Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis — and Themselves

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Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis — and Themselves

by Andrew Ross Sorkin

3.91 · rating details · 3,221 ratings · 562 reviews

A real-life thriller about the most tumultuous period in America's financial history by an acclaimed New York Times Reporter

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. From inside the corner office at Lehman Brothers to secret meeting...more

Hardcover, 600 pages

Published September 22nd 2009 by Viking Adult

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All the Devils are Here by Bethany McLean

Understanding the Financial Crisis 2008

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Jun 27, 2011

Petra X rated it

Shelves: 2011, x, 2011-5star-books, 2011-best-books

What the financial crisis in the US essentially came down to was the bankers had the government balls in a nice tight wrench and if those balls got gangrene and dropped off, leaving the whole of the Western world without a banking system and the ensuing anarchy, they couldn't care less because they were filthy rich anyway and would, personally, all of them be more than just all right. (Skip to the last-but-two paragraph if you don't want the lead-up to how).

How it works, in a simplif...more

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Sep 03, 2011

Kemper rated it

Shelves: 2011, non-fiction, politics, economics

"The only problem with capitalism is all the capitalists.”
Herbert Hoover

There’s a school of thought out there that many, if not most, people buy into. It goes something like this: The U.S. government is full of a bunch of stupid bureaucrats who do nothing but pass restrictive laws that keep businesses from making money and prevent the growth of the economy. Obviously, the businesses should be allowed to do their thing with no government interference because they know wh...more"The only problem with capitalism is all the capitalists.”
Herbert Hoover

There’s a school of thought out there that many, if not most, people buy into. It goes something like this: The U.S. government is full of a bunch of stupid bureaucrats who do nothing but pass restrictive laws that keep businesses from making money and prevent the growth of the economy. Obviously, the businesses should be allowed to do their thing with no government interference because they know what’s best, and if they should happen to step on their dicks, then they should just fail without the government trying to save them. To do anything else is socialism!

That’s a nice theory, but there’s a huge flaw with it. For the most part, a large business is made up of a bunch of short sighted people who will cut their own throats in the long term if it means making money next quarter. Don’t believe that? Enron. Worldcom. Tyco. AIG. Bear Stearns. Lehman Brothers. Etc. Etc. In 2001 and 2008 we saw what happens when someone doesn’t keep a close eye on the companies chasing the quick buck, and the accounting fraud of 2001 was only about ten years after the savings and loan scandals that cost the U.S. around $120 billion.

Where we really get into trouble is when these fucktards have been allowed to run amok, and then the chickens finally come home to roost. That’s when Joe or Jane Taxpayer, who a few years earlier were sitting there grumbling about the damn guvment keeping the businesses from earning an honest buck, will lose their goddamn minds over the possibility of the government providing cash to these companies to keep the entire economy from going into a death spin. They’d rather see their 401K shrink to a $1.76 rather than let those greedy bastards get a dime of taxpayer money! But no government regulation either!

So rather than holding our noses and spending $50 billion dollars to save Lehman Brothers and AIG and shore up a few other companies and then passing some sensible regulations to keep it from happening again, the government, fearing what Joe or Jane would say, tried to force a private sector solution and ultimately let Lehman go into bankruptcy. Yet after the first domino fell, the panic that spread would end up with the U.S. spending over $750 billion to try and stop another Great Depression.

This book does a great job of laying out the chaos and confusion that occurred and how we were all teetering on a brink that could have been far worse in 2008. Most of the book is just a straight retelling of the events with what the major players were thinking and what they did, but there’s a nice summary at the end that lays out what the author thinks about how it played out and does a fair job of assigning some blame.

A couple of things especially stuck out to me. When the Lehman Brothers execs realized that there would be no government bail out of them, several of them gave angry speeches denouncing the government for not doing more. I’m gonna go out on a limb and assume that a top executive at Lehman Brothers had probably been a hard core guvment-sux Republican up until the point they didn’t get a check. Oh, the irony.

The other thing that made me scratch my head was that these companies kept going back to billionaire Warren Buffet to try and get him to invest so they could raise capital. Buffett made a few half-hearted offers on things he thought he could turn a buck on. Late in the game, when TARP had been passed and the original plan was for the government to buy the toxic assets that were dragging down everyone, Buffet sent a letter to the secretary of the treasury where he laid out a plan that would have created a hybrid of a public and private company to buy up those assets, get a fair market value for them, take them off the troubled companies balance sheets and potentially provided a decent return on the tax payer money. Buffet even pledged to invest $100 million of his own money and help administer it. The plan was shelved when it was decided to invest capital in the banks, but out of all the schemes hatched over those desperate days, it seems like one of the more plausible ones.

