When Hank Paulson, the former CEO of Goldman Sachs, was appointed in 2006 to become the nation's next Secretary of the Treasury, he knew that his move from Wall Street to Washington would be daunting and challenging.
But Paulson had no idea that a year later, he would find himself at the very epicenter of the world's most cataclysmic financial crisis since the Great Depression. Major institutions including Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, AIG, Merrill Lynch, and Citigroup, among others - all steeped in rich, longstanding tradition - literally teetered at the edge of collapse. Panic ensnared international markets. Worst of all, the credit crisis spread to all parts of the U.S. economy and grew more ominous with each passing day, destroying jobs across America and undermining the financial security millions of families had spent their lifetimes building.
This was truly a once-in-a-lifetime economic nightmare. Events no one had thought possible were happening in quick succession, and people all over the globe were terrified that the continuing downward spiral would bring unprecedented chaos. All eyes turned to the United States Treasury Secretary to avert the disaster.
This, then, is Hank Paulson's first-person account. From the man who was in the very middle of this perfect economic storm, On the Brink is Paulson's fast-paced retelling of the key decisions that had to be made with lightning speed.
More than an account about numbers and credit risks gone bad, On the Brink is an extraordinary story about people and politics - all brought together during the world's impending financial Armageddon.
©2010 Henry M. Paulson; (P)2010 Hachette
I read this book not long after "Too Big to Fail." It has the benefit of being a first-hand account by the senior government official in the midst of the 2008 financial crisis: we learn much more in this book of the background thinking and concerns of top Treasury and Fed officials who were trying to cope with the onset of financial panic and meltdown. Put another way, the book offers much clearer context and explanation of the policy thinking than did the Sorkin book. The book keys on personal conversations and meetings, which keeps it interesting. There are revealing sketches of Mr. Paulson's interactions with Congressional leaders and the President, which show how completely unprepared they all were for the scope and severity of the financial crash. The weakest part of the book is the Afterword in which Mr. Paulson lays out the policy reforms that are needed in order to avoid a like financial disaster in the future. Although a vitally important and urgent reform (and one Congress and the Administration to their shame have still not addressed 18 months after the 2008 meltdown), this part of the book reads like a bland press release from the Treasury Department.
This book is well worth reading for a better understanding of the 2008 financial collapse. It is focused on the response to the financial meltdown at the highest levels of government and industry. It does not, however, provide particular insights into the irresponsible business practices that led to the crisis in the first place.
I listened to this as a follow up to Too Big to Fail and did not have much expectation. I was pleasantly surprised. This book provided an in depth view from inside the government. I came away feeling that Hank, Ben and Tim all were trying their best in a situation that kept blind siding them with new problems. It was like the proverbial snowball going downhill. I came away glad that they were in their roles and that they were willing to take chances with big solutions. It will be interesting to see how history judges their actions. We will need to remember that others took over and subsequent decisions may have created different outcomes than originally planned at the time of the original decisions.
I may be a little dense, but after reading several books on the subject of the 2008 financial crisis, I still didn't have much of a firm grasp of the series of cascading events that led to "the brink". Until this book that is.
Mr. Paulson was somehow able to gauge unerringly the point at which the lay reader (especially a dense one) was going to need an explanation of an arcane financial term or would need to know the significance of a given event. Additionally, we are very fortunate to hear the story from someone who was privy to all almost all the discussions and disagreements as well as someone who knows all the players personally. The result is a complete review of the entire catastrophe from the first hints of trouble at a French bank to TARP.
He avoids hyperbole, tries hard not to speak ill of anyone (although it is possible to pick up the occasional bit of rancour) but still manages to convey the the atmosphere of those dreadful months.
This is a book he should be very proud of and, after the pressure cooker he endured, I hope it gave him some relief to tell the story. It certainly gave me many hours of great reading.
PS: I'm also glad that he had some very nice things to say about your much-maligned former president: George W. Bush.
For those wanting to round out their understanding of the finacial abyss we faced in 2007-08, this book is an excellent addition to The Big Short and Too Big Too Fail. The other two drew me into the events in more riviting narratives. I recomend reading them first. But Paulson was in the middle of things; this book completes the story. I was not a big fan of Paulson before this book. I now understand and appreciate why he, Bernanke, and Geithner did what they had to do. His suggestions for fixing the system are too mportant to miss. Unfortunately, special interests and their lobbyists will never let those corrections go forward.
Loved this book, was well written and really suspsenseful as you lived through the ongoing crises with them. Financial terms explained so a layman could understand and this book is unbaised and does not go about bashing people to lay blame but simply states the facts of what happened. Overall the book is very readable and considering the subject matter, finance, is really engaging as they lurch from one crisis to the next one. Highly recommend!
Compared to "Too Big to Fail", I found "On the Brink" a superficial recounting of the financial markets meltdown of 2008. It has none of the color and context of TBTF, none of the behind the scenes flavor. Paulson criticizes no one and walks on eggshells when discussing the actions of others. Even if you sensed some disagreement, his words carefully pulled punches: "Sheila understandably defended her agency." Read TBTF to know what the players *really* thought of other players.
I am glad I read this, though. It confirmed what I felt from reading the press accounts and TBTF: The Lehman bankruptcy was not the root cause of the financial meltdown, but avoiding it would certainly have mitigated the impact on the world markets. And it *could* have been avoided. Paulson to this day says it couldn't have been avoided, but it's clear even in this book that Geitner and Paulson expected early in the crisis that the government would have to rescue/bail out (depending on your political persuasion) Lehman. At the end, though, Paulson had so publicly said the government would *not*, that he painted himself into a corner, and he *could* not. At the time I felt we were lucky to have Paulson at Treasury. I think history will confirm that is not true. He worked hard, tried hard, but in the end, because (I believe) Dick Fuld was running Lehman, Hank Paulson let it go under. That wreaked havoc around the world. Too bad.
The book did have interesting insights into Paulson's interactions with both Obama and McCain, as well as the House and Senate leaders. Again, no insight into how he really felt about most of them, but interesting, matter-of-fact retelling of those interactions.
And I found the Afterword to be the best part of the book. Paulson thoughfully outlines the key issues facing the smooth operation of global financial markets.
In short, listen to this. But to get the "real" story of what was going on behind the scenes, listen to "Too Big to Fail."
I found books like Too Big to Fail, Quants, The Big Short, The Greatest Trade Ever, and No One Would Listen to be much more interesting and insightful in their telling of this tragic episode in our history.
On the Brink is a very drab retelling of facts. Mr. Paulson refuses to point any fingers to Congress or the Administration which let us get into this mess. Everyone seemed to him to be really great guys who really worked hard. The only people he didn't seem to care for in his book were Jim Bunning and Sarah Palin and they had nothing to do with this mess. Do not waist your time.... read Too Big to Fail.
I used to work in banking, and now (and in 2008) I work in the financial/equities industry, and I could barely tolerate this book. I tried and stopped half a dozen times, it was monotone and monotonous, and it barely kept my attention. I found myself unable to pay attention, and eventually just gave up. I have a feeling reading the book would be much more interesting and productive, but the dry story in audio form just didn't work for me at all. I'm sure the story is probably a semi-interesting one for people interested in the specifics of what went on in the financial industry in 2008, but even experiencing it firsthand, this book could barely keep my attention for more than 30 minutes. Had to give up. I can't recommend this at all, with so many other, better books (and movies) out there.
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