Posts Tagged ‘Hank Paulson’
15
Oct
Posted by John S in Economics, Literature, On the Long Side. Tagged: Alan Greenspan, All the Devils are Here, assigning blame, Carmine Visone, David Graeber, Debt: The First 5000 years, Hank Paulson, hedge funds, House of Cards, Ivy League, Lehman Brothers, Michael Lewis, NRSROs, Rankings, ratings agencies, Ron Suskind, SEC, shadow banking, The Big Short, The Great Read-cession, Tim Geithner, Too big to fail, wall street. 11 comments
We’re done with the book reviews, but John S isn’t done breaking down the books of the financial crisis. We still have a few things left to cover, most importantly….
The Whole Truth…
Rankings!
Obviously I wasn’t going to read 16 books and NOT rank them.
It was a little hard to determine the criteria. Some of the books were well-written, but not especially good at delving into the causes; others were thorough but boring; some were great but a little off-topic. If someone asked me to recommend one of these books, I wouldn’t answer until I got more information about what exactly she was looking for. If, however, she were somehow unable to clarify, I would recommend them in this order:
16) A Colossal Failure of Common Sense
15) Reckless Endangerment
14) The Quants
13) The Greatest Trade Ever
12) Crash of the Titans
11) On the Brink
10) Bailout Nation
9) Financial Crisis Inquiry Report
8) Confidence Men
7) House of Cards
6) Griftopia
5) More Money Than God
4) Too Big To Fail
3) The Big Short
2) Bailout
1) All the Devils Are Here
Some Questions, Answered
So, um, whose fault was it?
Continue reading →
13
Oct
Posted by John S in Economics, Literature, On the Long Side, Sunday Book Review. Tagged: Austan Goolsbee, Bailout, Christina Romer, Confidence Men, CPP, Darrell Issa, Dodd-Frank, Glass-Steagall, HAMP, Hank Paulson, John McCain, larry summers, Neel Kashkari, Neil Barofsky, Paul Volcker, PPIP, President Bush, President Obama, Ron Suskind, Senator Obama, SIGTARP, Tim Geithner, Tom Daschle, Washington culture. Leave a comment
We’re wrapping up the financial crisis book reviews with today’s look at two books on the reform efforts that followed the crash of 2008.
Confidence Men: Wall Street, Washington, and the Education of a President
by Ron Suskind, 2011
The last two books I read focused mainly on the government’s response to the crisis, as opposed to the crisis itself. Confidence Men, which got a lot of attention when it came out for its revelations of in-fighting in the Obama Administration, showcases Obama’s response to the financial crisis, both as a candidate and as a new president.
As a candidate, of course, the financial crisis and the housing bubble were a boon to Obama. The sluggish economy of President Bush’s last few years helped Obama’s message of change resonate with the electorate, and John McCain’s incoherent response to the crisis—including his assertion that “the fundamentals of our economy are strong” on the day Lehman failed—helped doom his campaign.
But once Obama was elected, the crisis became a tremendous albatross. One problem was that while many within the campaign anticipated a crisis of some kind, nobody really expected it to come so fast and be so severe. Suskind details a scene from early in Obama’s campaign—August of 2007—in which Obama’s economic advisers warn him that, as president, he will need to respond to a housing crisis. But they estimated that the crisis would hit in “year two” of an Obama presidency, and it would cost about two million jobs. In reality, of course, it came before Election Day, and ultimately cost about eight million jobs. Continue reading →
11
Oct
Posted by John S in Economics, Literature, Sunday Book Review. Tagged: 9/11 Commission, Alan Greenspan, Bank of America, Bear Stearns, CDOs, Financial Crisis Inquiry Commission, Goldman Sachs, Great Depression, Greg Curl, Greg Farrell, Greg Fleming, Hank Paulson, Jeff Kronthal, John Thain, Ken Lewis, Lehman Brothers, Merrill Lynch, Moody's, Morgan Stanley, New York Stock Exchange, Osman Semici, Pecora Commission, ratings agencies, SEC, Stanley O'Neal, TARP, thundering herd, wall street. Leave a comment
On the eighth day, John S reviewed two more books of the financial crisis, including the final report of the Financial Crisis Inquiry Report.
Crash of the Titans: Greed, Hubris, The Fall of Merrill Lynch, and the Near-Collapse of Bank of America
by Greg Farrell 2010
Having read accounts of the failures of Bear Stearns and Lehman Brothers, it seemed appropriate to read a book about the third investment bank claimed by the financial crisis: Merrill Lynch. Of course, Merrill Lynch didn’t fail outright—it was sold to Bank of America, making the story slightly more complex. Greg Farrell’s book, Crash of the Titans, is really a soap opera about how two banks ended up in a reluctant and unhappy marriage.
The first step towards this malignant matrimony was the downfall of Merrill Lynch. Merrill Lynch occupied an odd position on Wall Street. On the one hand, it’s probably the investment bank normal people are the most familiar with, thanks to its “thundering herd” of brokers. On the other hand, it suffered from a clear inferiority complex for not being as profitable or as elite as Goldman Sachs or Morgan Stanley.
In its quest to catch Goldman Sachs, Merrill Lynch became one of the leaders in the CDO market, holding more CDO assets than any other bank. As the housing bubble inflated, this led a streak of immense profitability, but the lust for profits blinded many Merrill executives to the risks they were exposed to. Continue reading →
6
Oct
Posted by John S in Economics, Literature, On the Long Side, Sunday Book Review. Tagged: Abacus, AIG, Bear Stearns, books of the financial crisis, Congress, Dick Fuld, famous analogies, Fannie Mae, Freddie Mac, george w. bush, Goldman Sachs, Gregory Zuckerman, GSEs, Hank Paulson, Henry Paulson, in search of optimism, John Paulson, Jon Corzine, Lehman Brothers, midwesterners, On the Brink, Paolo Pellegrini, Protestant work ethic, Richard Nixon, Sarah Palin, SEC, squirt guns, The Great Read-cession, The Greatest Trade Ever, Treasury Secretaries, wall street. Leave a comment
Welcome to Part IV of our eleven-part breakdown of the books of the financial crisis. Having trouble keeping up? Then check out this page for all previous and future posts in the series.
On the Brink: Inside the Race to Stop the Collapse of the Global Financial System
by Henry Paulson 2010
The unifying element of the first four books was pessimism: Whether it was Ritholtz’s scorn for those in power, Morgenson’s search for someone to blame, Lewis’s tragic tale, or Sorkin’s narrative of disaster, all four books had decidedly bleak outlooks on the events. Since there is only so much despair one person can read about, I wanted to read the account of someone who would be sympathetic to the policy-makers and CEOs who everyone else blamed.
Henry Paulson was perfect. If the financial panic of 2008 has a face, it’s Paulson’s. As Treasury Secretary during the collapse, he was the one who told Congress of the dangers of Fannie and Freddie (in his infamous squirt gun analogy), who proposed TARP, and who ultimately dispensed the bailouts. And unlike the other figures prominently involved—Geithner, Bernanke—he faded from public view almost immediately after the disaster passed.
Reading Paulson’s book, though, it is hard to dislike him. His prose is straightforward and he comes across as an upstanding, diligent worker with integrity. He’s honest, but polite and gracious to a fault—despite presiding over what many would describe as a complete disaster, he has nothing but kind words for almost everyone involved.* He worked for Presidents Nixon and Bush—two of the least popular Presidents of the last 50 years, if not ever—but says nothing negative about either. He clashed with another prominent public figure, Jon Corzine, for the top spot at Goldman Sachs, but all he says about that is “frankly, the pairing was never right.” Continue reading →