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173 of 195 people found the following review helpful
on June 4, 2011
The problem with this book is not just that the author makes virtually no effort to explain why the whole financial system would have collapsed in 2008 absent huge taxpayer bailouts, other than in a few sentences in an epilogue. The problem is that throughout the book he uncritically channels the explanations for the collapse provided by the titans of Wall Street. The CEOs blame the government, the profit-seeking hedge funds and the shorts, never themselves. They come up with ludicrous justifications for billions in salaries and bonuses that fund their lavish lifestyles. You can almost hear Sorkin's pain when he describes how much the net worth of the Lehman CEO, Dick Fuld, declined, and how he has to consider selling his wife's art collection. The fact that he had redeemed hundreds of millions worth of stock ($482 million according to Fortune magazine) as his company was disintegrating around him barely gets mentioned. The accounting tricks used to prop up these paragons both to take their toxic assets temporarily off the books and to underreport the real compensation to executives go unmentioned. After reading this you also wonder what it is that these people actually do to earn these billions. Sorkin uncritically says that this money is necessary to "retain the talent." But Bank of America decided to pay $38 billion for Merrill Lynch after doing due diligence for a total of two days. Was this actually a demonstration of "talent"? The only sense you get of these people is that they're all scrappy testosterone-filled climbers from disadvantaged backgrounds who still feel a deep need to prove themselves and who also want to belong to an all-male club. Government regulators also belong to the same club; any of these CEOs can get any government official they want on the phone within a few minutes. Virtually every quote from a CEO has the "f" word somewhere in it, and women are persona non grata except for wallflower wives, who are either crying at some decision by their husbands that turns out to be brilliant (p. 40, 171), or are waiting patiently at home to stroke their egos. The two women who have anything to do with this story, Erin Callan, the Lehman CFO, and Sheila Bair, the FDIC Chairwoman, are disparaged in the meanest possible terms. Callan was a "diversity hire" (p. 112) whom Sorkin further maligns by repeating unsubstantiated rumors that she slept her way to the top. (p. 120). She "knew precious little" about her subject matter and "had no background in accounting whatsoever." (p. 29). A tax lawyer, with no background in accounting? Sure. She's ridiculed for having a framed cover story from a Conde Nast magazine on her wall; so she's also vain. Bair is similarly ridiculed as a "showboat," a "grandstander," and, worst of all in this all-male club, "not a team player." Sorkin is a talented writer, but New York Times reporters should do better than serve as propaganda mouthpieces for the ruling class that has fooled so many of us and stolen so many of our resources.
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159 of 186 people found the following review helpful
on November 18, 2009
This is an excellent book that reads like something that Dan Brown might have written. But its real. The part that amazed me was the level of detail Sorkin was able to get about behind the scenes conversations that took place. Stuff about how people such as Dick Fuld of Lehman reacted to the problems when it was becoming clear that the company was going down and he was in denial. How Paulson was reacting to things when there were no rules about what to do.

But probably the most interesting parts were how the different personalities were reacting while the ground was shifting under them. At the peak, many of the people involved were literally working 24 hours a day highlighted by a phone call made to Vikram Pandit, CEO of Citibank at 3 am telling how a deal he made at midnight for Wachovia had instead been trumped by another and that that deal had already been signed and blessed by the government. How major decisions were being made on the run and how solid institutions became institutions on the brink in a matter of hours.

The book also explains how companies like Barclays and China Investment Corporation were working behind the scenes as well how Paulson, Geithener and others in the government were scrambling to keep things from collapsing. There is a lot of Monday Morning Quarterbacking going on and some of the things these people did may not have been the best, but they pulled it off and we should all be grateful.

But there some bad guys, namely the short sellers and as usual some in congress. The book makes clear that out of control short selling added fuel to the flames that were occurring and that when we were facing this emergency some members of Congress were focused on their own butt instead of doing what was needed.

There is a huge cast in this book and its is sometimes hard to keep the people and their roles straight, but make the effort. You will be rewarded.
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301 of 357 people found the following review helpful
on December 1, 2009
The book details the events, the people and the conversations that roiled the banks in 2008. The book does not really discuss why the events happened. If you're looking to understand why these banks fell, this is not the book to read.