So why in the name of Alexander Hamilton didn’t anyone ask Warren Buffett for a plan earlier? They all knew he’d been too smart to get involved in the mess that was dragging them all down. (One reading of a Lehman Brothers stock report that the industry had praised just weeks earlier convinced Buffett that he wouldn’t loan them any capital.) All of these companies tried to beg money off him, but no one asked him if he had any ideas to get them out of the mess. WTF?

Here’s the best part. It’s going to happen again. Think it can’t? There’s still been no meaningful regulations passed and I will bet a six-pack of Boulevard Pilsner that there will be yet another meltdown that will tank the economy and cost taxpayers huge before 2020. Any takers?(less)

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Oct 10, 2011

Lobstergirl rated it

Shelves: business-finance

The strength of Sorkin’s book, which covers the period right after the fall of Bear Stearns (March 2008), up to the TARP infusions of capital (October 2008), is that he synthesized masses of detailed information and assembled it into a chronological story, using multiple firsthand accounts, contemporaneous journalistic sources, and public records. You can imagine him flipping through his enormous Rolodex (an inapt 80s allusion, but I like the image), calling every Wall Streeter he’s ever spoken...moreThe strength of Sorkin’s book, which covers the period right after the fall of Bear Stearns (March 2008), up to the TARP infusions of capital (October 2008), is that he synthesized masses of detailed information and assembled it into a chronological story, using multiple firsthand accounts, contemporaneous journalistic sources, and public records. You can imagine him flipping through his enormous Rolodex (an inapt 80s allusion, but I like the image), calling every Wall Streeter he’s ever spoken to since his intern days. He goes inside Lehman CFO Erin Callan’s head (and real estate records) to find out that she borrowed $5 million on a $6.48 million condo at 15 Central Park West, designed by Robert A.M. Stern. We see the suspicious question marks circling in Warren Buffett's head as he talks with Lehman CEO Dick Fuld about possibly buying a stake in Lehman. We get Jim Cramer's point of view on a meeting with Fuld and Callan about short sellers: Fuld is hoping Cramer will talk bullish about Lehman on CNBC, but Cramer doesn't trust what they're telling him. Morgan Stanley, tasked with examining Fannie Mae and Freddie Mac’s enormous mortgage portfolios to determine how bad the damage is, ships all the data to....India, where Morgan Stanley has an “analytic center.” 1,300 employees there will pore over it. Apparently Sorkin is talking about hard copies here.

The weakness of the book is that it’s as if the entire crisis of 2008 unfolded in a vacuum, divorced from the enormous real estate bubble, mortgage frauds, toxic assets, complex derivatives, deregulation, and banker greed that caused it. Sorkin never explains the origins of the crisis in financial or macroeconomic terms, aside from the briefest sentence here and there. The securitization of mortgages, and collateralized debt obligations (CDOs), are explained in less than two pages (of a 600 page book). There are so many trees here, and we spend so much time examining bark and leaves, that I wouldn’t be surprised if many readers had no idea what the forest itself looked like. The degree of detail is about as granular and exhaustive as it gets; I think Sorkin explored every phone call, landline or cellular, that every Wall Street executive made or took during the crisis. When the executives go to their favorite restaurant, San Pietro, we find out what they ate. Sorkin never fails to tell us whether someone lands at Teterboro Airport, or Westchester.

There are juicy quotes, and some juicy gossip. We find out who hated whom. Who thinks who is really stupid. (No one thought SEC chair Christopher Cox was up to the job, and Citigroup’s Vikram Pandit doesn’t shine as luminously as some of the other bulbs.) John Thain is greedy as all get-out. Tim Geithner has six-pack abs. Hank Paulson calls his penis Herman (p. 346), which I wish I didn’t now know. At the height of the crisis Geithner was so intent on having banks merge (to solve their liquidity problems) that some CEOs began referring to him as “eHarmony.” Geithner can’t stand FDIC chairwoman Sheila Bair, who he thinks is a media grandstander, and he subtly mocks her on a conference call. At a tense emergency meeting between the Bush cabinet and Congressional leaders on the TARP plan, arguments, shouting and finger-pointing erupt; Dick Cheney watches silently, smiling.

If you actually want to know what the financial crisis was, and why it happened, read Bethany McLean’s book All the Devils are Here: The Hidden History of the Financial Crisis. Unlike Sorkin, McLean is an investigative business journalist. She tells a great story, and she underpins it thoroughly with nuts-and-bolts explanations.
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Jan 25, 2012

Tim Wade rated it

This is a fast-paced expose on the behind-the-scenes negotiations during the financial meltdown in late 2008. Very entertaining as it highlights the intensity when political pressure meets economics.

