All the Devils are Here: The Hidden History of the Financial Crisis by Bethany McLean

Apr 11, 2012 Trudi rated it 4 of 5 stars · review of another edition

Shelves: non-fiction, audiobook, thinky-books, 2012-reads

Shakespeare wrote: Hell is empty, and all the Devils are here. I'm going to zombify this sentiment just a tad by saying what I know to be true: There is no more room in Hell, and the Devils now walk the earth. Oh yes...they do. Is there any doubt? Little ones and big ones, all spread out like an infection. And if there's a cure to wiping them off the face of the planet and sending them back to Hell it's yet to be implemented because apparently it takes balls and brains and a pretty reliable mora...more

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Feb 06, 2011 Jean rated it 5 of 5 stars

Shelves: non-fiction

Along with Michael Lewis' "The Big Short" this is a must-read if you want to understand the recent financial crisis. The authors also did "The Smartest Guys in the Room" about the Enron scandal, and I found that book both enlightening and interesting. The story paints a picture of a true financial bubble. Anyway, maybe I finally understand CDOs and derivatives. Maybe.
It's a chilling story, and I found myself horrified many times. The worst was reading about synthetic CDO's, which were like zomb...more Along with Michael Lewis' "The Big Short" this is a must-read if you want to understand the recent financial crisis. The authors also did "The Smartest Guys in the Room" about the Enron scandal, and I found that book both enlightening and interesting. The story paints a picture of a true financial bubble. Anyway, maybe I finally understand CDOs and derivatives. Maybe.
It's a chilling story, and I found myself horrified many times. The worst was reading about synthetic CDO's, which were like zombie derivatives. They were derivatives of derivatives and allowed investors to either go long (betting the product would increase in value) or short (betting it would go down). Unbelievable.
The biggest thing I learned was "don't trust anyone." These guys were constantly saying, "everything's all right" when they knew or should have known, it wasn't. And, worse yet, none of this stuff was illegal. It just wasn't regulated.

The story jumps around a bit, introducing players and situations in different companies and organizations as it works toward the inevitable crash. Several thoughts from my reading:
1. The whole situation was a "boiled frog" one. It kept building little by little. No one got caught, so they kept doing more and more bad stuff.
2. This was a failure of regulation. Shame on Greenspan, who didn't believe in any regulation, ever. And this is one time Congress should have stepped in, but they were convinced by the financial people that they knew what they were doing. How do you know a financial person is lying? His lips are moving.
3. Bubbles happen. They've been going on since tulips in Holland in the 1700s. This bubble never looks like the last one, so we don't believe they will happen this time. One very important comment was that they happen when "greed overcomes fear." Good point, well illustrated in the book.
4. I kept thinking, "How in the world could the average investor have known what was going to happen?" I do know several people who pulled out just before the crash, but they are in the minority. Most of us lost at least 30% of our savings.

I'm heading toward the finish but wanted to share my thoughts. If you really want to know what happened, this is the book to read. Don't worry; it's really interesting as well as informative.(less)

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Oct 04, 2011 !Tæmbuŝu marked it as to-read

Shelves: business-n-finance, current-affairs, ebook-available

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Reviewed by The Washington Post

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Mar 25, 2013 Guy rated it 3 of 5 stars