The book is very readable and even at 539 pages, a person can finish it quickly. Another plus is that unlike most NY Times reporters, the author keeps most of his opinions out of the story until the last 2 pages.

His opinions are:

The government allowing Lehman to go into bankruptcy was the catalyst that caused the floodgates to open. This is probably why he spends a lot of the book developing the Lehman story.

He's ambivalent about whether the government players could have prevented the collapse of the banks or even if they did the right things when they did act. But he's quite clear that more banking regulation was needed then and is needed now.

One can disagree with his opinions, but he does well to leave most of them till the end of the book.

A few criticisms:

As mentioned, he does not discuss why exactly these events happened. In the epilogue, he briefly mentions 4 events that percolated over 10 years that conspired to cause the perfect storm in 2008. But he could have spent a chapter (prologue) describing these events and how they conspired to cause the problem. Apparently he's not a banker or an academic, so maybe he didn't feel qualified to do this.

Second criticism: In a few places prior to his epilogue, he lets us know his (negative) opinion of some players. It's obvious his disdain for Chris Cox and Sheila Bair. But he's particularly vitriolic towards the Wall Street Journal editorial page. I thought that as a chronicler, the author should have omitted his opinions of these people/institutions. Except for these incidents, he does largely keeps his opinions out of the manuscript until the last few pages.

Overall, a quick read that details the players and the chronology of events. If all you need is to understand the crisis, then this book should suffice.
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42 of 49 people found the following review helpful
on December 31, 2009
Sorkin has done an admirable job of compiling a sort of play-by-play history of the recent financial crisis. He has interviewed all the key people and gives the reader a sense of how quickly events were taking place and how decision makers formulated policy as best they could in adverse circumstances.

However, the book is sorely lacking in any deep analytical insight and reads like a gossipy People Magazine version of the crisis...i.e., Dick Fuld telling his wife that "It's really over" as his eyes welled up with tears, or decriptions of tired investment bankers racing downtown to the Fed on only four hours of sleep. Relevant questions that are left unanswered might have been the following: What lead to the crisis? What does it mean to have a financial industry dominated by institutions that are "Too Big to Fail"? Should the financial industry be able to support the failure of a major institution without needing government intervention? Should the banks now be dismantled? Addressing these questions is clearly not the intention of Sorkin's book, but still, some analysis of the events would have made his book much more than a simple chronology of the daily movements of the key actors in the crisis.

Furthermore, even though the book is focused on the daily events, it is often confusing exactly what date in history to which Sorkin is referring and what the financial markets or a specific company's stock was trading on at that time. It makes me think that he is a bit too detached from the financial markets to have a good understanding of some the events that were taking place.

The book is also littered with both spelling and factual mistakes, which makes me think that Sorkin cranked out the book in not more than a thirty day stretch. Here is a sample of some obvious miskates that at least a copy editor should have caught: On page 70, "price" is spelled "pricve"; Page 310 reads "they need o be prepared"; and perhaps most embarrasing, page 85 reads "Alan Greenspan, who was to fiscal policy what Warren Buffett was to investing..." Greenspan, as Chairman of the Federal Reserve, was responsible for setting monetary policy, not fiscal policy, as the latter (tax policy and government spending) is determined by Congress. Also Buffett is still currently investing so it should probably be written as "is to investing."