Details: I enjoyed how the story compared and tracked the behavior of all the big egos in the room. Not only was this a pressure-packed scenario, but as the economy continue to deteriorate, there was no game plan. I was actually impressed by how our leaders made it up as they went alon...more

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Dec 02, 2011

Kerry rated it

Shelves: business, nonfiction

I don't know if it's fair to rate the book based on the first few chapters that I read, but I know that my rating is going to be the same IF I did finish it. I just can't. This is NOT a book about the financial meltdown -- if you want something that explains the crisis, you are better off reading Wikipedia (seriously!). This, however, seems more fiction than nonfiction. Seriously? Was the author there in the boardroom when the investment bankers and traders barked to each other frantically to sa...more

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Aug 29, 2011

Sydney rated it

Bravo to Andrew Ross Sorkin. A book that could have been steeped in excruciating economic/financial detail, with bankers and government officials offering self-serving recounts of their roles, instead reads like a novel. Sorkin has masterfully captured defining moments in the 2008 financial crisis and retold them in a way that is clear. I suspect even those without business backgrounds would find this true.

Portions of the book reminded me of the market chaos and fear about their re...more

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Aug 03, 2011

Edward rated it

A very detailed insider look at the events in Washington and Wall Street that culminated with the bankrupcy of Lehman Brothers, the nationalization of Fannie Mae and Freddie Mac, the rescue of AIG, and the TARP program.

Secretary of the Treasury Hank Paulson more-or-less comes out the hero, with strong contributions by Fed Chairman Ben Bernanke, and NY Fed Chairman Timothy Geitner.

The book leads you to the conclusion that the "geniuses" of Wall Street aren't as ...more

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Jul 31, 2011

Vandita rated it

Shelves: finance

Probably the most definitive, comprehensive and engaging behind the scenes, account of how the financial crisis exploded the financial system in the Western world in 2008. Andrew Sorkin - the multi award winning, reputed journalist of the New York Times - has used his unprecedented access to all the players concerned (be it Treasury, FED, all Wall street Banks, law firms and deal makers) - to recreate the drama and the tension behind some of the most significant decisions taken by these players ...more

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Jun 04, 2011

Mitch rated it

Shelves: non-fiction, kindle

I am not a big reader of "current events" books, and so I was perhaps naviely surprised by the fact that this was quite a page-turner, something closer to Dan Brown than an explanation of the complex world of Wall Street finance. The book covers the period between the collapse of Bear Stearns (March 2008) and the climactic moment when the nine largest financials institutions in the US were forced to accept equity investments from the government (October 2008 - wow! not long).

...more

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May 14, 2011

David rated it

Shelves: read-econbiz

Anatopism.

This is the new word I learned from listening to this book on unabridged audio download. It does not actually appear in this book, but some examples of anatopism appear in this book, so, when I happened to run across it in another context, I stopped what I was doing and wrote it down, because here no other word will do.

Anatopism, according to Wikipedia, is “something that is out of its proper place.” It is analogous to anachronism, with anachronism referring to ...moreAnatopism.

This is the new word I learned from listening to this book on unabridged audio download. It does not actually appear in this book, but some examples of anatopism appear in this book, so, when I happened to run across it in another context, I stopped what I was doing and wrote it down, because here no other word will do.

Anatopism, according to Wikipedia, is “something that is out of its proper place.” It is analogous to anachronism, with anachronism referring to some object that is out of its proper place in time, like bicycles in ancient Rome. Anatopism refers to something that is out of its proper place in space. (It is also discussed in the 2 May 2011 edition of the podcast “A Way With Words”.) Examples from this book follow:

This download comes in three parts, running about 21 hours total. In the first part, at audio (not print) chapter 5, time 35:33, the author states that Canary Wharf is located in “the Square Mile”. It is not. “The Square Mile” is a nickname for the City of London. Canary Whart is not located in the City of London. If I can check this fact in less than 60 seconds, it should probably take an author or editor less.

In the second part, at audio chapter 5, time 24:08, the author says that 601 Pennsylvania Avenue in Washington DC is northwest of the White House. There are two 601 Pennsylvania Avenues in Washington DC. Both of them are southeast of the White House.

Elsewhere, the author says that the White House Situation Room is in the basement of the White House. This is true in Wikipedia and in Tom Clancy novels, but much of the actual WHSR is actually above-ground. Since I could not establish inarguably that all of the WHSR is above-ground, the author gets a “get out of jail free” pass on this one.