I was ready to find evidence to support a deep hate of everyone involved with the financial crisis. That is certainly here, however, after getting through the whole thing and spending some time reflecting on it and trying to figure out what my review and recommendation would be, I came to a surprising conclusion. Added to my expected frustration with people who wrecked the world economy with no thought to anything but themselves, was a level of tolerance for their actions that I never expected....more I was ready to find evidence to support a deep hate of everyone involved with the financial crisis. That is certainly here, however, after getting through the whole thing and spending some time reflecting on it and trying to figure out what my review and recommendation would be, I came to a surprising conclusion. Added to my expected frustration with people who wrecked the world economy with no thought to anything but themselves, was a level of tolerance for their actions that I never expected.
Many people involved with this scenario behaved as greedily as you would expect. My reflection on who should "pay", how painfully and publicly, led me to compare these scoundrels with any other, lower paid, corporate morons. Now, I can no longer say that everything should be taken away from all of them. They were paid to do a job, perhaps unreasonably so, but that was the agreement. They did that job incredibly incompetently. Some were fired, some fled the country, some just went back to work at other firms, but the understanding I gained was that a majority of those involved didn't seem to have any idea what they were doing, how far reaching the consequences could be or how devastating and inevitable the end would be.
The normal consequence for anyone doing a terrible job is that they be fired. No one loses all the money they have made for their entire tenure before screwing up. They are just ousted. Same here, there will be no ultimate reckoning, we just need to clean house and move on. I have come to terms with this but it brings me to a new level of frustration: how do we move forward from this point of understanding? The line, "you have to pay for the expertise necessary" is now the biggest lie going around. We did, theoretically. It did not work, they did not know what they were doing, they made every problem worse, they disregarded far reaching possibilities and did not understand the very products they developed. Any oversight was paid off, corrupted or rendered impotent by these same people who made their own rules, to serve themselves.
So, there it is. I understand now how different some people are, but not for the reason they would have you believe. They are definitely not the only ones capable of doing the job. They are the ones with the connections to get the job. Most significantly, they are the ones with the cahones to indulge their greed and the utter lack of recognition for anyone else existing in the world to accomplish anything.(less)

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Apr 02, 2012 David Thomas rated it 4 of 5 stars

In their book, All the Devils are Here, Bethany McLean and Joe Nocera did a remarkable job of researching and laying out, in historical context, the incentives that led to the 2008 financial crisis. Unfortunately, the bulk of the book is focused so much on the reactions of the incentivized “devils” that it overshadows the underlying stream of distorted incentives that flowed from a spate of well-intentioned financial rules and regulations. In this book, the devils really are in the details. Publ...more In their book, All the Devils are Here, Bethany McLean and Joe Nocera did a remarkable job of researching and laying out, in historical context, the incentives that led to the 2008 financial crisis. Unfortunately, the bulk of the book is focused so much on the reactions of the incentivized “devils” that it overshadows the underlying stream of distorted incentives that flowed from a spate of well-intentioned financial rules and regulations. In this book, the devils really are in the details. Published in 2010, the book portrays a milieu in which a broad spectrum of government and financial players made rational choices that are judged, in hindsight, as malevolent and self serving, and who laid the foundation for the most significant economic downturn since the Great Depression.

The underlying and most obvious incentive is unveiled on the opening page where the authors confess that the key players “with varying degrees of fervor…thought they were doing something not just innovative but important.” In testifying before Congress, they report on how the bankers hammered home “…all the ways these new-fangled bonds were making the American Dream of owning one’s own home possible.” The desire to exploit or fulfill the shared goal of increasing home ownership runs throughout the narrative as the stated justification for government intervention and financial innovation. The authors explain how the federal government, with the best of intentions, laid the foundations for the catastrophe that was to come by approving the interest tax-deduction and guaranteeing long-term fixed-rate mortgages through the Federal Housing Authority. Not satisfied to just encourage home ownership, the government-sponsored enterprise (GSE) Fannie Mae was launched to purchase the guaranteed bank loans, thus allowing the banks to extend even more. With a foot in the door, it was only natural for the government to start making direct loans through the Veterans Administration, following the Second World War.

The book provides a history lesson from the late sixties, beginning with the enactment of Regulation Q, which bestowed a decided competitive advantage on the Savings and Loan (S&L) industry by allowing them to pay a higher rate of interest on savings accounts. In an effort to fund even more loans, Fannie Mae gave birth to Ginnie Mae to continue the role of purchasing government loans so that it could expand into the conventional loan market, while Freddie Mac was created in parallel to take on the same role for the thrift industry. Leveraging an implied government guarantee, these pseudo-government entities created a new form of financial instrument—one that was backed by the mortgages they had purchased. In the seventies, the maturing baby boomers began entering the housing market, creating a surge in the demand for mortgages and house prices. At the same time, the S&Ls began suffering from the disparity between the regulated interest rate on savings and the skyrocketing nominal rates driven up by double-digit inflation. Reacting to this discrepancy, depositors began moving their savings to institutions offering higher rates of return. At the same time, mismanagement, moral hazard, and inflation pushed Fannie Mae to the brink of bankruptcy. Ironically, though only weeks from closing its doors, Fannie Mae continued to receive funding from the banks, relying on the implied but unwritten promise that the federal government would bail them out if necessary.

