutral. The thesis goes that there was plenty of blame to pass around, so being equally critical of the Clinton Administration's increased home ownership goes hand-in-hand Greenspan's laissez-faire attitude towards market regulation. The moderate political tone helps is a plus here.
A weak point of the book, in my opinion, is that the chronology is difficult to follow at times. The task of explaining the course of events from the mid-nineties to 2007 is obviously a challenge, but jumping around from 2001 to 2005, 2006 (as the situation began to sour), and 2007 is poorly handled. Throw in the interrelation between lenders, banks, and regulators who revolve in and out of positions pretty rapidly, and the situation becomes muddled. Also, I found the explanations of a few of the internal business practices of the banks poorly explained. For the average reader, descriptions are too brief to keep up with what things like the repo market is, residuals, CDO vs MBS, liquidity requirements, etc. Of course there is a balance to be made, but with the large cast of characters involved, detailed explanation suffered. The Big Short: Inside the Doomsday Machine excelled at explaining the concepts in a lucid manner. The authors do include a list of acronyms for reference.
Overall, a solid retelling of a complex history accomplished in about 360 pages.
6 of 7 people found the following review helpful
5.0 out of 5 stars They weren't kidding about those devils!,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)I am not a financial whiz, do not have a M.B.A., or even do my own taxes. But, I had enough of listening to my friends authoritatively (or not) assign "blame" for the meltdown to one entity, person, company, industry or another. So, intrigued by the title, I purchased this book. I have to be honest, as a relative neophyte to this very complex arena, this was not an easy read for me. In fact, my copy is marked up quite a bit in the margins as I waded through what exactly what constituted a subprime loan and why these loans were financially advantageous to mortgage originators and to Wall Street. I learned about tranching, mortgage backed securities, CDOs, Freddie and Fannie, etc. These authors name (and describe in detail) all the devils and their individual and collective roles in the meltdown and how they all coalesced into one ugly storm. The authors are dispassionate and non-partisan as they address the culpability of several adminstrations to make the American dream, owning a house, a partner in this process.
In short, a difficult read for the average Joe, but well worth the time invested.
8 of 10 people found the following review helpful
5.0 out of 5 stars Hoover's Anarchical Capitalists,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)Even at 400 pages equivalent, this reads like Cliff notes on the breadth and depth of carelessly self-interested players that helped relax the rules and oversight, until we ended up with a derivatives market "valued" at $600 trillion (I think over 12 times the net worth of our country and 41 times our GDP at one point). At least that's what the Friends of the US Chamber wanted me to donate money to defend. For all that supposed value, apparently in Reich's "Big Money Economy" there seems to be a dismal Velocity of Money in the "Average Working American's economy." I'm more than happy to leave any blame placing to others, especially since so many of them started out thinking they were doing "God's Work," especially in growing home ownership to 69% (I hear Switzerland has only 22%). They seem to have lost sight of the intended benefits of that goal in a widespread opportunity to profit from everyone's unquestioning belief in a seemingly simple goal. Other books show individual parts in greater detail, but this ties so much more of the big picture together. It will help anyone that feels undue pressure from "experts" in only disjointed portions of overall problem.
Hoover always felt he was brought down by "anarchical capitalists" that didn't share the egalitarian views he thought natural to the captains of industry (and finance). How many of them are "anarchical", and where you put enough oversight and control (not so much hard and fast regulations) seems to be the question. I think any reader of this book will find it more judicious to increase the oversight at least enough to prevent such extremes in the future. The predicted rising tide has turned out to be a financial tsunami
I found the Kindle version extra valuable, in that my wife and I listened to it in text-to-speech mode while preparing Thanksgiving dinner. We were able to discuss it as it played, on our schedule. She filled in many observations from within the hews homes sales perspective that I hadn't been aware of, and which were not mentioned as prominently in the book. (Though almost all our friends in the business were what I consider more ethical, she and many friends left or were let go when it got too insane, refusing to participate when asked to go against their consciences.)
