Customer Reviews

And Then the Roof Caved In: How Wall Street's Greed and Stupidity Brought Capitalism to Its Knees

5 star:		(35)
4 star:		(10)
3 star:		(4)
2 star:		(2)
1 star:		(19)

 

 

David Faber's new book, "And The The Roof Caved In," hit The New York Times best seller list for the first time this week. It debuted at an impressive #10.

I enjoyed the book. It's an easy read which, given the subject -- the credit and financial crises -- is not an easy thing to do. Given that his day job is a reporter for CNBC, Faber gets credit for not pulling too many punches when it comes to Wall Street. My guess is that the book's subtitle, How Wall Street's Greed And Stupidity Brought Capitalism To Its Knees, gave some of Faber's CNBC colleagues and the people he reports on a serious case of heartburn.

But saying I enjoyed Faber's book and recommending it to others are two different things. The book is based on a 90 minute program -- "House of Cards" -- CNBC first aired in February. The book reads like a TV script (try to imagine Faber doing the voice over with the text of his book) with short chapters that appear to mimic the segments in the show. The still pictures in the book are from the program. And while the book does goes into more detail on some subjects than the program (after all, it doesn't have moving pictures to tell stories), it's still largely at TV-audience depth, that is to say at or just slightly below the surface.

I watched "House of Cards" again after reading the book and reconfirmed my initial thought that, instead of buying the book, you'd learn just about as much by watching it for free on Hulu or paying $4.99 to download it on iTunes. It's good TV and well worth the 90 minutes it will take to watch in it's entirety.

If you prefer reading to watching, try William Cohan's "House of Cards" --same title as the CNBC program but much richer content.

As someone who experienced the mortgage securitization mania, and the rise of credit default swaps while at Lehman Brothers during the first half of the decade, I found this book to be an excellent post mortem on the "what and why" of the housing debacle and recession. It is not intended to be a scholarly tome, but instead a straightforward explanation of the easy money and loose lending times, including what broke down, how all of the parties (including home buyers, mortgage brokers, Wall St, the rating agencies, and the Government) acted in their own self interest to create the worst economic crisis since the Great Depression. I would recommend this book to anyone who wants to understand exactly how we got into the mess we're currently in, and how disingenuous our lawmakers are when they point fingers at everyone involved except themselves.

There are other books on the market that explain the series of events that led our country into the mess that we are in. I found this book to be a very accurate representation of what really happened. Wall Street had an unbelievable appetite for mortgage-backed securities. As a result, banks and mortgage companies did what Wall Street wanted - they delivered it to them even if it meant making loans to people who could not repay. But what did they care, they were just passing the problem to someone else. This economic crisis was fueled by greed and stupidity.

This is a great book for those who are looking for answers about how we found ourselves in the economic crisis.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

This book offers a very good global look at the causes and effects of the recent problems in the home mortgage industry. It describes the incredible money flows through the industry and the equally incredible laxity of underwriting. Interview material with a subprime customer, a mortgage broker, an investment banker involved in securitization, a short seller, and a purchaser of a huge amount of toxic securities adds reality to the discussion. One of the strongest points of the book is the very lucent discussion of the money flows, including the ultimate purchasers of the securities. It also discusses the reasons that the banks took such enormous losses when they were supposedly selling off their risk. The book answered many questions for me.

I didn't see the tv show. I liked how the book was laid out and how it explained what actually happened and why. It was very enlightening and entertaining to me.

David Faber has researched extensively the (recent) history of the excesses of otherwise reputable Banks and Securities Firm in this work. Anybody who wants to know why it all fell apart so disastrously will appreciate the facts and the unveiling of the inanities of greed of Wall Street and AIG, selling to and acting in the name of "investors." 'Wall Street' began to take on ever-increasing debt and leverage. The outcome is sadly proof enough!

K. Eric Lundquist

David Faber has written an excellent history of the financial collapse of 2007-2008 and beyond. He does a yeoman's job of wrangling difficult facts and virtually impossible-to-understand financial instruments into a comprehensible story, explaining the economic insanity through individuals who occupy the various roles. He answers the main question most people have about this mess ("Why would banks lend money to people they KNEW could not pay it back?") and along the way debunks the most popular but incorrect answer ("The government forced them to with the Community Reinvestment Act and subsequent regulation.") Faber specifically explains why that explanation is not accurate, and then explains the even more unbelievable truth of why this occurred.

This book should be a great starting point for anyone who is caught in the aftermath wondering what happened. By the time you finish it, you will be conversant in the entire topic, and ready to tackle more arcane explanations with the vocabulary and big-picture items firmly understood.

One editorial note: Either Mr. Faber or his editors (or both) consistently misuse the word "comprise" and its various forms, and the book consistently uses "insure" when it should use "ensure" (which is particularly confusing in the context of a discussion of insurance products). But these small nits aside, the book is a terrific one-day read, well worth the price of admission.

I think that everyone would benefit from reading this book because just about everyone is confused about what occurred to make the entire country take such a horific stumble.
The author cuts through the political agendas and assorted bs surrounding the situation we find ourselves in and just gives us the facts in a plain English manner. He tells the story for what it is; sorry if you cann't handle the truth. Even this may be inadequate for many to grasp because the direct causes of losses to the players is highly technical and fooled even the creators of the transactions that crushed so many.
This book would be the one to read first, then follow with selections from the many others that are more broadly focused and less successful at describing the causes to our situation.

David Faber uses personal stories (photos included, he is a TV person after all) to explain the basics of this economic collapse. Like many other books on this subject this one also makes it clear that this great collapse could not have occurred if numerous parts of the economic system (critical institutions and key people) had not done the wrong thing at the wrong time (for greed or not to lose market share to the greedy).
The title of the book places most of the blame on Wall street, but inside the book the blame seems to shift more to the one person who could have popped the bubble, Alan Greenspan. Allen Greenspan "... didn't fully appreciate the nature of the risk." (page 169).
However, earlier in the book the author seems to provide Dr. Greenspan with an excuse by writing in effect that: "September Eleventh caused the Fed Chairman to engineer low interest rates and thus save the subprime business from oblivion" (oblivion at that time would have stopped the cancer at an early stage). And as for Fannie and Freddie, Mr. Faber classifies them as "Enablers". "Fannie and Freddie did not promulgate the current crisis. Wall Street did." (the degradation of standards at financial rating agencies is considered here, I assume, to be part of Wall Street activity).
David Faber does seem to suggest that the severity of this painful economic collapse could have been at least minimized if politically powerful people like Barney Frank were fanatical fiscal conservatives and not the opposite.

Faber, a well-known financial industry journalist, chronicles the inevitable crash of Wall Street, from the immigrant agricultural worker who gets a mortgage he can't understand, to the guy that wants to sell it to him, to the guy on Wall Street that packages that loan and turns it into a complex financial instrument that even those in Washington are still trying to understand. Whether you are in the financial industry or not, this book is an amazing narrative of the last 8 years in our country's history that is immensely gripping and compelling. Faber's ability to render the human side of this story, whether it be from a family who is losing their house, or the hedge fund manager who tries to warn the industry, or the chairman of the federal reserve, Alan Greenspan, on whose watch the debacle occurred, or Stan O'Neill, who played golf while Rome burned, makes for an unforgettable story of a time none of us is likely to forget.