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on October 21, 2010
Michael Perino presents the definitive account of a chapter of our national history that has too quickly receded from our collective memory. In 1933, four years after the Great Crash, although "banksters" of Wall Street were decried for their arrogance and deceit throughout America, the politicians in Congress seemed poised to capitulate to the perennial Wall Street argument that "finance was just too complicated to delegate to the democratic process." The implicit invitation from Wall Street: Just trust us. We know what we are doing. We are essential to the American economy. Leave all regulation to us. The math is just too hard, the vocabulary just too arcane, the stakes just too high. If that sounds familiar, it should: the argument has been made at every juncture where the regulation of finance is at stake.

Perino gives us the account of how that entire system of thinking--for one of the first, and frankly, one of the last times in our nation's history--was dumped on its head by the scrappy former District Attorney, Ferdinand Pecora. In the span of just ten days, with only a few weeks' preparation, this lawyer--no finance whiz--revealed in plain terms the extent of the deceit that created the deluge of participation by Moms and Pops throughout the country in the nation's securities markets. Rather than people going simply crazy for the thrills of market speculation, many of those who lost their savings in the stock market were duped into participation by slick, persistent salesmen armed with outright lies about the reliability of the securities they peddled. Perino's presentation of some of the letters written to Pecora during this investigation is particularly harrowing.

Many others have commented, at length, about the parallels between the aftermath of the Financial Crisis of 2009 and the aftermath of the Great Depression. But what this book does is remind us not just of parallels--and there are many--but also the power of a single individual to change the tenor of an entire political discourse. In Perino's masterful hands--this is one of the most lucidly written, capaciously researched, and entertainingly presented books to come out in financial history in the past decade--we see the sheer power that one individual can exert against seemingly impossible odds.

This book will be interesting and engaging to historical buffs, those interested in finance, and, quite frankly, any Scott Turrow or John Grisham fans. The second half especially unfolds as a courtroom drama, with twists and turns that will surprise you, even though you know the end result from reading the introduction. And besides, at just a few hundred pages, it is a remarkably slim volume for so much information. I'd give it six stars if I were able.
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on November 5, 2010
A famous "someone" once said, "Those who do not know history are condemned to repeat it". That is certainly true of the financial situation today.

The Hellhound of Wall Street is a very well written and penetrating look at one set of congressional hearings held in 1933, examining the role of National City Bank (now CitiBank) and its president Charles E. Mitchell, in the cause of the 1929 crash and its aftermath. It tells the tale using the story of the fantastic lawyer who did the research and asked all the right questions in order to expose what was subsequently called the "banksters" role in manipulating stocks, bonds, and the public without the least hint of moral or ethical considerations.

The echoes it sends down to today are chilling, in that it proves that the government, and the people, never seem to learn. We expect business to police its own activities to create a fair and functioning free market. Great expectations are rarely met.

When did we lose having lawyers conduct congressional hearings, and leave it up to 5 minutes of questioning each by unknowledgeable and ill prepared politicians. If the right questions aren't asked, how can we get the right answers?

I highly recommend this timely and riveting read.
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on October 25, 2010
Michael Perino's meticulous research takes us back to 1933, as if it was our current financial crises. His keen detail and presentation of the story keeps the reader so informed of the important aspects of the country's financial and banking crises it is hard to put the book down. I'm looking forward to the big screen version (but only if Perino writes the screenplay) as well as his next book.
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on November 4, 2010
The Hellhound of Wall Street is masterful account of how an unlikely attorney, Ferdinand Pecora, a Sicilian born immigrant, took over a faltering 1933 Senate investigation and turned it around to expose how the malfeasance and practices of the Wall Street elite was a major causal factor of the 1929 depression. The Pecora hearings laid the groundwork for the enactment of the New Deal's security and banking laws designed to regulate the uncontrolled practices in the banking and securities arenas. Indeed, The Hellhound of Wall Street by Michael Perino is a prologue of major abuses in our financial markets over the past decade that have adversely impacted the current state of our economy - new games and new tricks.
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on February 5, 2011
The Hellhound of Wall Street, Michael Perino

Michael Perino is a Professor at St. John's University School of Law who testified before Congress and consulted with the SEC. In March 1933 the USA was in the Great Depression. One in four families lost their life savings from thousands of bank failures. Unemployment was at 25%, industrial production was half of what it was in 1929. Farm incomes had been dropping since 1921. People were ill-fed and ill-housed. The Stock Exchange closed on March 3, 1933 (`Introduction'). FDR planned to attack the Great Depression; he blamed Wall Street for their swindles that impoverished the nation. Ferdinand Pecora had just finished the Senate hearings that exposed Wall Street's looting of investors (p.4). It led to "strict supervision of all banking and credits and investments". Pecora's investigation and the scandals aroused public opinion for reform (p.5). Charles Mitchell the banker pioneered the sale of stocks and bonds to middle-class investors (p.6). Pecora's investigation revealed National City Bank sold worthless bonds and manipulated stock prices to benefit insiders. [Does this remind you of the High-Tech stock scams of the 1990s and Collateralized Mortgage Obligations of the 2000s?]

