13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
I don't know why I keep reading about the financial crisis of 2008, it just makes me angry. Anyway, this is a one of the several good books I've read on the subject. It has a longer term focus than some, including a section on the history of banking in the United Staes since the founding of the republic, and doesn't give a blow by blow description of what happened in the week that Lehman brothers failed. Rather, it is more about how the banks and the regulatory system got into this fix in the f...more
“Banking institutions are more dangerous than standing armies.” - Thomas Jefferson
“Like all businesses, banks needed to invent new products that were not yet commoditized and could command hi ...more
"the core function of finance is financial intermediation -- moving money from a place where it is currently not needed to a place where it is needed. The key questions for for any financial innovation are whether it increases financial intermediation and whether that is a good thing." (continues to talk about "innovations" in credit cards mostly being ways of making pricing more complex)
"much of the positive effect of homeownership is due not to owner ...more
According to the authors of 13 bankers the answer to both questions is a resounding, "No!" Kwak and Johnson are well known in financial circles for their highly influential blog, the Baseline Scenario. The authors clearly detail the causes behind the global financial credit crisis which has persisted since 2008. To the authors, the primary reason for the crisis can be traced to the poli ...more
Unlike most books that explore the 2008 financial collapse, this book looks back to the political viewpoints of Jefferson and Hamilton. In a nutshell, Jefferson didn’t trust big government. In addition to that, he didn’t trust any highly centralized power and this included the banks. In contrast, Hamilton did trust a ...more
The book starts with the origin of modern banking in the United States, dating back to the late 18th century and the First Bank of the United States, and henceforth goes on to narrate the influential role that finance would come to play in the future; the contrastin ...more
They contend that too big to fail banks simultaneously pose too much systemic to the economy AND have too much political sway to make effective regulation and oversight possible. This is very much in line with the views of Nobel Prize winners Joseph Stiglitz and Paul Krug ...more
The United States is ruled by an oligarchy that, despite almost wrecking the world economy, has only grown more powerful and more resistant to change. Perched atop this structure are 13 bankers who are involved with the six mega-banks (Bank of America, JPMorgan, Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley) that have been rendered “too big too fail”. How did this h ...more
Johnson approaches the U.S. financial crisis from the point of view of a former Chief Economist of the IMF. That perspective allows him to see the irony of how the U.S. and the IMF advised East Asian countrie ...more
- financial bubbles, moral hazard, systemic risk
- massive misallocation of talent
- rising social and economic inequity and the gutting of the middle class
- a new golden age of greedy self-regard, the 1980s till now
This is all quite right, more or less -- but 13 Bankers suggests that there is more: a financial sector that's "too big to fail" is a threat to our liberty. ...more
I read Simon Johnson and James Kwak's 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown, which is a very good, albeit repetitive (in the sense that they repeat certain points over and over), overview of the 2008 economic crash, focusing on the problem of having a small number of financial institutions that are "too big to fail." It is not a fun read, particularly since the recently passed financial reform addresses the problem only ...more
This author appears to have a much better sense of the regulatory environment than any of the other book ...more
Bill Clinton – balanced budget; home ownership; Goldman Sachs in his administration.
George W Bush – Iraq War; Afghanistan War; financial meltdown; more Goldman Sachs.
Barak Obama – T.A.R.P.; financial bail out; more Goldman Sachs.
DEregulation and DErivatives = DEpressed economy!
(This is the text version of a diagram I sketched in my paper Book Lust Journal, and this is also the last post to be transferred from that journal to here!)
Banks took crazy ris ...more