In sum, its a rather disappointing book that, despite the catchy title, will probably add little value to one'e understanding of the crisis. However, if you happen to be on a beach and have just drank three cocktails, it might be just the book you're looking for.
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83 of 103 people found the following review helpful
on October 30, 2009
After reading two other well-publicized books on the real estate bubble and following market crash, I felt like I had been had. One book, primarily about Lehman, was shallow and written by an egotistical prima donna. The other was too technical and appeared to not have been edited well.
This book was written by a finanial author and is fair, thorough, and puts everything in perspective. It is well-written and flows for an easy read.
If you have any interest in financial history, this book belongs on your shelf along with other classics like When Genius Failed, Barbarians at the Gate, and the Smartest Guys in the Room. Ignore the poor ratings by those who were disappointed in the Kindle price. That is another issue.
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45 of 55 people found the following review helpful
on February 13, 2010
This was the most tedious rendition of the financial crisis I have read. I kept waiting for insight as to why Lehman was so vulnerable, and why Merrill "was next" to go, and why AIG was so poorly financed. What happened to make these firms so insolvent? You'll have to look elsewhere for what happened to make these firms collapse. If you like soap operas here is more than 500 pages of "he said, she said"
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26 of 31 people found the following review helpful
on February 1, 2010
This is Woodward-style reporting that re-creates dialogue verbatim, skims along the surface of events, and yet virtually never addresses what it means, how we got here, and where we should go from here. Rather than any depth of inquiry, what the reader gets is descriptions of the maneuverings of extremely arrogant and rich men as if they were celebrities in show business. Moreover, the book largely assumes that the reader understands the mechanisms of banks, the FED, the FDIC, the SEC, and the Dept. of Treasury. At least for me, this reflects a pathetic lack of intelligence and nerve that hides behind journalistic artifice. It is a superficial, timid, and insider view of one of the most colossal failures in both business and policy of modern times.

The failings of this books are legion. First, the author offers virtually no overview of the institutions, preferring to explain them off the cuff, so the reader gets no sense of context or how they might work. Second, the financial instruments (derivatives, mortgage securitization, etc.) are also explained inadvertently, adding to the confusion that non-specialists feel, and many acronyms remain unexplained. Third, the author completely fails to cover the role of the rating agencies and how they became as corrupted as Arthur Andersen did, trying to play with the big boys. Fourth, the author gives little explanation of the policy instruments, regulations, and other tools available to policy-makers. Fifth, the author assumes that the reader understands how the players feel and see things - I was confused innumerable times when he labelled some incident "humiliating", or someone became a "laughing stock", or some other emotion that appeared abruptly and without context.

Thus, I can only assume the author wrote for businessmen who know all about these issues already, who wanted a blow-by-blow chronology of every obscure remedy and tactic that was considered, i.e. every little negotiation or ploy or hope or merger plan. It is boring and incomprehensible - what they would mean is glossed over. Now, I write about businesses for a living and I wanted basic explanations, but found virtually none. It was tremendously frustrating, given that the book is almost 600 pages!

So far as I could tell, beyond the particular mechanisms themselves, the crisis arose because: 1) by ideological preference, regulation was lax and unenforced, which 2) enabled bankers to aggressively develop techniques that provided fees (i.e. short-term profit) while increasing the liquidity of normally illiquid assets like mortgages; 3) these instruments, buttressed by AIG insurance, flowed so easily that the major institutions became intertwined so that they were all dependent on eachother as if the legs of a massive house of cards (creating only the illusion of reducing risk with "free market" mechanisms); 4) mortgages and credit were so loose that many homeowners lived way dangerously beyond their means. Once the real estate market cooled (i.e. house prices began to fall, bursting a speculative bubble), the entire system began to teeter. To remedy this, the only thing that the government could fall back upon was hasty dealmaking (mergers, sales, etc.) and injections of liquidity to prevent insolvencies that would cause the entire system to collapse. We came very close to a collapse that would have dwarfed the Great Depression.

I can only imagine how a better journalist with some intellectual and emotional depth - say, a Halberstam - would have written about this as a morality tale that also explains the context and institutions and practices more clearly. Afterall, the entire direction of modern capitalism is in question and we may be at the most important crossroad of this generation. Terrible mistakes were made at taxpayer expense, we didn't learn from past mistakes, and now the firms are showering bonuses on the players with the presumption that all is again well. Etc.

I cannot recommend this book. WHile I found some useful items in it, most of it can be skimmed for the handful of valuable nuggets that are sparely scattered throughout the book. It is an unbearably mediocre performance.
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171 of 220 people found the following review helpful
on December 8, 2009
You will like this book if:

(1) You quickly grab the magazine People out of a stack that includes the WSJ and Economist.