This game of authorial “gotcha” may seem tedious, but this is supposed to be a non-fiction book relating one of the important events in recent memory. The author should have his facts right. I cannot check that the multitude of dates and places of meetings, names of participants in those meetings, conversations recounted verbatim, and people's interior thoughts are all portrayed correctly in this book. But I can base my opinion on the accuracy of facts that I am able to check.

However, since, unlike geographical locations, human beings can sue for libel and/or publicly humiliate an author, perhaps Sorkin paid greater attention to his characters than to his places. Assuming this is so, this second draft of history provides a thorough refutation of a narrative currently being trafficked by those on the political left and right in the USA who would like us to believe that the financial crisis was a result of a bunch of villains, twirling their mustaches in evil glee because they knew that the taxpayer would foot the bill for their greed. This is clearly not the case, not because the Wall Street Fat Cats were pillars of virtue or even well-meaning doofuses, but because most of the authors of the housing bubble were so deeply into clueless denial that they never seriously considered the possibility of failing and its consequences until it was far, far too late.

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Apr 16, 2011

Kartik rated it

The tag 'Master Storyteller', should be applied to Andrew Ross Sorkin for this piece of work. It has been a while since a book captured my attention so well as this one did.

Sorkin is able to cover the 'history' of the financial crisis in a good amount of depth, switch back and forth between the different 'stages' and bring out the personalities of the key players such as the investment bank CEOs, the NY Fed and the Treasury while at the same time providing enough information about th...more

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Apr 13, 2011

Unnati rated it

Sitting over at Novotel bar, sipping my wine , I was deep in conversation with S' cousin who happened to be an upcoming lawyer from Australia . First I was smitten by the accent and next by his infectious enthusiasm. The conversation soon drifted books and he mentioned the book "Too Big to Fail", a book about the recent financial crises. Since then I kept contemplating about picking up the book on my kindle . But the Kindle price showed an astounding price of $ 22. (where I could get o...more

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Mar 15, 2011

Qi Zeng rated it

An excellent chronicle of the fiasco of 2008. This is a sympathetic group portrait of the major players in the financial crisis. Their failures and success are not as important as their desperate efforts to avert something catastrophic. One should always be reminded of the excellent quote in the end of the book by Theodore Roosevelt's speech in Sorbonne in 1910:

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds co...more

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Feb 12, 2011

Andrew rated it

Excellent chronological narrative written by the well-connected NYT Wall street reporter Andrew Ross Sorkin. The level of detail in this book is unbelievably solid and captures the emotion, panic, and gravity of the events that unfolded in mid-2008. The book outlines the events that took place from the time Bear Stearns was sold to JP Morgan with government intervention for $2 "a fucking share" to the passage of the Troubled Assets Relief Program (TARP).

The book shines a sym...moreExcellent chronological narrative written by the well-connected NYT Wall street reporter Andrew Ross Sorkin. The level of detail in this book is unbelievably solid and captures the emotion, panic, and gravity of the events that unfolded in mid-2008. The book outlines the events that took place from the time Bear Stearns was sold to JP Morgan with government intervention for $2 "a fucking share" to the passage of the Troubled Assets Relief Program (TARP).

The book shines a sympathetic light on the team that saved the world economy from collapse: Paulson, Geithner, and Bernanke. One forgets so quickly how grave the situation was (I mean no one notices the catastrophe that never happened) and media reports easily caricatured Paulson as a former Goldman CEO just looking out for his former friends, but in fact, the book captured the numerous difficult, on-the-fly decisions that he had to make as Treasury Secretary to bring the economy back from the brink of collapse. Paulson left a very successful private life to become a public servant and steered the financial markets from collapse in spite of criticism hoisted from all sides of the political spectrum. At one point when TARP negotiations were about to collapse, he publicly got on one knee and urged Speaker Nancy Pelosi to keep working on the package. He could have easily kicked the can to his successor, but he went headstrong to tackle the problem, and even as a lifelong liberal, I am glad that this story of public service was told by Sorkin.

Sorkin gives a unique glimpse into the day to day inner-workings and deal-making on Wall Street. What he only mentions, but does not characterize, well are the short-sellers, which are featured well with Michael Lewis's The Big Short. In the end, the short-sellers recognized a golden opportunity while the rest of the industry was blind to the upcoming bust of mortgage-backed securities. They did what any rational investor would do, even though it did contribute to the financial distress of the period.