With a crippled S&L industry unable to meet the surging demand for mortgages, a powerful incentive arose for innovation in real estate financing. Waiting impatiently in the wings, a slew of ingenious and ambitious Wall Street bankers sat on the sidelines restrained by federal regulations and desperate to gain from the growing demand for home loans. Taking over just in time, the new leadership at Fannie Mae sought out a partnership with the waiting Wall Street wizards to rescue the faltering GSE and at the same time generate almost unlimited funds for additional mortgages. This unlikely partnership paved the way for a massive buildup in real-estate derivatives and generated the trillions that fueled the looming housing boom.
The bulk of the book provides a detailed look at each of the housing and financial subsectors—exposing the emergence of perverse incentives, but then detailing the circumstances and personality flaws of the key decision makers, expounding on both their brilliance and their apparent lack of ethics. Ironically, the book presents clear justification (incentives) for the tragic decisions made by the protagonists when faced with an impending corporate death spiral. Countrywide is a prime example. Watching in desperation as sub-prime mortgage lenders stripped away more and more of their conventional business, the executives, like professional athletes struggling to compete against steroid enhanced foes, entered into a Faustian bargain both to survive and reap the potential profits of the sub-prime market.

One of the book’s most important profiles focuses on the corruption of the once highly respected rating agencies. For years, these firms derived their revenues from subscribers, who sought to overcome the asymmetric information problem inherent in complex financial transactions. Confident they could maintain their independent status and reputation, the agencies made a tragic decision to move to the more lucrative model of charging the issuers. McLean and Nocera appear to have overlooked the “coincidence” that the revenue models were adopted just as new government ratings requirements were being imposed for investments made by certain money market funds, pensions, and government agencies. These seemingly simultaneous shifts forced the issuers, frantic to satisfy the higher rating requirements, to leverage their new role as “customer” and haggle for the highest possible rating from among the four government-anointed rating giants. It should not come as a surprise that, with revenue growth on the line, investment ratings suffered from a severe inflation in the years that followed.

Attempting to demystify the world of the Wall Street “quants,” the authors took on the challenge of explaining the origin, objective, and functionality of the financial innovations that made the housing bubble possible—and did a credible job. They hold up the credit default swap as the breakthrough that inspired the ever more complex instruments designed to remove risk from questionable investments and which were then presented to the rating agencies as worthy of a triple-A score.

The book chronicles how, during the march to economic collapse, various state regulators stepped up to end the insanity. Repeatedly, federal agencies, tasked with regulating the financial institutions, used what they referred to as preemption to relegate the states back to the sidelines—allowing the lemming march to continue unabated.

In the final chapters of the book, McLean and Nocera take the reader on a ride down the unraveling real estate bubble that culminated on September 15, 2008 with the bankruptcy of Lehmann Brothers. Every attempt to conceal the magnitude of the unfolding economic ruin was stripped away on that day and the days that followed. The book ends here with just a short epilogue laying out the regulatory and fiscal response of the Treasury and the Fed. It remains to be seen if the “rush to regulate” will assist in economic recovery or simply increase the number of distorted incentives that led to the devastating downturn in the first place.

The book has an easy-to-read narrative style, is obviously based on comprehensive historical research, and delivers clear and simplified explanations for the complex world of finance. Although clearly not the authors’ intention, they made a strong case for the foundational role of broken incentives in bringing the world’s greatest economy to its knees—a business-cycle systemic collapse, like the one we have just experienced, can hardly be blamed on a few dozen conspiring devils. It should be obvious from the book’s title that the authors have a bias against the “satanic” role of the various players, which is most apparent in their treatment of Alan Greenspan’s philosophy and effort to minimize regulations. In detailing the perverse incentives created by government interference, they seem to miss the very point of Greenspan’s objection. While this reader found the sub-story of incentives more compelling, others might enjoy the book’s primary focus on people, personalities, and poor decisions.
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Jan 26, 2012 Converse rated it 3 of 5 stars · review of another edition