(2) You like the way children's books have a purely linear plot trajectory without the bothersome nuance or multilayers of say an Iago character.

(3) You really think that despite the press reporting that the little time left in W's administration made it impossible for Paulson to accomplish much as Treasury Secretary (2006 to the end), Paulson took up the challenge of doing something big (see pg. 43 "Nothing could have played more effectively to his [Paulson's] immediate sense of buyer's remorse [on becoming Treasury Sec.]--and motivate him to overcome the challenge."). Really? Paulson decided "I'll show 'em" and set in motion the financial collapse? That isn't even what the author intended but that is what the page says.


I actually really expected and wanted to like this book. I was shocked at how bad it was. It is obvious the author is more interested in political connections and market timing of the book than actual reporting (with Fuld as the primary source).

Maybe the mystery of complex derivatives clouds what's wrong with this book, so here is a simple thought experiment that explains it. Imagine you wanted to learn about the Exxon Valdez oil spill in Prince William Sound in 1989. You pick up a book written by a reporter for the New York Times who interviewed everyone involved in the spill. You have the following basic questions: Was Prince William Sound ecologically pristine or already spoiled prior to the spill? Was Prince William Sound considered a tricky run for tankers? What actions did the captain of the Valdez take immediately before it ran aground? Did Exxon prepare a risk assessment for this run? Did Exxon discuss double-hulled tankers specifically for this run to prevent oil spills? Did BP, Shell, or Chevron run tankers through this same run without incident? Is there a company that has always avoided spills?

Sticking with this thought experiment, about fifty pages into the book you realize the author has passed by these basic questions. Instead, the book merely interlaces into the post-spill chronology trivial facts such as: what the lighthouse officer who took the emergency call from the Valdez ate the night before the spill, what the captain of the Valdez claimed was the biggest marlin he caught off the coast of South America, or what the Exxon executive who was sent to Alaska to manage PR said he shot in 18 holes of golf at Torrey Pines the day before the spill (there is about 1 per page in "Too Big to Fail"). The book then spends its remaining pages on this linear post-spill chronology of Exxon officers meeting with government officials. These conversations focus on how best to clean up the spilled oil. An epilogue does gloss over, untied to any actual reporting, what might have contributed to the spill. You are left wondering why you bothered to read the book.


With so much media glittering about, and much of it worth paying attention to, it stinks to get fooled by poor quality media. The lesson is that nonfiction books in print for only a few months are rarely harshly reviewed. A hopeful note is that these Amazon customer reviews of Dan Brown's latest fiction did seem to outpace any planted 5-star reviews. And a New York Times op-ed contributor wasn't afraid to hammer Brown on that book in the Book Review. But it is less likely to occur with nonfiction. If you are still reading these comments, I hope you save yourself from reading "Too Big to Fail" because it makes no attempt to analyze: What caused this financial crisis? What actions did these CEOs take before the crisis? How extraordinary were these responses to the crisis and how did they diverge from prior responses? Can future crises be avoided? What was different about JP Morgan, Chase, and Co.?

Seriously, how hard would it be for a financial reporter to sit down with the financial records of all the major banks and investment banks and put together a mortgage-backed derivatives exposure graph for each company that shows where JP diverged? The post-crisis stock values of JP (JPM) and Citi (C) suggest this information is available in the public domain. Thus, the only plausible explanation for why the book avoids these questions is the author's lack of financial acumen. In view of this problem, the People magazine style reveals itself to be not just expedient but obligatory.

The resulting storyline is simply, "Paulson said 'we are going to do...' and then the CEO responded '...'" without the context of: What caused the crisis?; How extraordinary was that response by Paulson in the context of prior crises?; Is Paulson's response likely to be successful 5 years from now?; Is another crisis likely? Without any effort to analyze these larger and more basic questions, the storyline is indistinguishable from a children's book.