All in all, a fantastic, eye-opening read. Bravo to Sorkin for telling this remarkable story. (less)

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Feb 06, 2011

Johnsergeant rated it

Shelves: current-affairs, audiobook, audiblecom, history

Narrated by William Hughes

21 hrs and 3 mins

Publisher's Summary

The Inside Story of How Wall Street and Washington Fought to Save the Financial System - and Themselves
A real-life thriller about the most tumultuous period in America's financial history by an acclaimed New York Times reporter. 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 globa...more

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Jan 15, 2011

Adrian rated it

This review has been hidden because it contains spoilers. To view it, click here.

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Dec 20, 2010

Matthew rated it

Ultimately informative and very readable but Sorkin indicts himself several times on what he chose to educate himself on regarding the situation and what he skimmed. He's ultimately fascinated by the dealmaking aspect of this story, but appears to have given himself a shallow education as to why these firms fell. 'Too Big To Fail' came out before Michael Lewis better explained the horrible bet that firms like Lehman, Merrill, AIG, among others were on the wrong side of to put the market in 200...moreUltimately informative and very readable but Sorkin indicts himself several times on what he chose to educate himself on regarding the situation and what he skimmed. He's ultimately fascinated by the dealmaking aspect of this story, but appears to have given himself a shallow education as to why these firms fell. 'Too Big To Fail' came out before Michael Lewis better explained the horrible bet that firms like Lehman, Merrill, AIG, among others were on the wrong side of to put the market in 2008's quagmire. Because of this, the common memes as to why 2008 was a disaster due to short interest rumor-mongering are all over this book which is essentially the same babble that makes CNBC mostly useless noise. I think this book also has a challenge to age well because Sorkin goes to lengths to make Dick Fuld of Lehman Brothers a sympathetic character whose downfall was his loyalty and a ruthless shorting market. The truth is closer to the fact that he made several hiring errors, was out of the loop with the holding of his company, and refused to educate himself on WHY the shorts eventually did the company in. Hank Paulson is given an easy portrayal as well. I cannot imagine what this time must have been like for him, but making the original TARP proposal 3 pages long with practically no oversight provisions on Treasury 's authority was a major moment of mental fatigue. Missteps had to be factored in when critiquing Paulson's handling of the crisis, but Sorkin's longing to make Paulson sympathetic gets in the way of an accurate portrayal.

Nevertheless, this book is well worthwhile if you'd like to know much about the government's relationship and dynamics with Wall Street. It was especially worthwhile for me as I worked for Bank of America in 2008 and feared for my job after the Merrill merger. In addition, I work for Allianz now and it was entertaining to read about their nearly ridiculous low-ball offer for AIG. I could only reccommend it if you already have an understanding of what happened through other texts and research because I think I'd be lost if I didn't already have an understanding. (less)

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Nov 20, 2010

Bill Preston rated it

· review of another edition

I finally got around to picking this up after seeing Sorkin on Mahr a couple of times. Like much of "main street" America I felt the outrage that so many of the "fatcat bankers" of Wall Street came out of the recent financial meltdown richer than ever thanks to the government bailout. I was hoping to give my outrage a bit better foundation and understanding through Sorkin's account of the whole dramatic series of events that led up to the invention of TARP. The book provide...more

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Nov 20, 2010

Tony rated it

I was very disappointed by this book. Have read and been riveted by "Lords of Finance" which dealt with the first great global depression, I was expecting a similarly lucid exposition of the current crisis. Maybe that was not his brief, but nontheless, I would have appreciated more historical context. Instead I was besieged with mind-numbing details that were not central to the thrust of the narrative. I didn't need to know that at some meeting the participants were treating themselves...more

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Nov 18, 2010

Mac rated it

A play-by-play of the days leading up to and shortly after the financial crisis, centered largely around the bankruptcy of Lehman Brothers and climaxing with the TARP program. Unlike Michael Lewis, who drew a fascinating and engaging story out of the short-sellers who made a bundle when the building fell down, Sorkin tries to tell "the" story of the crisis in a narrative form. I'm not sure I'm on board with that, considering how close he sets the point-of-view, but it's become a comm...more

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Nov 13, 2010

Jim Mcgregor rated it

Shelves: business

A blistering, educational expose of the scandalous collapse of capitalism and how America became a socialist state. As far as I am concerned anyway. This fitted the cliche of "read like a thriller" and managed to pass on the sense of urgency and panic as the system headed toward meltdown and the Government had to bang heads together to force a solution. The original government position of "there will be no bailouts for Wall Street" saw Lehman thrown to the wolves and it becam...more

