Andrew Ross Sorkin - Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisisand Themselves
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TOO BIG TO FAIL ; September 2008 play by play, meeting by meeting expose'
Pros
Fascinating, well researched, detailed, play by play of September 2008
Cons
perhaps too detailed and too focused.
Recommended it?
Yes
The Bottom Line:
A clear, play by play record of Wall Street's house of cards tumbling in September 2008.
"There aren't enough lifeboats. Someone is going to die. So you might as well enjoy the champagne and caviar!" Jamie Dimon, CEO of JPMorganChase, to his staff the night before Lehman filed for bankruptcy.
TOO BIG TO FAIL is the 539 page (636 pages including acknowledgments, cast of character mini-bios, 16 pages of photographs and index), 2009 book by New York Times chief mergers and acquisitions financial columnist Andrew Ross Sorkin detailing the major players in and around the collapse and absorption of Lehman Brothers in September 2008.
The book slowly introduces us to a cast of characters and gives us almost a minute by minute account of what several Wall Street CEOs and Washington D.C. regulators were doing and even the conversations they were having.
The detail is extraordinary (and exhausting unless you're a lawyer or really, really into this). We get to know the history of several high powered business men and even peak into their personal lives (the cast of characters section in the beginning of the book helps to have as a reference).
It all begins right before the government puts Bear Stearns into play and J.P. Morgan Chase swoops in; and ends with a very brief Prologue looking back at September and October 2008 from an August 2009 perspective.
While it is fascinating to be a fly on the wall during many conversations and negotiations, it's still hard to care about these ambitious, arrogant, powerful people as they try to maneuver in various ways to stop their house of cards from tumbling. I will say that while I wish the book was about 200 pages shorter, it is not a difficult read once you get into it about 60 or 70 pages. The book is also NOT 800 pages long as some other reviews exaggerate.
The very complex mechanics of what they were doing is slowly laid out for us and we are at times as overwhelmed and in the dark as the parties having meetings and discussions are, but at other times we are allowed, thanks to Sorkin to be a bit smarter than the people in the meeting (because we know what the future is). And since we know what ultimately happens, we understand why some of the detail and quotes are particularly relevant. The inside view allowing us to see for ourselves how something like this got even worse AFTER problems and mistakes were discovered is invaluable at understanding how business and politics REALLY works.
For several hundred pages we are witnesses to a company that is scrambling desperately to stay alive and afloat as we watch Lehman Brothers CEO Richard S. Fuld Jr. negotiate and juggle people, information and resources to buy time and keep his company solvent, viable and attractive to possible buyers.
Some very smart men, made some very serious mistakes. Most are portrayed as having good intentions and some seem to be even honest and naïve, although some decisions seemed to be based on some portions of greed and ego.
There's a bit of optimism that having this knowledge and being able to put together a blow by blow re-cap of what happened behind the doors at several companies and in government offices will help prevent something like this from happening again-but I don't believe that. Unfortunately some people will just believe they will be better and more invincible at being able to dance through future mine-fields. Some do believe and with good reason that they are Too Big To Fail.
"You shouldn't assume it's correct just because Goldman said it. My brother works at Goldman, and he's an idiot!" Joseph Cassano former chief COO of AIG and former head of AIG Financial products unit.
"Take a step back. Just think about it for a minute, both from an internal as well as an external point of view. The guy's not good enough to run the company, but you're saying you're going to need to keep him around?" Former AIG chairman Bob Willumstad to HIS predecessor Martin Sullivan, who was attempting to stop the firing of Joseph Cassano.
CONS
Sorkin is a bit limited by his sources which are many and very impressive. However, he's also an insider in some ways, needing to carefully stay on the good sides of many people to continue to get information and permissions to use that information for his columns and books.
Because Sorkin concentrates mostly on a narrow period of time, he is able to bring us many day to day details, but he's not able to give us a strong big picture perspective (he wasn't attempting to). He is forced to let the things people said in meetings and in interviews to be the record on the subject. At times he humanizes some of the characters and takes some liberties by taking them at their word (based on various sources). We are still getting a compromised picture of what really happened of course, because in meetings and interviews, people only occasionally say what they really mean and politicians and high profile business executives are masters of manipulation if not outright deceit. The danger is the illusion that the detail conversations represent an almost exacting truth. It's the best we are going to get, but don't believe it all completely. And so you may ask, is all of this detail really necessary?
There is NOT a table of contents for the book. There are no footnotes that might be used to reveal some information that contradicts what some people say in meetings, such as when certain information was actually known by various people involved. There were a lot of people playing a high stakes poker game, with some bluffing going on, and we now know some bluffing was going on, but that is not integrated into the book for the most part.
