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32 of 32 people found the following review helpful
5.0 out of 5 stars Ferdinand Pecora and the Repudiation of Wall Street's "You're Just Not Sophisticated Enough to Get It" Argument
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...
Published on October 21, 2010 by PCB

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0 of 1 people found the following review helpful
3.0 out of 5 stars Scholary Book
A must read for anyone interested in the origins of the Glass Steagle Act. Well written and documented! Insightful! A good read.
Published 22 months ago by Joseph Klinger


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32 of 32 people found the following review helpful
5.0 out of 5 stars Ferdinand Pecora and the Repudiation of Wall Street's "You're Just Not Sophisticated Enough to Get It" Argument, October 21, 2010
By 
PCB (Washington, DC) - See all my reviews
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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15 of 15 people found the following review helpful
5.0 out of 5 stars Wow!, November 5, 2010
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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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12 of 12 people found the following review helpful
5.0 out of 5 stars A Gripping Piece of History, October 25, 2010
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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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8 of 8 people found the following review helpful
5.0 out of 5 stars Major cause of the Great Depression, November 4, 2010
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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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6 of 6 people found the following review helpful
5.0 out of 5 stars Ten Days that Stirred the Financial World, 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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4 of 4 people found the following review helpful
5.0 out of 5 stars Reads like a thriller, educates like a masterclass, great read, November 8, 2010
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Michael Perino excels at storytelling on this great review of the ten days of the Pecora hearings. The book reads like a thriller and enlightens like a master class, on the pitfalls of self-regulating markets. The work is very timely, given the recent financial crisis and the emergence of the Tea Party and its anti-regulation rhetoric. This is a great read to ground ourselves in history, in the hopes that we can learn from past mistakes. In summary, a beautiful and inspiring story told in brilliant prose, with the right amount of drama and facts. Well done Michael!
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3 of 3 people found the following review helpful
5.0 out of 5 stars The Uses of History--Could a 7-year-old Greenspan Have Learned from the Pecora Commish.?, July 8, 2011
This review is from: The Hellhound of Wall Street: How Ferdinand Pecora's Investigation of the Great Crash Forever Changed American Finance (Hardcover)
Great piece of detailed work and writing to keep the reader sitting straight up on his/her reading chair.

And totally amazing that it took place in the lame-duck space between January, 1933 and March 3 or so, when presidents were then sworn in.

Aside from the individual accomplishments of Pecora and his tiny band of men in unseating the CEO of the then-biggest bank in the country, and an affiliated stock-"manufacturing" "one-body-but-two-heads" corporation, as Pecora called it.

At the time, the marks (ordinary US citizens) generally assumed that these Wall Street Banksters were models of "probity" and infected with an eleemosynary and fiduciary spirit--which is what City Bank advertised. (Think today of Sandy what's-his-name and Traveler's Insurance merger--same deal with Charlie "Sunshine" Mitchell -- the idea of the "one-stop" bank/insurer/broker/).

Except that that the bank gave leads to the door-to-door stock salesmen, and vice-versa, and what they flogged unflaggingly was the shares of the City Bank stock. And Mitchell took home salary and bonuses of $1.6 million when average salary--for those not on the breadlines--was maybe $2,000 to $5,000 a year. The brokers at City Bank started at $15,000. Basically, Mitchell and his pals took care of themselves first, lied or failed to disclose material adverse information about the shares they were hawking. Unregulated. Senator Glass, of Glass-Steagal was on the Banking committee where Pecora, called in like a Deus ex Machina and nearly the last possible moment, did his stuff.

It seems that Alan Greenspan was born in March, 1926, and would have been but 7 years old in march of 1933. But as voracious a reader as he's said to be, I can't imagine he didn't learn of the Great Depression and of the Banking committee hearings and subsequent regulation--because relying on the bona fides, ethics, morals of the banksters (they apparently used that word in the press of the day) Just Did Not Work.

So I wonder where Alan got his notion that he could rely on the good faith of the banksters 50, 60, 70 years later? Either he's a lot less intelligent than he's been given credit for, or is being disingenuous (or lying) about why it was that he supported giving the banksters such free reign to smash our economy, probably permanently. (The BLS reported that total "labor underutilization" (gotta love them gov. euphemisms--"detainees," "enhanced interrogation," "fixing the facts around the policy," "pictures too upsetting for Americans to see" etc.) is at 16.2% for June. It was 16.7% last June--quite an "improvement," hunh? Here's the URL for the monthly "labor underutilization" (formerly known as UNEMPLOYMENT--ain't got no job, mon). [...] Put it in a bookmark; check it the first Friday morning of each month. U-6 is "real" unemployment. U-3 is the "official" (euphemisticated) rate.