The lack of reporting in "Too Big to Fail" mirrors the lack of real worth in the pure arbitrage of mortgages. I defy anyone to post something they read in this book that was new information that changed their view of the cause of this financial crisis. Assuming no one is able to cite anything new, defenders of the book are left to claim it as a behind the scenes account of the events. How useful is that information when the important question is why some financial institutions were deemed in late 2008 too big to fail? I don't think a behind the scenes storyline adds anything to the larger and more basic question of what exactly makes an institution too big to fail.

Maybe it is asking too much, but could a reporter with good sources and good analysis of empirical data show mathematically what line exactly in the sand Paulson and Bernanke committed our financial system to uphold as too big to fail? Then, using that mathematical model the even more interesting question becomes: would any Great Depression era financial institutions even have been deemed that big, ie, too big to fail, had Paulson and Bernanke applied that mathematical formula to the Great Depression? Restated, does the present top-heavy nature of our financial institutions (which might be even more pronounced than during the Great Depression) make the system indistinguishable from a state-run system and mean too big to fail is with us for good and antitrust laws should break up these institutions, or does the empirical analysis reveal something else? Those are the questions that I hoped a New York Times reporter would dig into, but the gulf between this book and those questions is: too big to describe.

A final thought, did anyone ever suggest to Paulson or Bernanke a less than dollar for dollar bailout -- the recent Greek "haircut" bailout showed how this could be used, but why didn't Sorkin devote even a page to this question?
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16 of 19 people found the following review helpful
on December 9, 2009
GREAT RESEARCH: Sorkin deserves a lot of praise for the countless hours of interviews and information gathering he had to go through. It is well researched and provides a blow by blow account of how the CEOs of Wall Street, along with Paulson and Geithner, went through a gut-wrenching few months of 2008 in the heat of the crisis.

WHAT THE BOOK ISN'T: This is NOT a book that will teach you about the origins of the crisis. It also does not explain in adequate detail why exactly the investment banks fell into dire straits and how they managed or failed to save themselves. I got the sense that Sorkin didn't fully understand (or didn't want to bother with) the details of repo markets, CDOs, mortgage-backed securities, and trading practices among the investment banks - all of which are critical to an in-depth understanding of what happened. This is not a financial/economic history book.

WHAT THE BOOK IS: The book is, however, a dramatic play-by-play of the wheeling and dealing that occurred in the corridors of Washington and the boardrooms of Wall Street to stave off disaster. It is reminiscent of "Barbarians at the Gate" in that the focus is on the human drama at the most senior levels of business. As a banker myself, I really enjoyed reading about how these titans of finance were desperately flying by the seat of their pants in a helter skelter environment, just totally winging it as no one really knew what was going to happen. The book shows that even at the highest levels of business, there is no rocket science involved in such dealings.

TERRIBLE EDITING JOB: What is inscrutable is the poor writing and editing of the book - it is as if Sorkin and the editors were working under some crushing deadline, which is puzzling because a year has passed since the crisis. Just one more week of editing and revising would have achieved the following:

1) get rid of annoying typos, misspellings, poorly crafted and run-on sentences, and even one instance of a repeated sentence;

2) significantly shorten the book (there is just way too much detail on every single meeting that took place) - I began to get a headache, literally, trying to remember every banker and every subplot. It's like reading War and Peace.

3. Provide more analysis of what is going on: Again, either from time constraints or exhaustion, Sorkin does not provide thoughtful commentary on what was going on. Too often he is just chronicling the discussions that took place.

However, if you are interested in such dramas in the business world, it is still quite interesting.

And if you want to get a real understanding of the forces at work in this economic disaster, read "How Markets Fail: the Logic of Economic Calamities" by John Cassidy. It demonstrates that such economic crises are intrinsic to the fundamental structure of our capitalist system.
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22 of 27 people found the following review helpful
on January 5, 2011
In agreement with these one star reviews .. no big picture, just fragmented novelized narrative that offers no deep explanation of the events that are being described. Clearly Sorkin compiled a lot of data (gossip? hearsay?) much of which could be material for a good (great?) book ... however he did no work to condense, consolidate, collate this material ie the actual work of authorship to make this into a satisfying informative read. Maybe one day someone will actually write a real 200 page book from these (quite extensive) notes.
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