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Sep 27, 2010

Rick rated it

Shelves: non-fiction

Too Big to Fail is a strong inside chronicle of the financial crisis that nearly brought about a second Great Depression in 2008 and, as the sub-title suggests, almost destroyed the international financial system. Informative, if not insightful; compelling, if not illuminating, it’s a human drama with no maverick heroes, just venal and unquestioning banking and investment bureaucrats—bureaucrats who inflate their own worth and reward their inflated value like drunken sailors paying each other fo...moreToo Big to Fail is a strong inside chronicle of the financial crisis that nearly brought about a second Great Depression in 2008 and, as the sub-title suggests, almost destroyed the international financial system. Informative, if not insightful; compelling, if not illuminating, it’s a human drama with no maverick heroes, just venal and unquestioning banking and investment bureaucrats—bureaucrats who inflate their own worth and reward their inflated value like drunken sailors paying each other for the pleasure of pleasuring themselves.

At various points they try to do good deeds that aren’t directly self-serving, efforts to save tottering companies for the good of the system and the country but even then they at the least get indirect benefits and, in some cases, direct ones such as fees and protections against the risks they’re taking on. But they also get the bigger benefit of a rescued system that still depends on these engineers of disaster, who remain the only humans (I leave hypothetical room for the magic number of monkeys with keyboards and calculators who might randomly replicate this masterpiece of failure) who know how the damn machine works. Murray Kempton made that point brilliantly in a column about the 1989 prequel to this mess when he compared MBAs to Eastern European Communist Party bureaucrats, both pampered squires of corrupt systems. Prevent the machine from collapsing and you save these men (almost always men and almost always white men) and their careers.

Secretary Paulson (one of these men, part of Government Sachs, the phrase used to describe the prevalence of Goldman Sachs alums in watchdog positions, not to mention in the executive suites of rival companies) had little choice because the mansion of privilege and greed that would collapse would have taken many, many other institutions and ordinary middle class and working families down with them. There are few signs that these gentlemen get it at all and then only when things are at their absolute bleakest for them personally. “Dimon was mulling over the day’s events, realizing how bad it was out there. ‘They want Wall Street to pay,’ he told the room of bankers relaxing after their late dinners, hoping to get them to appreciate the political pressure that Paulson was facing. ‘They think we’re overpaid assholes.” Duh! Even here a key modifier is missing. They are overpaid, incestuous assholes. At one point, when the Fed is trying to save AIG with the help of J.P. Morgan, who had actually been hired by AIG to help advise them in their perilous situation, AIG’s boss confronts one of J.P. Morgan’s bosses with a simple question, “we need to know which hat you’re wearing. Are you working for us, the Fed, or J.P. Morgan?” The answer? “I don’t think I can answer that question without talking to my lawyer.”

Sorkin did tremendous research to augment the deep knowledge that came from covering these events for The New York Times and he presents the complex narrative with its scores of institutions and cast of thousands with clarity and directness. It reads like fiction but the nightmare reality is that it’s not.(less)

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Aug 24, 2010

Jen rated it

It's a behemoth of a book for a behemoth of a crisis. All 539 pages are filled with details about how the big bank leaders, managers, and Federal Reserve handled (might be "handled" for some) the financial meltdown of 2008.

An underlying part of the policies enacted, such as TARP, relies heavily on relationships between the cast of characters, if you will. Many of these individuals went to school together, worked together at one or more investment banking companies, or were...more

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Jul 28, 2010

Ashle rated it

· review of another edition

This was a fascinating audio book and considerably shortened many a morning commute. But it was a little unmanageable in this format given its length and the constant rotation in and out of the narrative of a large number of characters. It might work better on paper, with an index and the ability to flip back and forth to keep track of everyone.

Other than the format issue, my main criticism of the book is its accuracy. Sorkin recounts conversations at a level of detail that is hard ...more

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Jul 25, 2010

Stella rated it

I enjoy reading Andrew Ross Sorkin's columns in the business section of the NYT but this book was a very rough first draft of history, as they say. He describes in mind-numbing detail who said what to whom during the crisis days of Fall 2008, particularly Henry Paulsen and Jamie Dimon, whom I assume talked extensively to him. You get the impression that the crisis was managed, if that is the right word, by Timothy Geithner and Hank Paulsen, with little or no mention of the president in the Whi...moreI enjoy reading Andrew Ross Sorkin's columns in the business section of the NYT but this book was a very rough first draft of history, as they say. He describes in mind-numbing detail who said what to whom during the crisis days of Fall 2008, particularly Henry Paulsen and Jamie Dimon, whom I assume talked extensively to him. You get the impression that the crisis was managed, if that is the right word, by Timothy Geithner and Hank Paulsen, with little or no mention of the president in the White House, George Bush. Reading it does not inspire confidence in the financial system or its minders, I was left with the impression that we would be better off with the barter system, if only it were not so cumbersome.