And of course Ben Bernanke has made himself an expert on the Great Depression, so he must surely know of the practices that Pecora and the Banking Committee uncovered. Wonder why he hasn't goaded Eric H. Holder into getting those guys into criminal court. I think a jury would have no difficulty in sniffing out whether there was "criminal intent" or not in the activities of these banksters (maybe bangsters, to get connote more of the gangster flavor to their operations.

Well worth the reading time. Like who-was-that-wiseman who said "Those who refuse to learn from history are dunces. Umm, are condemned to repeat it"?
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3 of 3 people found the following review helpful
5.0 out of 5 stars The More Things Change, the More They Stay the Same, February 24, 2011
By 
Jim (Illinois) - See all my reviews
This review is from: The Hellhound of Wall Street: How Ferdinand Pecora's Investigation of the Great Crash Forever Changed American Finance (Hardcover)
Author Michael Perino tells us who Ferdinand Pecora was and what he accomplished as Committee Counsel of the Senate Banking and Currency Committee during the period between FDR's election and his inauguration. The Committee under Chairman Sen. Peter Norbeck Republican from So.Dakota initiated an investigation of the causes of the Great Depression. However, the investigation floundered for more than a year without progress and a revolving door of Committee Counsels. That changed when Norbeck hired Pecora an Assistant New York City Prosecutor and experienced trial lawyer. Although Pecora was a product of Tammany Hall, his integrity and desire for recognition compelled him in two weeks of questioning to lay bare the self serving manipulations of National City Bank-at the time the US's largest bank-and its Chairman Charles Mitchell.

Pecora was a self educated Sicilian born immigrant in a period when "such a race" in newspaper parlance of the day was considered inferior. A secondary theme in the book is the public perception of Pecora based on that background.

Through a securities affiliate nominally independent, Mitchell and bank executives controlled and fostered aggressive and manipulative sales tactics of the affiliates in the selling of City Bank's own stock, that of Anaconda Copper and Boeing and of Peruvian Bonds. By paying themselves substantial bonuses and so-called "morale" loans which were never repaid, bank and affiliate employees transferred stockholders' equity to their benefit while leaving customers stuck with worthless securities and stockholders with substantial equity losses.

Perino writes of the competing political objectives of other Senators and Norbeck's persistence in the face of the Senate's initial antipathy to the Committee's work. By describing Pecora's daily questioning of Mitchell, of other City Bank executives and of Richard Whitney President of the New York Stock Exchange, the tide of opinion shifts the self dealing and the smugness of the bankers about their activities is exposed.

Pecora's work lead to indictments under the Securites Act and paved the way for the passage of the Glass-Steagall Act and the Secuties Exchange Act and the establishment of the Securities and Exchange Commission.

This is engrossing reading, and the day-by-day accounts of the Committee hearings are not dull.

The timeliness of this story is driven home when Author Perino tells us that National City Bank through mergers and name changes today is known as Citigroup...a bank taxpayers bailed out in the financial crisis of 2008. The parallels are there for us to see.
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3 of 3 people found the following review helpful
4.0 out of 5 stars How The Hellhound Outted Bankers, October 18, 2012
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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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2 of 2 people found the following review helpful
5.0 out of 5 stars HellHound. WE Need another Pecora, October 18, 2013
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Necessary Reading for anyone trying to make sense out of the current controversies about the economy, Wall Street, et al. Ferdinand Pecora was the last choice for continuing the investigation before Roosevelt took office ( in March of 1933). The Investigation was going nowhere. People were both furious and despairing. The conventional wisdom was that somebody or bodies had done something to cause the 1929 crash but nobody could prove anything. And then...........Pecora. He was the game changer. Brilliant, almost infallible memory. By the time he was finished with his interrogation of Charlie Mitchell, the reputation of Mitchell was destroyed. One of the leading Plutocrats of his day became prematurely aged because of the relentless, probing, exacting, penetrating questioning by Pecora . And all the while, Pecora was having a good time.
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