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142 of 147 people found the following review helpful:
4.0 out of 5 stars
The Origins and Story of the Financial Crisis, April 6, 2010
This review is from: The End of Wall Street (Hardcover)
One of the differences between Roger Lowenstein's 2000 book, When Genius Failed, and his latest book, The End of Wall Street, is that when Genius was written it plowed a lot of new ground describing the events that led up to (and followed) the collapse of the improbably-named Long Term Capital Management (LTCM) hedge fund back in 1998. (At that time, the LTCM saga was a very big deal, although the seriousness of the event has certainly been eclipsed by the more recent financial crisis.) The fact that Lowenstein was--and remains--a gifted writer just made Genius all the better. Today, in contrast, the events of the recent financial crisis are reasonably well known, and I've lost count how many books have been written on the subject. Is there room for one more? Sure. However, don't expect blinding revelations. Really. There is little new material that you probably haven't seen elsewhere. Fortunately, The End of Wall Street is well written, as you would expect from Lowenstein, so be prepared to enjoy a thoughtful, well-researched and engaging story. I haven't downgraded The End of Wall Street because it isn't the first book on its subject (although some may want to do that), but rather have rated it on the basis of how enjoyable it is. Frankly, I don't think it's quite up to When Genius Failed standards, but it's still a good effort.
This 298-page book begins with a list of its cast of characters that's over eight pages long. However, many of them--like Ben Bernanke, Warren Buffett, Jamie Dimon, Barney Frank, Timothy Geintner, Alan Greenspan, Larry Summers and others--hardly need an introduction. Lowenstein accurately tells the reader than it wasn't so much what followed the Lehman Brothers failure that was most important, but what preceded it. So we go back--way back--to the history of Fannie Mae and Freddie Mac. Fannie, for example, dates back to 1938. (Freddie was created in 1970.) Latter, in 1968, Lyndon Johnson wanted to sell shares to the public in order to get Fannie off the government's books. Obviously, Fannie wasn't all good news, even back then.
Although I am taking some liberty at dividing the book, here are some of the main topics through which Lowenstein tells his story: (1) Fannie, Freddie and the somewhat toothless and ineffective OFHEO (Office of Federal Housing Enterprise Oversight) that was created to watch over them; (2) Subprime loans, complete with the stories of Angelo Mozilo, Countrywide's CEO, NINA (no income, no asset) loans, New Century Mortgage, CDOs, etc.; (3) Other lenders, including JP Morgan and its more cautious CEO, Jamie Dimon; (4) Lehman before its fall; (5) The increasingly aggressive and competitive atmosphere among major banks, with special emphasis on CitiGroup; (6) The government takeover of Fannie and Freddie; (7) Lehman's collapse and its many aftershocks; (7) Hedge fund turmoil; (8) The TARP; (9) The Wachovia deal; (10) Bernanke and Paulson; (11) The Great Recession; and (12) The end--of Wall Street. It's not the really the end of Wall Street, of course. This is literary license. Interestingly, Lowenstein includes mention of Hyman Minsky's provocative "Instability Hypothesis," which is plus for the reader.
The book starts and ends with mention of Robert Rodriguez, the manager of two mutual funds for First Pacific Advisers (and amateur race car driver). According to Lowenstein, here was a man way ahead of his time in regards to seeing the building financial crisis. That may well be true, but Mr. Rodriguez isn't quite the investing genius he may seem in the pages of this book. In 2008, for example, with the conservative Mr. Rodriguez's stock-oriented mutual fund approximately 40% in cash for most of the year, he managed to lose almost 35%, compared to the (100% invested) S&P 500's 37% loss.
In closing, if what you are looking for is a lot of fresh meat regarding the recent financial crisis, I wouldn't buy this book. However, if you enjoy reading a lively, well-written and solidly informative summary primarily of the events that led up to the crisis, this is a good choice.
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27 of 32 people found the following review helpful:
5.0 out of 5 stars
So far, the definitive book on our Great Recession and its causes, April 14, 2010
This review is from: The End of Wall Street (Hardcover)
Roger Lowenstein, an accomplished journalist on issues related to high finance and Wall Street, pens a concise, analytical and thrilling overview of our Great Recession culminating in the pinball like events of September and October 2008. While his protagonists are Paulson, Bernanke and Geithner, he neither fawns nor is overly critical, providing understanding and appreciation to their roles and the outcomes of their policies. He examines the excesses of Fannie and Freddie and the legislative refusal of Democratic Congressional leaders to reign them in. He examines the vital role of the three major rating agencies and how their failure to flag the vulnerabilities in the mortgage securities contributed to the mess. AIG and its tentacles in all areas of the financial world are probed making its highly controversial bailout understandable. When Paulson yanks its blameless president's multi million dollar bonus, the reader murmurs "ouch." Lowenstein ferrets into Morgan Stanley's teetering position explaining its final sale of stock to the Japanese. The Big Three's 10/13/08 meeting with the banks forcing the federal government's investment in them is the capstone of governmental intrusion in this time of crises. He deftly plays out his timeline from 2007 through the Obama election never allowing the reader to get lost in the narrative. Without explication, for an adroit writer like Roger Lowenstein is too subtle, it is clear that the events of this two month crisis period keyed the election of Barrack Obama. His superb closing chapter ends with an observation about the prominence of finance in the last two decades and how its central role has diminished now; thus, the title of the book. The future ramifications of the Great Recession can neither be wholly foreseen nor predicted but Lowenstein does an excellent job of forecasting the future by explaining the past.
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15 of 17 people found the following review helpful:
3.0 out of 5 stars
Missed it by that much............., May 20, 2010
This review is from: The End of Wall Street (Hardcover)
The title promised so much more than the book actually delivers. The dustjacket uses such words as 'sizzling', 'damning' and 'searing' to describe the book's revelations but Emile Zola this book is not. At the time of writing, no custodial sentences had been passed on any of the parties responsible for the Great Financial Crisis and sadly this book will not be the one that leads to the lights being on at midnight in the offices of ambitious prosecutors. That said, it covers the ground and to the layman it is a well written history of a time when the banking industry and Wall Street lost their heads and any trace of ethics.
Roger Lowenstein employs the eighteenth century economist Adam Smith's famous phrase - 'the invisible hand', but credits this to the author of a book written only last year. Perhaps this is not the author's fault; merely the usual careless Penguin editing.
I did enjoy reading the book however, although it is not "J'accuse". Written with more passion, this book could have been truly great.
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