No one is made to be a villain (which perhaps is a pro in a way too), and everyone seems to be working very hard to protect their shareholders and taxpayers --only once in while is an ornery or outright selfish comment uttered and it is clearly shown as a heat of the moment comment. Some of the people in the book (like Paulson) are allowed to defend themselves, while others either weren't given the opportunity or didn't take the opportunity to do so and come off a little worse for it than perhaps they should (Bernanke for instance).
PROS
Sorkin's writing is very clear and mostly concise and he builds up several of the major players as three dimensional characters giving us their histories and an idea about their personalities outside of the meetings, phone calls and interviews of 2008.
You don't have to have a deep knowledge of finance to read and understand this book. There also some lighter gossipy tidbits and revealing character quirks that make these people more human and ‘normal'. They sometimes add some humor to what is going on as well.
The research and resources Sorkin drew upon are very impressive. Most of the dialogue he uses can be traced back to other sources and he rarely seems to put words in people mouths even when he has to be doing a little bit of that to make conversations in meetings flow and read well on the page.
"I'm certain you'll spark a freakin' panic..." Timothy F. Geithner, previous president of the New York Federal Reserve, to Henry M. Paulson, regarding the public disclosing of his $700 billion bailout plan without letting Congressional leaders what the plan was...
"When I picked up my newspaper yesterday, I thought I woke up in France." Senator Jim Bunning to Henry M. Paulson after the Treasury tried to get authority to use tax payer money to invest in Fannie Mae and Freddie Mac.
MY FAVORITE PASSAGE FROM THE BOOK (SORT OF A SPOILER SINCE IT COMES FROM THE EPILOGUE-THOUGH IT REVEALS NO SURPRISES)
When the post-bailout debate was still at its highest pitch, Jamie Dimon sent Hank Paulson a note with a quote from a speech that President Theodore Roosevelt delivered at the Sorbonne in April 1910 entitled "Citizenship in a Republic. It reads:
It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and attain, because there is no effort without error or shortcoming but who knows the great enthusiasm, the great devotions who spends himself for a worthy cause; who, at the best, knows in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.
BOTTOM LINE
If you want to have a better understanding of what happened that led to biggest financial meltdown that Wall Street has ever had (since the Great Depression), Too Big To Fail is a must read. You'll get a clear understanding of what happened, why the Lehman bankruptcy happened and you'll meet some of the biggest and most powerful Wall Street and Washington D.C. regulators as well. Of course since the book focuses on September 2008 and we are now in 2011, a lot of the information is already well known and there isn't the kind of perspective that makes some of the details we get in this book seem particularly important to know.
Oh and Curtis Hanson is directing the HBO movie version of the book which should be premiering in 2012.
4 Stars. If you don't like detail subtract a star; if you really like detail; add a half star.
TOO BIG TO FAIL is the 539 page (636 pages including acknowledgments, cast of character mini-bios, 16 pages of photographs and index), 2009 book by New York Times chief mergers and acquisitions financial columnist Andrew Ross Sorkin detailing the major players in and around the collapse and absorption of Lehman Brothers in September 2008.
The book slowly introduces us to a cast of characters and gives us almost a minute by minute account of what several Wall Street CEOs and Washington D.C. regulators were doing and even the conversations they were having.
The detail is extraordinary (and exhausting unless you're a lawyer or really, really into this). We get to know the history of several high powered business men and even peak into their personal lives (the cast of characters section in the beginning of the book helps to have as a reference).
It all begins right before the government puts Bear Stearns into play and J.P. Morgan Chase swoops in; and ends with a very brief Prologue looking back at September and October 2008 from an August 2009 perspective.
While it is fascinating to be a fly on the wall during many conversations and negotiations, it's still hard to care about these ambitious, arrogant, powerful people as they try to maneuver in various ways to stop their house of cards from tumbling. I will say that while I wish the book was about 200 pages shorter, it is not a difficult read once you get into it about 60 or 70 pages. The book is also NOT 800 pages long as some other reviews exaggerate.
The very complex mechanics of what they were doing is slowly laid out for us and we are at times as overwhelmed and in the dark as the parties having meetings and discussions are, but at other times we are allowed, thanks to Sorkin to be a bit smarter than the people in the meeting (because we know what the future is). And since we know what ultimately happens, we understand why some of the detail and quotes are particularly relevant. The inside view allowing us to see for ourselves how something like this got even worse AFTER problems and mistakes were discovered is invaluable at understanding how business and politics REALLY works.
For several hundred pages we are witnesses to a company that is scrambling desperately to stay alive and afloat as we watch Lehman Brothers CEO Richard S. Fuld Jr. negotiate and juggle people, information and resources to buy time and keep his company solvent, viable and attractive to possible buyers.
Some very smart men, made some very serious mistakes. Most are portrayed as having good intentions and some seem to be even honest and naïve, although some decisions seemed to be based on some portions of greed and ego.
