“Applies an intelligent, clinical eye to [an] excruciatingly complex corner of the financial world.” —New York Times
A classic of its kind, Frank Partnoy’s best-selling FIASCO takes readers inside the rollicking world of derivatives on Wall Street during the mid-1990s. The book tracks Partnoy’s success as a young Morgan Stanley employee who quickly becomes steeped in a culture that treats client as targets to be “blown up” or have their faces “ripped off.” A decade later FIASCO remains one of the most damning and prescient pictures of the speculative frenzies that grip Wall Street and the victims they can leave in their wake. In Partnoy’s case they include well-publicized losses at Orange County, Barings, and Procter & Gamble, among others. A new epilogue written for this edition brings Partnoy’s story—as well as the story of derivatives—up to the present.
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Editorial Reviews
Amazon.com Review
The game of Russian roulette is alive and well and living on Wall Street, where it's known as the derivatives market. In his aptly named book F.I.A.S.C.O., Frank Partnoy, a former derivatives trader at Morgan Stanley, exposes the seamier side of high-stakes finance. Derivatives are securities whose worth is determined by the value of other securities; according to Partnoy, however, the derivatives market is an elaborate illusion performed with smoke and mirrors. In fascinating, frightening detail Partnoy describes several of Morgan Stanley's slick deals that, in his eyes, are just this side of outright fraud. More than just dishonest, the bait-and-switch tactics Wall Street traders employ to rig the markets are downright dangerous, since the massive debt these deals conceal will inevitably come back to haunt the dealmakers.
F.I.A.S.C.O. could be subtitled Portrait of the Trader as a Young Man, for Frank Partnoy is indeed young, and his short tenure on Wall Street left him sadly disillusioned but much wiser. His book will leave you wiser, too--and probably very worried. --This text refers to an out of print or unavailable edition of this title.
From Library Journal
Before his recent return to practicing law, Partnoy was a derivatives salesman for the prestigious Wall Street investment bank Morgan Stanley. In simple terms, a derivative is a tricky financial instrument whose value depends on another security, such as a stock or bond. Partnoy takes us inside the complex world of high finance, deriving his title from Morgan Stanley's competitive skeet-shooting event, the Fixed Asset Annual Sporting Clays, which "set the mood for the firm's barbarous approach to its clients' increasing derivatives losses." This is a story about deceit and manipulation by fund managers wanting big bonus checks and a wake-up call to the average investor. Partnoy explains in easy language the investment alternatives used by the very wealthy to avoid paying capital gains taxes. In addition, we get an in-depth look at well-known derivative "fiascoes," namely Orange County, Procter & Gamble, and others. This fascinating book will appeal to serious investors. Recommended for all business collections.?Bellinda Wise, Nassau Community Coll. Lib., Garden City, N.Y.
Copyright 1998 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.
Copyright 1998 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.
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Most Helpful Customer Reviews
23 of 23 people found the following review helpful:
5.0 out of 5 stars
Flawed, but superb nonetheless,
By A Customer
This review is from: F.I.A.S.C.O.: Blood in the Water on Wall Street (Hardcover)
A very good introduction to derivatives (and even some general finance for novices) and one of the better looks at how degenerate Wall Street culture can be. Though comparisons are frequently made to Liar's Poker, I found FIASCO to be a more useful read, even though it's not quite as funny as Liar's Poker was at its best. The usual tales of arrested development among Wall Street's community are here, but there's a much more gripping and sobering tale of how rapacious greed knows no bounds, and how a large number of actors, including large multinationals and even governments, ultimately pay the price. Partnoy doesn't tell his story as smoothly as he could, and his narrative sometimes feels larded with anecdotes that don't add much color or relief. He also struggles at times to weigh his role in the big picture. Overall though, he describes his experiences and general Wall Street culture with enough insight that you can feel his disgust, and applaud when he eventually steps away from it all. A great business book, flaws and all, and a perfect antidote to all the puffery surrounding coverage of financial markets and Wall Street these days. Now when will we see a book of investment banker/derivatives trader jokes, to add to all the great lawyer joke books?
14 of 14 people found the following review helpful:
3.0 out of 5 stars
Derivatives sales people as conscienceless sharks,
This review is from: F.I.A.S.C.O.: Blood in the Water on Wall Street (Hardcover)
Partnoy, now a law professor at the University of San Diego, was a derivatives salesman for First Boston and then Morgan Stanley, 1993-95. In this "tell all," revenge-tinged book, he makes the crew at Morgan Stanley look like nerdy brutes without conscience, intent only on ripping off people's faces. (Their expression.) The acronym in the title stands for "Fixed Income Annual Sporting Clays Outing," during which the traders at Morgan Stanley "honed their killer instincts." Partnoy quotes his boss at Morgan Stanley as saying after some derivative losses, "There's blood in the water. Let's go kill someone," meaning, sell them risky derivatives while we cut ourselves a huge commission.Strangely readable book. The greed and money lust and the pathetic macho posturing of the derivatives sales people fascinated. The stupidity of the bankers, insurance fund managers, etc. who bought the risky and complicated derivatives concocted by the Morgan Stanley people, amazed. Partnoy himself comes across as someone who went along with the program until it got just a little too ugly and then got out. I suspect there is another side to this story.
8 of 8 people found the following review helpful:
5.0 out of 5 stars
Better than Liar's Poker,
By A Customer
This review is from: F.I.A.S.C.O.: Blood in the Water on Wall Street (Hardcover)
I am a trader working in derivatives in one of those financial firms. I thought this book was on a more detailed(complex) level than Liar's Poker. While I highly related to Liar's Poker during the earlier part(trainee/junior analyst) of my career (many similar events occured for me as well) I can now relate even more with this book (after working for four years). I think many people can have trouble with the complexities as FIASCO tries to explain in depth the structures of complex derivatives. I though that these explanations which were fascinating in showing the creativity of certain banks. This was an element missing in Liar's Poker. Also I don't think that Partnoy's main focus was that banks were just ripping off "innocent victims". There are many people in finance who are restricted from leverage (increasing risk) and willing to pay for it. If Wall Street has the monopoly on giving leverage to those who don't have legal access, they will certainly get large profits for creating those derivatives. This is a basic law of economics. I believe that the main point that Partnoy was making was the extent to which large financial institutions were disguising the risk they were taking and how Wall Street gave them the instruments to do so. It is more of a "scheme" then anything else. Anyway, I thought this book is definitely something for all traders to read (especially those in FX and fixed income).
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