`Part I' discusses the financial and political background. [Perino may not understand how traders can drive down a stock (p.16). Richard Ney's "The Wall Street Gang" explains.] Chapter 2 is a biography of Ferdinand Pecora. Chapter 3 explains the workings of Senator Norbeck's committee. [Note the misjudgments of the `NY Times' in these chapters.] Norbeck chose Pecora as the investigator for the time remaining (Chapter 4). Investors were swindled by selling them over-priced stock (p.71). Newspapers were paid to print misleading advice. [Does this still go on?] National City Bank was one of the largest banks that sold to the middle-class (Chapter 5). Predictions about a bright future led some to sell out before the crash (p.86). Did 59 bankers and industrialists actually rule the US (p.86)? Finally, Pecora was able to review the minute books for all board meetings (Chapter 6). Chapter 7 lists the economic problems and bank failures of that time. People lost their life savings (p.116). "Nearly everyone paid for nearly everything with checks" (p.116)? [No proof for this statement; most people paid by cash.]

`Part II' has ten chapters, one for each day of the hearings. At the beginning the big banks had a reputation for "unimpeachable integrity" (Chapter 8). Yet many people lost their savings by investing with National City Bank (p.135). They were advised to sell government bonds and buy bank stock. When this couldn't bo sold they lost all. Senator James Couzens wanted higher taxes on the super-rich (p.138) and warned Coolidge about the coming disaster in 1928 (p.140). The "management fund" provided an incentive for excessive risk taking (p.143). The overhead of their sales offices was enormous and led to risky deals (p.144). Mitchell sold his company's stock to lower his income tax (p.154). [This contradicted his image.] Mitchell sold new shares and used the money to eliminate its Cuban sugar debt (p.160). Small investors were sold out to benefit insiders (p.168). Employees were charged $200 for shares worth $40 or less (p.169). A bank which is affiliated with an investment company cannot give unselfish advice (p.184). The bank had violated the law for years (p.203)! A government record was eliminated (p.204). This explains why banks should not deal in securities (p.206). The government would have to regulate Wall Street (p.211).

Chapter 12 tells about life in 1933. People had no cash to buy food so it rotted in railroad cars (p.213). People literally starved to death. Were the "reckless, inappropriate, and imprudent actions" responsible for the state of the economy (p.221)? American banks sold billions of foreign bonds which became worthless (Chapter 13). The State Department was part of this scam (p.232). Foreign governments were made to accept loans (p.233)! "A massive fraud"? Their "long history of political instability and debt defaults" was ignored (p.235). A loan to Brazil was used to pay off debts to National City Co. (Chapter 14). Internal documents pointed to problems (p.250). One investor testified about his losses (p.254). There were other exposes of business practices (Chapter 15). Was the Stock Exchange "a glorified gambling casino" where the odds were rigged against its customers (p.269)? [It still is.] The last day revealed how National City kept a lucrative investment for its insiders so they could earn a 50% profit (p.274). The banking crisis continued (Chapter 16). The NY Stock Exchange and the Chicago Board of Trade shut down (p.277). When FDR became president he reappointed Pecora as counsel (`Epilogue') The investigation continued. [In the 1990s the Glass-Steagal act was nullified (p.290), and another Great Depression returned after similar looting of investors.]

Could a banker's strike end new stock offerings? Could a banker short his company's stock for profit? The Securities Exchange Act of 1934 brought regulation and restrictions on stock manipulations. Senator Peter Norbeck had tried to pass farm relief laws but FDR succeeded (p.295). Richard Whitney was convicted of embezzlement (p.296). [Self-regulation didn't work for him.] Pecora was elected a judge on the NY Supreme Court (p.302), and the President of the National Lawyer's Guild. In 1966 he fought to keep the New York City Civilian Complaint Review Board. Pages 303-304 tell of the good he accomplished.
This book tells how the low income of most people and their swindling led to the Great Depression. The Stock Market crash of 1929 did not cause the Great Depression, rather the latter caused the former once they ran out of investors to keep buying stocks.
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on October 18, 2012
This is a very well written and documented presentation of the Senatorial hearings regarding the bank failures of the 1930's. Ferdinand Pecora is an unlikely character who systematically dismantles the lies and the fraudulent actions of the biggest and best known bankers of the time in only ten days of testimony. His investigation and cross-examination of the leaders in the banking community manages to not only expose their inherent greed, but also the manner in which the public was financially manipulated to pay for the bankers' mistakes. Pecora's work is credited with galvanizing the reforms of banking laws designed to protect the public (the Glass-Steagall Act). What makes this book so timely is knowing that those laws were systematically dismantled in the 1990's, and it is widely believed that their demise was a causal factor for the financial crises of 2005-2008.
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on May 6, 2014
This book gives a detailed description of how Wall Street was rigged by the bankers and how they were then taken down by elected politicians willing to go after them.

