Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves, also known as Too Big to Fail. Andrew Ross Sorkin delivers the first true behind-the-scenes, moment-by-moment account of how the greatest financial crisis since the Great Depression developed into a global tsunami. See 1 question about Too Big to Fail. Andrew Ross Sorkin is The New York Timess chief mergers and. Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Sold by: Fun with Books and Board Games.
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Editorial Reviews. Review. “Comprehensive and chilling.” —Time “ His action scenes are . “Too Big to Fail” is an altogether excellent book by financial journalist Andrew Ross Sorkin. It's a compelling narrative that tells the story of how the. earn your way to a free book! Too Big to Fail by Andrew Ross Sorkin . “Sorkin has succeeded in writing the book of the crisis, with amazing levels of detail. They were masters of the financial universe, flying in private jets and raking in billions. They thought they were too big to fail. This book gives an account of the.
Most economists now blame a decades-long national credit binge, coupled with lax or no regulation, and incentives for business to assume irrational risk.
Too Big to Fail
Fueling all of those, Sorkin suggests, were insanely wild compensation levels for bankers. As the financial crisis spread, that perspective was maintained. In addition to an intentionally lax regulatory environment, Sorkin suggests, there was also incompetence.
Taking a body blow to his reputation is Christopher Cox, chairman of the Securities and Exchange Commission during the meltdown. This is your fucking job. You have to make the phone call. Corporate and personal reputations and livelihoods were on the line.
They make money on the interest people have to pay for those loans. If the standards for getting a loan are pretty lax as they were at the time then a lot of people won't be able to repay their loans and the bank doesn't have the money, isn't earning interest but has a dud house that won't sell for a profitable amount or a bankrupt business.
So the bank isn't making any money but in an effort to do so, it relaxes restrictions on getting a loan even more so even more people borrow money and fail to repay it in this depressed economy There is another arm to this banking scam business, that is investment, and here's where the big bucks come in.
Investment bankers are always looking for good businesses where they can download shares at a much lower price than they think they will rise to in the future, then they can sell them and realise a profit.
Of course, there is always the risk they made a wrong judgement call and the shares fall in price and as they are on their way down they have to decide whether to stick with them and hold on to them and hope they will go up some time or get out with a reduced amount. Either way the bank is holding on to some pretty worthless stuff, like the houses that got foreclosed and won't sell for the value of the loan and the bankrupt businesses, or they've taken a loss on the shares either completely or close enough.
So there you have it, whatever the banks did in a depressed economy they were losing money. If everyone were to go to their bank to withdraw all their money they couldn't as the banks have lost some of the money on those unwise deals, and have more locked up in loans and investments that might pay up or might also go belly-up.
So some of the bigger investors seeing that Lehmans among other banks looked like they were full of bad debts and old houses and not much cash wanted their money out.
On Wall Street, people took notice of big investors pulling their money out, and more people did, and started to look at the other banks most of whom were in exactly the same position. So these big investors were pulling their money out from everywhere and looking to the Far East and points South, North, East and West where the bankers had been more regulated by government and not allowed to carry on risking people's money to the degree there was no longer enough to pay people their money back.
A. No, never.
So the banks couldn't pay back the depositors their money, and like a pack of cards one after the other began to collapse. The next thing, the final thing really, was the fear that you and me and everyone else on your street would suddenly wake up and realise what was happening with the big investors was happening to you too and be in the queue at their bank at 9 a.
And the bank wouldn't have it. Can you imagine the scene?
Andrew Ross Sorkin's blow-by-blow account of the unfolding of events in the US, when financial titans up to and including Goldman Sachs were days, or even hours, away from running out of liquidity, gives a handy dramatis personae of those inhabiting Wall Street's Jurassic Park, in the manner of a compendious Russian novel.
A reader uninitiated in the detail of the crunch will need it: there are seemingly endless descriptions of the men and one or two women involved.
Take the following: "Jamie Dimon's black Lexus pulled away from the curb of his Park Avenue apartment to head down to the Fed at just before 8am. Dimon, who sat on the back seat returning emails on his BlackBerry, had just gotten off a conference call with his management team… telling them to prepare for the bankruptcies of Lehman Brothers , Merrill Lynch, AIG, Morgan Stanley and even Goldman Sachs.
He knew he might have been overstating the case, but figured they needed to be prepared.
Sorkin's portrayal of Erin Callan, former Lehman's finance director, is typical: she is a "striking blonde" with "Sex and the City" stilettoes, suspected to be romantically involved with the man who hired her, a suggestion made without a shred of substantiation.
The bigger problem, though, is the claim of authorial omniscience, admittedly based on more than hours of interviews with people.
The book, which has been billed as the defining account of the credit crunch, has caused a media storm in Manhattan: Sorkin's colleagues on the New York Times are reported to be angry at his failure to credit the newspaper's scoops. Blankfein has been heard to grumble since about Sorkin's self-professed mind-reading abilities.
Sorkin's account deals with the frenzied few months starting on 17 March , when Lehman Brothers chief Dick Fuld was summoned back by then treasury secretary Hank Paulson from a trip to India because of the collapse of Bear Stearns.download the Audiobook Download: Sure it could be hard to raise money to download raw materials and machinery if the banks go, but what they have sold and have to sell gives them cash coming in.
Wall Street professionals speaking openly about what Sorkin chronicles is at the very least quite rare.
When the next, inevitable bubble bursts, the cycle will only repeat itself. In addition to an intentionally lax regulatory environment, Sorkin suggests, there was also incompetence. Download our Spring Fiction Sampler Now.
The book, which has been billed as the defining account of the credit crunch, has caused a media storm in Manhattan: Sorkin's colleagues on the New York Times are reported to be angry at his failure to credit the newspaper's scoops. Instant access to over 20, book summaries Personal Discover your next favorite book with getAbstract.