Shelves: business, economics, finance, non-fiction

All the Devils are Here is a compendious but anecdotal history of the real estate bubble and financial crisis of the early 2000s in the United States. Unlike some of the other books on the subject, the authors discuss the mortgage originators, such as Countrywide, as well as the Wall Street firms that repackaged the mortages into various sorts of derivatives, such as Goldman Sachs, Lehmann, Bear Sterns and Merrill Lynch (which was bought by Bank of America). The authors also give a good deal of...more All the Devils are Here is a compendious but anecdotal history of the real estate bubble and financial crisis of the early 2000s in the United States. Unlike some of the other books on the subject, the authors discuss the mortgage originators, such as Countrywide, as well as the Wall Street firms that repackaged the mortages into various sorts of derivatives, such as Goldman Sachs, Lehmann, Bear Sterns and Merrill Lynch (which was bought by Bank of America). The authors also give a good deal of attention to government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, that guarenteed mortgages and also bought mortgage bonds.

The attention given to mortgage originators, such as Countrywide, indicates that lending standards fell drastically during the bubble, with what appears to be a good deal of simple fraud on the part of the mortgage orignators (indicating on the paperwork that borrowers had higher incomes than they actually did and so forth). I think the most surprising thing I learned about this aspect of the business was that a low percentage of the various sorts of risky mortgages were actually given to buy new homes; mostly these mortgages were refinancings. Thus the rationale for the benefits of, for example sub prime mortgages, that these financial instruments were of considerable use in increasing the proportion of American households who owned their own homes, appears not to be factually correct.

The authors also spend a good deal of time on the political activities of Fannie Mae and Freddie Mac, including their successful attempts to avoid being reined in as unfair competition to private enterprise. The success of the GSEs in this arena was remarkable.

The authors also discuss the creation of securities derived from mortgages, beginning with mortgage bonds (originated in the 1980s), collaterialized debt obligations (which are based on mortgage bonds), and credit default swaps (which in regard to real estate are a sort of bet or insurance on the quality of mortgage backed securities). As credit default swaps were a speciality of the insurance conglomerate AIG, there is much discussion of this firm. I was surprised to learn that AIG did not really end its involvement in credit default swaps in 2005, but still had some involvement (as well as the older contracts) going on in years following, though at a lower level.
Goldman Sachs emerges as about the ethical equal (not necessarily saying much) of its competitors, despite such notorious actions as helping John Paulson create a derviative security designed to fail, so that Paulson could bet (using a credit default swap) that it would fail. Goldman emerges as a firm similar to the others, but smarter. In particular, Goldman did not believe that triple AAA security ratings should be taken at face value.

I said that this book is anecdotal, because one learns so much about the individual trees that a view of the forest is rarely attained. Thus it is hard to judge which factors were most deadly in creating the crisis.(less)

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Jan 22, 2012 Sarah rated it 4 of 5 stars

Shelves: nonfiction

Who designed the cover for this book? I hate it. It looks like those horrifically dull graphics they used to put on the cases for software in the '90s. I get what they're trying to do, but I still think they could have done a better job on the cover design.

Anyway, on to the important stuff. This book was (mostly) easy to follow, even for someone with little knowledge about mortgages and capital and derivatives and other such financial stuff. If you've followed the financial crisis or watched mov...more

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Nov 14, 2011 Eric rated it 4 of 5 stars · review of another edition

If you were trying to cook up an old-fashioned financial crisis, all the ingredients are here: greed, ignorance, deregulation, under-regulation, corruption, sub-prime mortgages, predatory lending, clever accounting techniques, and intimidation. The most astounding thing about the whole thing is that so many people saw it coming, but Wall Street was making so much money, both political parties looked the other way, and regulators felt that "mother market" would take care of it. Surely investors w...more

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Nov 11, 2011 Jonny99 rated it 4 of 5 stars

McLean and Nocera get a lot of things right in their effort to join the crowded field of writers tracing the U.S. financial catastrophe of 2008-2009. The first thing they get write is their title. While “all the devils are here” lacks in originality it makes up for in absolutely describing the behavior of all parties involved in very nearly bringing about Great Depression II. McLean and Nocera smartly pick a small number of key devils in this epic mess and focus very closely on them. Their insig...more McLean and Nocera get a lot of things right in their effort to join the crowded field of writers tracing the U.S. financial catastrophe of 2008-2009. The first thing they get write is their title. While “all the devils are here” lacks in originality it makes up for in absolutely describing the behavior of all parties involved in very nearly bringing about Great Depression II. McLean and Nocera smartly pick a small number of key devils in this epic mess and focus very closely on them. Their insights are, at times, stunningly good and one wonders just how they attained them although the meticulousness of their research makes it present felt often.