Paulsen and Geithner flew the plane by the seat of their pants. They stumbled around from day to day trying to bang heads together and to get this financial behemoth to take over that other shakier one. The president was informed later of what was going on and everything was surrounded by fog, rumor, innuendo and personality clashes. I don't know a whole lot about high finance but I really put down this book thinking that not too many other people do either, including those whose job it is to know. As in the Lords of Finance, a most readable account of the 1910's and 1920's, so much is unpredictable, the political situation changes all the time, no one knows what the other people are doing, national pride is involved.

Sorkin's book is much less readable than Ahmeds', probably partly because he rushed into print to get in his version of the first draft. He does not seem to have had great input from Goldman Sachs. JP Morgan Chase appears to have been one of his chief sources of insider info, and he talks so much about Jamie Dimon that you imagine he must have had a lot of access to him. LIkewise Paulsen and Geithner.

I want someone to write a considered book about what went wrong with the world in 2008 and how we could prevent it from happening again. This is not that book, he never even tries to talk about why, just about the day-to-day stuff. There is no retrospection, no wondering why. It will probably be useful to someone ten or twenty years from now who is trying to write such a book.(less)

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Jun 17, 2010

Frank Stein rated it

This came recommended as the best description of the financial crisis yet written, and it largely lives up to the hype. It's a Woodward-style, anonymous-interview narrative that relates an almost daily description of the crisis from the fall of Bear Stearns to the passage of the TARP act and the injection of capital into the 9 major US banks (when, as one of Paulson's aides said, the government had "crossed the Rubicon"). Overall it's a great glimpse into how banks and the gove...more
This came recommended as the best description of the financial crisis yet written, and it largely lives up to the hype. It's a Woodward-style, anonymous-interview narrative that relates an almost daily description of the crisis from the fall of Bear Stearns to the passage of the TARP act and the injection of capital into the 9 major US banks (when, as one of Paulson's aides said, the government had "crossed the Rubicon"). Overall it's a great glimpse into how banks and the government operated in a time of unparalleled crisis.

One of the first things that struck me in the book was how important relations with the press were at every point in the story. From Erin Callan's successful justification of Lehman's first-quarter earnings in 2008, to the attempt by Dick Fuld to enlist Jim Cranmer in an anti-short movement (in exchange for supporting Cramer's personal crusade for the SEC's old "uptick rule), to the constant search for back doors and remote apartments to host merger meetings where executives wouldn't be mobbed by reporters, concern with managing public perception was paramount throughout. Reporters could determine if a stock price flew or sank, or if the government got slammed or praised for supposedly assisting certain companies (everyone, from Paulson to Warren Buffet, was worried about countering the "Government Sachs" perceptions). While company CFOs and directors seemed to focus on accounting, the story focuses on those CEOs like Dick Fuld who spent most of their time watching CNBC and dealing with the press and other investors.

The greatest revelation from the book, though, is that Barclay's of London was just about to buy Lehman Brothers and possibly avert the whole meltdown just days before the bank collapsed, when the British Financial Services Authority quashed the deal on worries that Lehman's bad assets would drag down the banking system over there. I'm surprised in fact that the Brits haven't got more flack in the press for that move. Who knows if the global economy could have steered clear of the cliff if someone at the FSA hadn't decided to step in late in the game and ruin everything.

There are a few problems with the book. The author, Andrew Ross Sorkin, is the young mergers and acquisitions reporter for the New York Times, and consequently in his telling it sometimes seems like the whole crisis was just one long merger bonanza. Certainly government encouragement of mergers to salvage the banks' balance sheets was an important part of the story, but other issues get ignored with this focus. At times, too, the book drags down in merger minutae, and it becomes difficult to remember whether Lehman is trying to merge with Bank of America while JP Morgan tries to merge with Merrill Lynch or vice versa, since partners and deals switch so often.

Overall though, the book is fast-paced and focuses on the real human drama that sometimes got lost amid news reports about CDOs and sub-prime assets. One of my favorite moments is when the head bankers are called to the New York Fed to organize a Lehman bailout, but they soon realize the accountants are doing most of the work while they're basically locked up there by the government, so they decide to hold an impromptu Brick-Breaker competition on their Blackberries (while Rome, of course, continued to burn).