The depravity of the bankers is revealed in the Senate hearings led by Ferdinand Pecora. We see how a man with exceptional skills fences off the lame and conniving responses of the bankers who brought this country down to its knees in 1929.

The baloney the bankers tell the Senate House investigation committee is hilarious, yet also pathetic; moreover, the system is still rigged today, because the same mentality exists among the bankers, but not in the elected politicians who, after the Crash of 2008, lack the willingness to go after them in full force. The motto now is: Too big to fail. Too big to Jail.
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on July 21, 2015
I usually love books like this - stories about business scandals - but this one just didn't do it for me. While I understand the historical significance of the so-called "Pecora Hearings," I was disappointed; frankly, the book failed to hold my interest - and at the very least was not the gripping read that I expected.

Mr. Perino clearly did a ton of research for the book. However, he seems to have been intent to include as many of the details his research uncovered as was possible. He constantly digresses from the nominal subject of the book to talk about the history of the markets, details of several of the protagonists' lives, and so on. That might be acceptable if their lives were interesting, but in many respects they are not. Another major failing of the book is that Perino feels compelled to tell us what the various people were thinking; however, since he can't really know that, he has lots of statements along the lines of "he must have been thinking of...". That doesn't make persuasive reading either.

If he had simply let the testimony speak for itself, I think the book might have been far more engrossing than it was. I am really inclined to drop this review to two stars, but I'll give the author the benefit of the doubt.
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on October 31, 2011
This book should be made into a movie to enlighten the public as to what is possible when there is a political will. The fact that there has been no prosecutions of any significance and clearly no significant legislative oversight of the 08 financial collapse is all the more reason the publicize Pecora's story. For the life of me I can't figure out why this book hasn't won some awards or at least been publicized more widely. Just one of the best financial histories I have ever read.
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on October 18, 2014
If you want a better idea of what went wrong in 1929, what needed to be done, who made it happen and how the Glass-steigall act was created then this is a good book to help fill you in.

The parallels between today and 1929 are uncanny: Bankers paying themselves huge salaries and insisting that they don't need more regulation because they're acting ethically (Mitchell).

Congress failing to act because they've either been bought by the industry or possibly just because they've failed ot investigate any detail with enough attention to realise that the banks haven't been working in our best interests? ie. Absence of evidence makes it hard to act?

The failure of industry, loss of savings and increase in unemployment due to predatory banking practises.

...and lack of disclosure.

1929 set up the conditions for a separation of banking between commercial and non-commercial.
The commercial banks were allowed to speculate... and allowed to fail if they stuffed up.
The non-commercial banks had a much higher duty of care to depositors and thus were less likely to lose money.

Today those distinctions don't exist any more... and the banks are risking depositors money in risky speculative derivative trading.

Both now and then when things go wrong banks are asking the government to bail them out.

Those who fail to learn from the past are doomed to repeat it? Santanyana

This book demonstrates that it only takes one man to make a difference (Pecora)... and that lawyers who work only for money are not the right people to address issues of systemic corruption. The implication is that many of those who were set to resolve the problems were in fact part of the problem... and this was why it took an outsider (Italian/protestant) to catalyse change.

Even more importantly it identifies that it only took 6 weeks to uncover this corruption. This should give hope to the many who think that the only way achieve change is with violent revolution? The pen is truly mightier than the sword? ...but only if you're willing to do the hard yards? It is obvious from this book that in a paper war you have to be willing to read the paperwork? Pecora was. Surprisingly it appears he was the only one who was? It did help that he had the necessary power to ensure the paperwork was delivered.

This is a good book for those who wish to learn from the past. Todays speculative environment seems eerily like that of 1929 and the inertia of the regulators gives you a sense of deja vu?

Slightly better editing would have made it even more engaging. It's an interesting story so no danger of falling asleep.

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