There's a bit of optimism that having this knowledge and being able to put together a blow by blow re-cap of what happened behind the doors at several companies and in government offices will help prevent something like this from happening again-but I don't believe that. Unfortunately some people will just believe they will be better and more invincible at being able to dance through future mine-fields. Some do believe and with good reason that they are Too Big To Fail.
"You shouldn't assume it's correct just because Goldman said it. My brother works at Goldman, and he's an idiot!" Joseph Cassano former chief COO of AIG and former head of AIG Financial products unit.
"Take a step back. Just think about it for a minute, both from an internal as well as an external point of view. The guy's not good enough to run the company, but you're saying you're going to need to keep him around?" Former AIG chairman Bob Willumstad to HIS predecessor Martin Sullivan, who was attempting to stop the firing of Joseph Cassano.
CONS
Sorkin is a bit limited by his sources which are many and very impressive. However, he's also an insider in some ways, needing to carefully stay on the good sides of many people to continue to get information and permissions to use that information for his columns and books.
Because Sorkin concentrates mostly on a narrow period of time, he is able to bring us many day to day details, but he's not able to give us a strong big picture perspective (he wasn't attempting to). He is forced to let the things people said in meetings and in interviews to be the record on the subject. At times he humanizes some of the characters and takes some liberties by taking them at their word (based on various sources). We are still getting a compromised picture of what really happened of course, because in meetings and interviews, people only occasionally say what they really mean and politicians and high profile business executives are masters of manipulation if not outright deceit. The danger is the illusion that the detail conversations represent an almost exacting truth. It's the best we are going to get, but don't believe it all completely. And so you may ask, is all of this detail really necessary?
There is NOT a table of contents for the book. There are no footnotes that might be used to reveal some information that contradicts what some people say in meetings, such as when certain information was actually known by various people involved. There were a lot of people playing a high stakes poker game, with some bluffing going on, and we now know some bluffing was going on, but that is not integrated into the book for the most part.
No one is made to be a villain (which perhaps is a pro in a way too), and everyone seems to be working very hard to protect their shareholders and taxpayers --only once in while is an ornery or outright selfish comment uttered and it is clearly shown as a heat of the moment comment. Some of the people in the book (like Paulson) are allowed to defend themselves, while others either weren't given the opportunity or didn't take the opportunity to do so and come off a little worse for it than perhaps they should (Bernanke for instance).
PROS
Sorkin's writing is very clear and mostly concise and he builds up several of the major players as three dimensional characters giving us their histories and an idea about their personalities outside of the meetings, phone calls and interviews of 2008.
You don't have to have a deep knowledge of finance to read and understand this book. There also some lighter gossipy tidbits and revealing character quirks that make these people more human and ‘normal'. They sometimes add some humor to what is going on as well.
The research and resources Sorkin drew upon are very impressive. Most of the dialogue he uses can be traced back to other sources and he rarely seems to put words in people mouths even when he has to be doing a little bit of that to make conversations in meetings flow and read well on the page.
"I'm certain you'll spark a freakin' panic..." Timothy F. Geithner, previous president of the New York Federal Reserve, to Henry M. Paulson, regarding the public disclosing of his $700 billion bailout plan without letting Congressional leaders what the plan was...
"When I picked up my newspaper yesterday, I thought I woke up in France." Senator Jim Bunning to Henry M. Paulson after the Treasury tried to get authority to use tax payer money to invest in Fannie Mae and Freddie Mac.
MY FAVORITE PASSAGE FROM THE BOOK (SORT OF A SPOILER SINCE IT COMES FROM THE EPILOGUE-THOUGH IT REVEALS NO SURPRISES)
When the post-bailout debate was still at its highest pitch, Jamie Dimon sent Hank Paulson a note with a quote from a speech that President Theodore Roosevelt delivered at the Sorbonne in April 1910 entitled "Citizenship in a Republic. It reads:
It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and attain, because there is no effort without error or shortcoming but who knows the great enthusiasm, the great devotions who spends himself for a worthy cause; who, at the best, knows in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.
BOTTOM LINE
If you want to have a better understanding of what happened that led to biggest financial meltdown that Wall Street has ever had (since the Great Depression), Too Big To Fail is a must read. You'll get a clear understanding of what happened, why the Lehman bankruptcy happened and you'll meet some of the biggest and most powerful Wall Street and Washington D.C. regulators as well. Of course since the book focuses on September 2008 and we are now in 2011, a lot of the information is already well known and there isn't the kind of perspective that makes some of the details we get in this book seem particularly important to know.
Oh and Curtis Hanson is directing the HBO movie version of the book which should be premiering in 2012.
4 Stars. If you don't like detail subtract a star; if you really like detail; add a half star.