Sorkin seems to have interviewed almost everybody involved in the bailouts and he manages to capture the key moments with verve. This probably is the best behind-the-scenes account of the crisis we'll ever get. It makes for a great read. (less)

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May 22, 2010

Kristine rated it

This book is not too big to read, or even too big to enjoy, provided that you are a reader who wants to be reading the book that is, rather than a long list of possible alternative books about the severest financial crisis since our Great Depression. This book is a reportorial non-fiction style book with a dash of fiction-like drama that is low on the "why" and heavy on the "who" and "who said and did what when." That part is done fairly successfully, although re...more

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May 02, 2010

Guy Posts rated it

This review has been hidden because it contains spoilers. To view it, click here. It's a phenomenally difficult task to value an investment bank— a firm whose value largely derives from trust. When trust flows easily across all counter-parties, the system is efficient at moving capital from where it's needed least to where it's wanted most. When trust begins to dry up, the entire system implodes under the weight of broken commitments.

Sorkin's book avoids causes in favor of documenting decisions. "This extraordinary time," he writes, "has left us wit...moreIt's a phenomenally difficult task to value an investment bank— a firm whose value largely derives from trust. When trust flows easily across all counter-parties, the system is efficient at moving capital from where it's needed least to where it's wanted most. When trust begins to dry up, the entire system implodes under the weight of broken commitments.

Sorkin's book avoids causes in favor of documenting decisions. "This extraordinary time," he writes, "has left us with a giant puzzle—a mystery, really—that still needs to be solved, so we can learn from our mistakes. This book is an effort to begin putting the pieces together"

While accounts like The Greatest Trade Ever focus in on a small microcosm of the financial world, Too Big Too Fail attempts to portray the entire, fluid, global financial landscape— the one that Henry Paulson, Tim Geithner, and Ben Bernanke had to make sense of.

The book is laden with facts and events—it seems that no one sleeps, and Sorkin suggests that key players like Paulson caught maybe an hour or two a day for an entire week. With no down time, the book is successfully confusing— it captures the uncertainty of the situation. Key players were reacting to information as it came in without time to digest it. As a result, there isn't much time for editorializing on the crisis. In one passage Paulson is asked by President Bush, "How did this happen?" Sorkin could have used this as a spring board into the different theories of why, but he cuts it short:

"Paulson disregarded the question, knowing that the answer would be way too long and lay in a heady mix of nearly a decade of overly lax regulation—some of which he had pushed for himself—overzealous bankers, and home owners living beyond their means."

Sorkin highlights the fluidity of the decision making. Did AIG need 20 billion, 40 billion, or 100 billion? Did they need it next week, or two hours ago? Over reacting could create an unnecessary level of panic that could cause conditions to further weaken. It was a problem with no easily definable answers. The best anyone could offer was their best guess. Their best guess.

Guesses which so far have turned out to be the correct ones. By taking quick, decisive action, Bernanke, Paulson, and Geithner put themselves out ahead of Euro-zone countries which are beginning to realize they too must take decisive action to rescue their systems. The dollar gaining strength against the Euro couldn't come at a more perfect time—a stronger dollar accompanying economic expansion spells out recovery for not just the United States, but countries expecting to be repaid in dollars. Trust is trickling back into the system, in consequence, restoring confidence and catalyzing investment.(less)

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Apr 15, 2010

Jack rated it

Well written and really, really detailed, sometimes to the point of feeling like a slog. I occasionally regretted the lack of analysis given that the author clearly knows his stuff, but in an issue as politically loaded as the financial collapse, it's also nice to just have a narrative account that is trying to describe the specific actions. It's also rather fascinating to see how various people responded to the astonishing pressure they were under, whether their problems were of their own mak...more

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Apr 09, 2010

Kathy Scantle rated it

I chose this book so I would have a better understanding of what caused the near fatal collapse of our economy in 2008. The book, however, does not go into the causes of the collapse. Rather it dwells on the chronology of events leading to the collapse and the US government's attempt to stabilize our financial systems.

The book begins with descriptions of CEOs compensations, such as being flown to work in Manhatten every day via helicopter from Long Island, credenzas for the office...more

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About Andrew Ross Sorkin

Andrew Ross Sorkin is The New York Timess chief mergers and acquisitions reporter and a columnist. Mr. Sorkin, a leading voice about Wall Street and corporate America, is also the editor of DealBook (nytimes.com/dealbook), an online daily financial report he started in 2001. In addition, Mr. Sorkin is an assistant editor of business and finance news, helping guide and shape the papers coverage.

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“While the financial crisis destroyed careers and reputations, and left many more bruised and battered, it also left the survivors with a genuine sense of invulnerability at having made it back from the brink. Still missing in the current environment is a genuine sense of humility.” — 1 person liked it

“There are no atheists in foxholes or ideologues in a financial crisis. Ben Bernanke” — 1 person liked it

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