Hot new instrument Collateralized Debt Obligations making everyone rich Feed the Beast This
didn t stop mortgage companies from pushing applicants who could have ualified for t stop mortgage companies from pushing applicants who could have ualified for loans into subprime loans Why Because subprime loans offered in the ways of fees and compensation And then there were the credit ratings agencies agreeing to offer the best ratings to securities they knew were junk It s hard to refuse the reuest of the very banks upon whom you
are dependent for your survival isn t it This book is dense but dependent for your survival isn t it This book is dense but worth the effort I m not a finance mind and there was enough history and profile type writing in this book to make it approachable for an intelligent reader McClean and Nocera are eual opportunity in that they don t politicize this story It s easy to want to but as mentioned there is plenty of blame to o around for anyone This is a Fifty Ways To Be Your Lover good survey of the 2007 08 financial meltdown and the events leading up to it The world of mortgage finance is arcane and to begin with and it was made even arcane by Wall Street sroovy new inventions Joe Nocera NY Times business reporter and Bethany McClean The Smartest Guys in the Room Enron take on the task of transforming that world into a compelling story and succeed mostly My only criticism of the book would be that it never takes a step back from the events to take a broader economic or historical view The reader is left with the sense of doom How will we ever construct a useful credit system in the US when all the players are corrupt or incompetent I think a bit of historical context would have been useful here For one thing the climax of the story is a classic banking panic as the authors themselves. Wers analysts and Wall Street traders It delves into the powerful American mythology of homeownership it proves that the crisis ultimately wasn't about finance at all; it was about human the devils you'll meet in vivid detail• Angelo Mozilo the CEO of Countrywide who dreamed of spreading homeownership to the masses only to succumb to the peer pressure and the outsized profits of the sleaziest subprime lending• Roland Arnall a respected philanthropist and diplomat who made his fortune building Ameriuest a subprime lending empire that relied on blatantly deceptive lending practices• Hank Greenberg who built AIG into a Rube Goldberg contraption with an undeserved triple A rating and who ran it so tightly that he was the only one who knew where all the bodies were buried• Stan O'Neal of Merrill Lynch aloof and suspicious who suffered from Goldman envy and drove a proud old firm into the round by promoting cronie. .
I must profess at the outset
"that I have a bit of a nerdy irl crush on Bethany McClean She is everything "I have a bit of a nerdy irl crush on Bethany McClean She is everything wish I could be Intelligent articulate well versed on topics "OF FINANCIAL AND ECONOMIC COMPLEXITY AND "financial and economic complexity and respected journalist She s also very beautiful but I am what I am so far as that is concerned I continue to read as much as I can about the Crisis of 2008 Maybe it s because I am unemployed and row and bitter with each day Maybe I d like to be able to rail against Wall Street with some arguments rooted in substance There s a little bit of that but mostly I m fascinated utterly and completely fascinated by
THE COMPLEXITY AND OUTRAGEOUSNESS WHICH WENTcomplexity and outrageousness which went creating the most disastrous financial disaster of my lifetime There is than enough blame to Arabian Nights go around for than one party Truth be told it s next to impossible to blame just one party But the drama s usual players are to be found here Subprime mortgage derivatives lax regulationreed Even so McClean and Nocera do a fine job of revealing a few little known tidbits For example how many people know that than half of the subprime loans Enchanting Baby (The Birth Place given during the lead up to the crisis were not even for first time home buyers Most of the loans went to people seeking to purchase second homes or looking toet loans to make improvements on their current homes Conservatives in denial and also in the pocket of Wall Street contributors like to place the blame on borrowers taking out loans they knew they could not afford That was a significant problem but this didn t stop mortgage officers from falsifying applications or slacking on underwriting because they were being told that Wall Street needed loans to put into the. Hell is empty and all the devils are here Shakespeare The TempestAs soon as the financial crisis erupted the finger pointing began Should the blame fall on Wall Street Main Street or Pennsylvania Avenue On Wild Nights with Her Wicked Boss greedy traders misguided regulators sleazy subprime companies cowardly legislators or clueless home buyersAccording to Bethany McLean and Joe Nocera two of America's most acclaimed business journalists the real answer is all of the above and Many devils helped bring hell to the economy And the full story in all of its complexity and detail is like the legend of the blind men and the elephant Almost everyone has missed the big picture Almost no one has put all the pieces together All the Devils Are Hereoes back several decades to weave the hidden history of the financial crisis in a way no previous book has done It explores the motivations of everyone from famous CEOs cabinet secretaries and politicians to anonymous lenders borro. .
Observe In June 2007 Bear Stearns "CREDITORS TRIED TO GET THEIR MONEY "tried to et their money at once and couldn t There was no market for the debt As the author s put it it was a classic run on a bank except those racing to pull their money out weren t depositors They were bankers Not mentioned is the fact that banking panics on this scale had not been seen in the United States for 80 years Before that panics were common 1857 1873
1893 1907 1929 all years of financial panic followed by economic collapse1907 1929 all years of financial panic followed by economic collapse we ot the banking sector under control for several decades after that Maybe we can do it again I re read this one because I think I ll be assigning it in my class I m worried we forgot about the stupidity Always You greed and hubris that led to the crisis with theov t GSEs and banks all sharing the blame There are a lot of Wild at Heart (Sons of Chance, good financial crisis books out there I like this one better than most because it focuses on mortgage backed securities and has about Fannie and Freddie than others I also love 13 bankers which I assign So Iuess I m saying everyone should read this book again especially if you re a Lucy Carmichael gov regulator or work in finance Along with Michael Lewis The Big Short this is a must read if you want to understand the recent financial crisis The authors also did The Smartest Guys in the Room about the Enron scandal and I found that book both enlightening and interesting The story paints a picture of a true financial bubble Anyway maybe I finally understand CDOs and derivatives Maybe It s a chilling story and I found myself horrified many times The worst was reading about synthetic CDO s which were like zombie derivatives They were derivatives of derivatives and allowed in. S and pushing out his smartest lieutenants• Lloyd Blankfein who helped turn Goldman Sachs from a culture that famously put clients first to one that made clients secondary to its own bottom line• Franklin Raines of Fannie Mae who like his predecessors bullied regulators into submission and let his firm drift away from its original noble mission• Brian Clarkson of Moody's who aggressively pushed to increase his rating agency's market share and stock price at the cost of its integrity• Alan Greenspan the legendary maestro of the Federal Reserve who ignored the evidence of arowing housing bubble and turned a blind eye to the lending practices that ultimately brought down Wall Street and inflicted enormous pain on the countryJust as McLean's The Smartest Guys in the Room was hailed as the best Enron book on a crowded shelf so will All the Devils Are Here be remembered for finally making sense of the meltdown and its conseuence.