Fool's Gold

By: Gillian Tett

Narrated by: Stephen Hoye

Length: 10 hrs and 7 mins

Publisher's summary

How the bold dream of a small tribe at J.P. Morgan was corrupted by Wall Street greed and unleashed a catastrophe....

Drawing on exclusive access to J.P. Morgan CEO Jamie Dimon and a tightly bonded team of bankers known on Wall Street as the "Morgan Mafia"---as well as in-depth interviews with dozens of other key players, including Treasury Secretary Timothy Geithner---Gillian Tett brings to life in gripping detail how the Morgan team's bold ideas for a whole new kind of financial alchemy helped to ignite a revolution in banking, and how that revolution escalated wildly out of control.

The deeply reported and lively narrative takes listeners behind the scenes, to the inner sanctums of elite finance and to the secretive reaches of what came to be known as the "shadow banking" world.

The story begins with an intense Morgan brainstorming session in 1994 beside a pool in Boca Raton, where the team cooked up a dazzling new idea for the exotic financial product known as credit derivatives. That idea would rip around the banking world, catapult Morgan to the top of the turbocharged derivatives trade, and fuel an extraordinary banking boom that seemed to have unleashed banks from ages-old constraints of risk.

But when the Morgan team's derivatives dream collided with the housing boom and was perverted---through hubris, delusion, and sheer greed---by such titans of banking as Citigroup, UBS, Deutsche Bank, and the thundering herd at Merrill Lynch (even as J.P. Morgan itself stayed well away from the risky concoctions others were peddling), catastrophe followed.

Tett's access to Dimon and the J.P. Morgan leaders who so skillfully steered their bank away from the wild excesses of others sheds invaluable light not only on the untold story of how they engineered their bank's escape from carnage but also on how possible it was for the larger banking world, regulators, and rating agencies to have spotted, and heeded, the terrible risks of a meltdown.

©2009 Gillian Tett (P)2009 Tantor

Outstanding narrative about the financial crisis

This book is one of the first you should turn to in order to understand how we got into our current economic & financial fix in the United States (and the rest of the developed world). It is well-written, well-read, moves along at a good clip, and provides an excellent explication of the derivatives/credit default swaps slice of the crisis without being too technical. It should be understandable to the lay reader. Certainly in 10 years time there will be better & more comprehensive books than this one about the crisis, but right now it is one of the best. Highly recommended.

Clear explanation of a murky topic

This was probably one of the better discussions of how banking and international finance works that I've read since the credit/mortgage crisis began. Although I'm not convinced that the world will ever be safe for CDOs, at least I have some idea why bankers, even responsible ones, saw something in the innovation

Well worth the time

This well written and retold story has a good (different) perspective. I want to keep these lessons in mind because we're bound to see another excessive situation in our lifetime.
What sticks with me most is that the men running the banks and brokerages really are clueless, they had no idea what they were doing, and yet they paid themselves ginormous salaries. Ugh.

Average book about the 2008 financial crisis

Nothing to write home about. On audio narrators voice was horrible. I would recommend other books covering the subject. This one is a snoozer.

Very Eye Opening.

What made the experience of listening to Fool's Gold the most enjoyable?

It explained the construction of the collapse that led to the financial crisis.

Timely Yet Well-Researched

Relying on inside access to J.P. Morgan, Gillian Tett provides an in-depth portrait of J.P. Morgan and its conservative lending and capital standards that allowed it to weather the recent storm. It documents how the firm pioneered the use of credit derivatives and how Wall Street left JPM behind to take them to a new extreme in the mortgage lending markets.

The book also looks at the roles of Bear Stearns, Lehman Brothers, and AIG in the financial collapse. Overall it is a balanced and deep portrait that is yet very timely and topical.

I concur that the narration isn't the greatest. I particularly dislike the use of British accents in direct quotations, but you quickly adapt to the idiosyncrasies in order to focus on the content, which is fantastic.

Great Detail, Great Story

This book provides the background of the economic crisis and knowledge of the financial instruments involved necessary for you to come to your own conclusions. The author also provides the context of politics, conflicts of interest, regulatory loopholes, personalities and ideologies. The book is also a great story with many interesting characters and a great build-up to the meltdown that is still fresh in all of our minds. The author's concluding remarks seemed slightly contrived and counter to the book's overall objectivity. Nevertheless, this is a very minor point as only the final 20 minutes of the book were affected.

Finally it's making sense

I really enjoyed this book. It's an interesting history of those strange little financial devices, credit derivatives. Most of us never heard of them until they were wildly abused by bankers and very nearly brought the world's economies to a dead stop. It's a difficult and arcane subject matter, but the author did a great job explaining what happened and the motives of the different players. To her credit, she doesn't appear to paint a simple picture with bad guys and good guys, liberal or conservative, etc. She writes like a good journalist. I'd been searching for a good book to explain what happened in the financial meltdown - I wanted something to explain why and how. This book does the job.

How did this happen? Who is to blame?

What made the experience of listening to Fool's Gold the most enjoyable?

I've read it twice and mean to read it again. I'm an artist, and economics is an alien country for me. "Fools Gold" takes the unbelievable steps that lead up to the economic chaos we now live in and breaks it down into chunks that the average person can understand,

Who was your favorite character and why?

My favorite character is the brilliant and charismatic leader of JP Morgan Jamie Dimon.

If you could give Fool's Gold a new subtitle, what would it be?

Economic chaos and how we got here.

Any additional comments?

I wish every voter would read this book and understand the need for financial oversight.

Interesting and entertaining

Where does Fool's Gold rank among all the audiobooks you’ve listened to so far?

Provides interesting insight into the development of the derivatives mania. The autor's biases as an FT reporter are obvious, but do not overly distract from the book. As an example, she refers to Greenspan as a ardent believer in the free market on multiple occassions when he was one of the greatest proponents of government intervention and coersion of the capital markets in history. Still worth the price off the sales rack.