5 stars for the breadth and comprehensiveness, and no points off for leaving some details less explored, when that could have exponentially increased the length. All the important stuff is there.
To include all the other information we considered would probably take several times the 400 pages. Though I prefer shorter, this is well worth the effort to get such a broader picture of where we let our financial sector (and individual opportunists) wander off to.
3 of 3 people found the following review helpful
5.0 out of 5 stars Another Book Review by the Aleph Blog,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)Have you ever seen a complex array of dominoes standing, waiting for the first domino to be knocked over, starting a chain reaction where amazing tricks will happen? I remember seeing things like that several times on "The Tonight Show with Johnny Carson" back when I was a kid.
When the first domino is knocked over, the entire event doesn't take long to complete -- maybe a few minutes at most. But what does it take to set up the dominoes? It takes hours of time, maybe even a whole day or more. Often those setting up the dominoes leave out a few here and there, so that an accident will spoil only a limited portion of what is being set up.
Those standing dominoes are an unstable equilibrium. That is particularly true at the end, when the dominoes are added to remove the safety from having an accident.
Most books on the economic crisis focus on the dominoes falling -- it is amazing and despairing to watch the disaster unfold, as the leverage in the system is finally revealed to be unsustainable.
This book is different, in that it focuses on how the dominoes were set up. How did the leverage build up? How was safety ignored by so many?
The beauty of this book is that it takes you behind the scenes, and describes how the conditions were created that led to a huge creation of bad debts. I was a small and clumsy kid. My friends would say to me during sports, "There are mistakes, but your error was so great that it required skill."
The same was true of the present crisis. There were a lot of skillful people pursuing their own private advantage, using new financial instruments which were harmless enough on their own, but deadly as a group. So what were the great financial innovations that enabled the crisis?
Creation of Fannie and Freddie, which led to an over-issuance of mortgages.
Securitization, particularly of mortgages. This led to a separation between originators and certificateholders. (And servicers, though the book does not go into servicers much.)
Having parties that guarantee debt, whether GSEs, Guaranty Insurers, the Government, or credit default swaps [CDS]
Loosening regulations on commercial banks, investment banks and S&Ls.
Regulatory arbitrage for depository institutions.
Loose monetary policy from the Federal Reserve, together with a disdain for regulating credit. They saw Mexico and LTCM as successes, and thought that there was no crisis that could not be solved by additional liquidity.
Bad rating agency models, and competition among rating agencies to get business.
Regulators that required the use of rating agencies for capital modeling.
The broad, misinformed assumption that real estate prices only go up.
The creation of Value-at-risk, a risk management concept that has limited usefulness to true crisis management.
The creation of CDOs that did not care for much more than yield.
The development of synthetic CDOs, which allowed securitization to apply to corporate bonds, MBS, and ABS not owned by the trusts.
The creation of subprime loan structures, where are that was cared for was yield.
The creation of piggyback loans, so that people could put no money down for a home.
There are no heroes in this book, aside from tragic heroes who warned and were kicked aside in the hubris of the era. Goldman Sachs comes out better than most, because they saw the crisis coming, and protected themselves more than mot investment banks.
I learned a lot reading this book, and I have read a dozen or so crisis books. I didn't learn much from the other books. In this book, the authors interviewed hundreds of people who were integral to the crisis, and read a wide variety of sources that wrote about the crisis previously.
I found the book to be a riveting read, and I read it cover to cover. I could not change into scan mode; it was that well-written.
This is the best book on the crisis in my opinion, because it takes you behind the scenes. You will learn more from this book than any other on the crisis.
They don't get the difficulties of being a rating agency. There is the pressure to get things right over the cycle, and get it right on a timely basis. These two goals are contrary to each other, and highlighting that conflict would have enhanced the book.
Who would benefit from this book:
Anyone willing to read a longish book could benefit from this book. It is the best book on the crisis so far.
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All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean (Paperback - August 30, 2011)