The roots of the mortgage bubble and the story of the Wall Street collapse - and the government's unprecedented response - from our most trusted business journalist.
The End of Wall Street is a blow-by-blow account of America's biggest financial collapse since the Great Depression. Drawing on 180 interviews, including sit-downs with top government officials and Wall Street CEOs, Lowenstein tells, with grace, wit, and razor-sharp understanding, the full story of the end of Wall Street as we knew it.
Displaying the qualities that made When Genius Failed a timeless classic of Wall Street, his sixth sense for narrative drama, and his unmatched ability to tell complicated financial stories in ways that resonate with ordinary readers and listeners, Roger Lowenstein weaves a financial, economic, and sociological thriller that indicts America for succumbing to the siren song of easy debt and speculative mortgages.
The End of Wall Street is rife with historical lessons and bursting with fast-paced action. Lowenstein introduces his story with precisely etched, laserlike profiles of Angelo Mozilo, the Johnny Appleseed of subprime mortgages, who spreads toxic loans across the landscape like wild crabapples, and moves to a damning explication of how rating agencies helped gift wrap faulty loans in the guise of triple-A paper and a takedown of the academic formulas that - once again - proved the ruin of investors and banks.
Lowenstein excels with a series of searing profiles of banking CEOs, such as the ferretlike Dick Fuld of Lehman and the bloodless Jamie Dimon of JP Morgan, and of government officials, from the restless, deal-obsessed Hank Paulson and the overmatched Tim Geithner to the cerebral academic Ben Bernanke, who sought to avoid a repeat of the one crisis he spent a lifetime trying to understand: the Great Depression.
Finally, we come to understand the majesty of Lowenstein's theme of liquidity and capital, which explains the origins of the crisis and that positions the collapse of 2008 as the greatest ever of Wall Street's unlearned lessons. The End of Wall Street will be essential reading as we work to identify the lessons of the market failure and start to rebuild.
©2010 Roger Lowenstein (P)2010 Penguin
As a fan of Lowenstein's earlier book about LTCM implosion, I snatched this up the minute it was available. Unlike the LTCM story, however, most of us have lived through the recent crisis in real-time and have probably read quite a bit of what was happening ad nauseum. Although Lowenstien has done in homework, as usual, and supplies us with "fly-on-the-wall" tidbits, such as conversations that took palce inside boardroom meetings.
What the book does mainly is to paint a more nuanced and complete picture of the crisis, tracing it back to its early origin. The media has tried to pin the blame on specific persons (such as Greenspan or the greedy bank CEOs) or institutions (such as Goldman), but the truth is much more murky. We get a better glimpse on the CEOs, who acted on both peer pressure and their own ignorance about the actual complexity of the products. The political landscape is also an important factor, which has to do with Democrats that pushed homeownership and its unintended consequences.
For me, the book answers (though not definitely), some lingering questions, such as why the Fed decided not to bail out Lehman, and whether Henry Paulson was only the banks' interest.
Compared to Michael Lewis's "The Big Short," which cuts a narrow swath by focusing on several fringe players who profited from their prescience, "The End of Wall Street" is more like the definitive recounting that covers all the bases. I would strongly recommend reading both books to get the full picture.
As for the narration, I personally find it amateurish and annoying. He sounds like a college kid doing a bad impression of an old-time PSA (he hits the last word of each sentence hard and quick). I find the voice not only lacks gravitas but worse yet, sounds as if he's just "reading" without real comprehension. Check out the sample before making your decision.
The book is a chronicle of events before and around the financial crisis of 2008. It is attempting to tell the story of the financial crisis in a similar fashion to the author’s best book, "When Genius Failed: The Rise and Fall of Long-Term Capital Management ". Unfortunately, this book does not come close. If you’re looking for a book similar to the story of LTCM, you’ll be sorely disappointed. The span of the coverage is so vast that inevitably leads to a shallow coverage of the events. Unlike the LTCM book, this book lacks characters and the real people. The reader never gets to know anybody beyond the media headlines.
Throughout the book, the author, perhaps intentionally, avoids passing a definitive judgment on any government official or most of Wall Street Execs. It appears, however, that he is more willing to blame free markets for the crisis. He does point out that government was partly responsible for the meltdown by forcing Fannie and Freddie to lend freely in pursuit of universal home ownership (as if credit worthiness can somehow be legislated). In many ways the book is balanced, perhaps too balanced, to the point that it feels like the author did not want to make enemies.
At the end, like many other books written about the financial crisis of 2008, it declares the end of capitalism as we know it. I’ll just remind the readers that this claim has been made many times in the past. To blame free markers for crises is to blame free will for human crimes. It’s only an excuse to avoid accepting responsibility for risky/culpable behavior.
Having known little about the world of macro economics, I got done with this book much smarter about it. Lowenstein does a fantastic job of explaining what happened and giving you some clue about the players involved too. I loved it!
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