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Exile on Wall Street: One Analyst's Fight to Save the Big Banks from Themselves Hardcover – November 15, 2011
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—Paul A. Volcker, former chairman of the Federal Reserve
"Exile on Wall Street offers Wall Street's rarest commodity: the truth about our nation's largest banks and how they almost toppled capitalism. If you want to know the sickening truth about the largest banks, read Mike Mayo's exposé."
—Harry Markopolos, author of No One Would Listen
"Mike Mayo is one of the best financial analysts on Wall Street. He brings clarity to a world full of uncertainty."
—Maria Bartiromo, leading financial commentator
“Mike has long advocated for the investor. If only directors of business corporations with the legal and moral obligation to their shareholder base would emulate his diligence on their behalf, then good corporate governance would be restored. Every public company director ought read his book!”
—Thomas Garrott, ex-CEO of National Commerce bank and an ex-director of SunTrust
Top Customer Reviews
Mike Mayo seems to be one who works for the latter two reasons, and that made him unusual on Wall Street. As an analyst of bank stocks on Wall Street, Mike Mayo was not always right, but he was right more often than not. He had a strong desire to tell what he saw to be the truth, which did not win him friends amid general overleverage in the banking sector (the banks lent too much).
Wall Street does not exist to make the buyers of the securities rich, rather, Wall Street exists to help companies get financing; the large profits of Wall Street come from the creation of stocks, bonds, and other securities to institutions and individuals.
There may be a question, though: if Wall Street does not exist to enrich the buyers of securities, then why do they employ analysts who try to point out value to potential buyers? Even today, it is because Wall Street wants to make money off of the underwriting of future securities. After all there is no money to be made in the secondary trading of ordinary securities anymore.
That is why the opinions of analysts still remain roughly 65% bullish, 30% neutral, and 5% bearish. Their posture reflects the way Wall Street positions itself for those they make money from: securities issuers, not securities buyers.
And similar to rating agencies, it has to be that way, because only the securities issuer has a concentrated interest in the issuance of a security, and for bonds, the rating.Read more ›
As a risk manager and analyst who has been evaluating financial institutions for twenty years, I found the book a welcome addition to a wide body of work, from Liar's Poker and Barbarians at the Gates to The Big Short. On the other hand, I was hoping for a wider range of anecdotes and incidents supporting Mike's underlying thesis: how difficult their employer makes it for a sell side analyst to be professional and objective in evaluating a company for investors, especially where bad news is concerned. In particular the underlying revenue driven reasons why and the complexity and contradictions of the business model. As an internal cop who rarely had to bother with placating the management of companies I was analyzing my approach is more reflective of Steve Eisman's adage: Always assume they are lying to you.
Perhaps because of his early experience he describes working at the Fed, Mike has what I view as an overly evolved regard for regulators and the Fed. In particular, like a previous reviewer I would remind Mike that the Too Big To Fail doctrine was first established by the bailout of Continental Illinois in 1984, with the approval of then chairman Paul Volcker, a man some of us refer to as the General Grant of central bankers. It's not meant as a compliment.Read more ›
It is an easy read. The sentences flow smoothly from one to the next, and Mr. Mayo avoids overuse of banking vernacular that usually makes one's eyes glaze over. When he did, necessarily, introduce financial terms not commonly used by the public, he would provide analogies from sports and everyday life to explain them. Mr. Mayo, and his parents before him, have had interesting life experiences which he inserts periodically into this work. His modesty and self-effacing anecdotes are a welcome pleasure, as well.
If one wants to "get into the weeds" about the causes of the 2008 banking crises, this book is an excellent primer.
Chapters which explain the 2008 crisis and afterwards make suggestions for future improvements in the industry do not contain anything different from what's already out there. The parts I liked the most were the biographical ones in the beginning of the book, from the Fed period to the first years as a sell-side analyst. Stories like the private jet trip with the bank's CEO are not surprising for somebody who works in the industry, but are really enjoyable to read, coming directly from the perspective of the analyst involved.
I would recommend this book for somebody who's curious about the way the financial industry really works and the 2008 events, but not for somebody who's already in the field and has professionally lived through the crisis.
Most Recent Customer Reviews
It is worth reading to understand some of the conflicts of interest affecting the securities industry. Read morePublished 25 days ago by George
I like the book. It depicts the problem with banks and the government, where transparency is missing and corruption is severe. Read morePublished 22 months ago by P. Kim
You already knew banking was petty and corrupt. Now you'll learn how Citibank and JP Morgan...Jamie Dimon's of the world.... Read morePublished on July 25, 2014 by john broden
This is a must-read for anyone interested in the state of our banks and how they got to where they are today. A clear-eyed look at our too-big-to-fail institutions. Read morePublished on June 23, 2014 by TopCat19
Mike Mayo writes a very detailed but also very readable account of the severe problems in the banking system that caused the financial crisis of 2008. Read morePublished on January 15, 2014 by Joseph R. McFaul
This book merits between 3.5-4 stars, depending on your mood and frame of mind. The plot isn't that original and Mayo meanders along the path tread by others - Dan Reingold,... Read morePublished on November 17, 2013 by ajd
This is the first time in my life that I decided to write a review on a book though I have read many not so good books but this one was probably one of the worst. Read morePublished on March 19, 2013 by Rahul Maniar
Mike Mayo gives you some great insight into the workings of Wall Street. You will learn the crises was the making of not only government, but the greed that government policies... Read morePublished on March 17, 2013 by rsjonesco