504 of 521 people found the following review helpful
I thought it would take at least a decade for a book this good,
This review is from: All the Devils Are Here: The Hidden History of the Financial Crisis (Hardcover)
I thought it would take a couple of decades of perspective to tell the full story of the crisis. Meanwhile Michael Hirsh's Capital Offense (which covered the story from Washington), along with The Big Short by Michael Lewis (focusing on a few offbeat portfolio managers), Justin Fox's The Myth of the Rational Market (which went deep into intellectual history and gave testimony from many of the people who invented the theories), The Quants by Scott Patterson (working from the equations out) and Glenn Yago and Franklin Allen's Financing the Future (which traced the story from prehistory into the future and emphasized the positive side of financial innovation as much as the negative side) were the best available accounts. All had stylish writing, great stories and thorough research to cover important aspects of events.
Without taking anything away from any of those books, All the Devils are Here manages to cover every important financial aspect of the crisis. To be fair, it doesn't go into as much history or theory as Justin Fox, Michael Hirsh or Yago and Allen did, and it's not as great a story as Michael Lewis and Scott Patterson extracted. It covers the crisis and only the crisis and is too detailed to be as much fun as Lewis and Patterson.
You won't find gigantic surprises in this book, the usual suspects are examined: originate-to-sell, government-sponsored entities, political pressure to increase homeownership and provide jobs and perks for politicians and their friends, rating agencies, mathematical models divorced from commonsense and reality, CEO's remote from their businesses, and all sorts of people chasing profits and supressing doubts. What this account adds is nuance and balance. Different things mattered at different times, and in most cases there were at least some positive aspects. Things that everyone agrees were bad usually turn out to be bad in this account, but often in slightly different ways than is commonly assumed. Not all doubts were supressed, and a comforting number of people acted with honor and wisdom rather than short-term focus on profits or votes (not a decisive number, unfortunately, but comforting compared to popular conception).
If you read one book to understand the crisis, I recommend this one. Your understanding will be much deeper if you read all the ones above, and those might be better choices if you're interested in the crisis in some larger context, like the history of finance or political decision-making. But this is an amazing accomplishment, to distill this complete and even-handed a story while the fallout is still falling and few participants have had a chance to reflect on events and add perspective. No doubt there will be better histories in the future, but I'll bet the authors will all start by reading this one.
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Showing 1-10 of 21 posts in this discussion
Initial post: Nov 16, 2010 6:24:22 PM PST
Dennis R. Jugan says:
I recommend an additional book, "The Speculation Economy: How Finance Triumphed Over Industry" written by Lawrence E. Mitchell.
It's a thoroughly researched account of when and how the tail (Wall Street) began to wag the dog (corporations/business) in historical and political context with the rise of finance capitalism.
With 95 pages of notes and bibliography, it serves as a comprehensive primer on how we arrived at multiple financial debacles in the 20th and early 21st centuries. The final chapter entitled "Manufacturing Securities" leaves the reader at the doorstep to the most recent financial crisis. The book was published in 2007.
In reply to an earlier post on Nov 16, 2010 7:52:06 PM PST
Thanks for the recommendation. It looks very interesting, although I usually find people who make sharp distinctions between "speculation" and "investment" get off-track. But your recommendation, and the review by James Mcritchie (who I respect a lot) make it worth getting for a look.
However, I don't think it belongs on my list. It may give great insight into the crisis, but it can't be a history.
Posted on Nov 16, 2010 8:52:13 PM PST
Raymond Cote says:
I just heard that the authors are going to be on the Daily Show tonight, so naturally my first thought was that they'd just blame greedy capitalists while ignoring the role of the federal government and Federal Reserve. But now I read your review and it appears that they're not shy about blaming them. I think I'm going to have to read this book.
Posted on Nov 17, 2010 7:44:22 AM PST
Patrick J McGrath says:
In reply to an earlier post on Nov 17, 2010 9:53:28 AM PST
Last edited by the author on Nov 17, 2010 10:08:28 AM PST
Dennis R. Jugan says:
>>> but it can't be a history <<<
Actually, the book excels as a comprehensive history of the American corporation and its relationship to Wall Street.
There's very little that's directly related to this specific economic crisis; rather, the book investigates fundamental defects, the mistakes of the past, and how they've persistently returned to affect our economic system with recurring crises.
In reply to an earlier post on Nov 17, 2010 10:31:15 AM PST
Posted on Nov 17, 2010 11:28:06 AM PST
Amazon Customer says:
I would add "13 Bankers" to the list as wells "Too Big to Fail". Don't know if I could get through another book on this depressing subject matter, although I thought the two authors did a good job of reviewing with Jon Stewart last night, some of the key thoughts in their book. I also hear the movie "Inside Job" does a good job of explaining this sorry debacle, which we are still paying for in some degree. Having read all of these accounts, it is irritating to hear the media and the politicians try to spin what really happened versus what actually did happen, and the public which thinks that Obama was president when TARP was passed. Republican politicians have a propensity to put all of the blame on Fannie and Freddie and absolve Wall Street, which is ludicrous.
In reply to an earlier post on Nov 17, 2010 12:20:15 PM PST
Wow, a critic critic, I'm impressed. I take your point, however. I was looking for a lead-in rather than attempting to get metacritical but I don't need the reference to the other review to do that. I'll edit. Thanks for the feedback. Will you read the rest now?
In reply to an earlier post on Nov 17, 2010 12:21:17 PM PST
And a critic critic seconder. When that kind of person thinks you need to take a break and get some perspective, you have to take it seriously. I'm going hiking.
In reply to an earlier post on Nov 17, 2010 12:28:02 PM PST
I should have said, "it can't be a history of this financial crisis." I haven't read it yet and I'm not saying anything bad (or good) about it, just that it doesn't qualify for my list.