The main bad guy of the piece (and like all noirs they are all bad guys just of varying degrees) they focus on it former Merrill Lynch CEO ”E.” Stan O’Neal. McLean and Nocera detail the origins of O’Neal’s fatal flaw – paranoia – by showing how he clawed his way to the top and stopped a palace coup once there. O’Neal was no longer capable of trust and consequently got rid of, and inspired his lieutenants to get rid of, anyone with the competence to oppose him. Unfortunately, that also meant he got rid of the people capable of keeping the place from eventually going bankrupt. The ”King Lear” Merrill Lynch tragedy is story enough but the book contains many others.

Angelo Mozilo’s rise and fall probably gets the second most ink in the book and here the cardinal sin is greed specifically to be the biggest at any cost. Mozilo’s firm, Countrywide, started with every noble intention and held on to those longer than most while the rest of the mortgage market went down the rabbit hole of euphemistically called “sub-prime” mortgage lending. However, in the end not joining the swirling around the drain would have meant not being as big and the son of the Bronx butcher couldn’t live with that.

Arguably number three on the book’s scoundrel’s list are organizations rather than people referred to by the friendly Pollyanna names of Fannie Mae and Freddy Mac. In particular, McLean and Nocera focus on the monster that the U.S. government sponsored Fannie Mae grew into from, again, noble roots of trying to help poor people purchases houses. The authors portray Fannie as growing over time into such a political and business powerhouse that when it eventually turned rabid no one, until Treasury Secretary ex-Goldman Hank Paulson, could not just kill it but even dare to question its behavior. Paulson’s firm, Goldman Sachs gets portrayed much like Lord Voldemort mostly working its evil in the background but occasionally stepping out into the light to pull in some serious coin. McLean and Nocera do, however, portray Goldman as the ”smart guys” and thus it comes off much better than Merrill Lynch which laid a trap it later walked into.

While the big guys take a drubbing, the little guys come off no better. As many other sources have done, the book trots out examples of home buyers making $1500 as housekeepers taking out $625,000 loans even though they have no ability to make the first payment even though it is based on an artificially low teaser interest rate. Their mortgage brokers freely change $1,500 on a loan application form to $15,000, talk people into mortgages where 20% of the closing costs are fees and when all else fails sign people up for ”no doc” mortgages which encourage borrowers to just lie about their financial state.

For a long book about financial history, McLean and Nocera keep the story flowing and the pages turning. Their primary facility for doing this, and what separates them from a host of other books on the same subject, is a concentration on the relationships of the, primarily men, involved. O’Neal essentially breaks up with Greg Fleming his top lieutenant after an awkward dinner. Mozilo is forced to chose between an old but conservative friend and a less risk-adverse young gun. Hank Greenberg former head of AIG, who also gets a lot of airtime in the book, plots and schemes against the head of his Financial Products division (which eventually destroys the company).

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Oct 09, 2011 Rod rated it 5 of 5 stars

The book is subtitled ‘Unmasking The Men Who Bankrupted The World’, which is exactly what the authors try to do. I have seen it referred to as if it were a crime novel with a direct writing style and a gripping narrative. If criminal incompetence is a crime, then much of the activity described is criminal, and the prose is as direct as it can be given the subject. But as a read it is more engrossing than gripping, though we can’t blame the authors for failing to achieve the impossible. They are...more The book is subtitled ‘Unmasking The Men Who Bankrupted The World’, which is exactly what the authors try to do. I have seen it referred to as if it were a crime novel with a direct writing style and a gripping narrative. If criminal incompetence is a crime, then much of the activity described is criminal, and the prose is as direct as it can be given the subject. But as a read it is more engrossing than gripping, though we can’t blame the authors for failing to achieve the impossible. They are dealing here with information on a large scale and, as far as I can tell, they have done this very well.

The cast is large: one hundred main characters are listed, with many others getting a mention while not in the list. There is also an abundance of detail concerning companies, state agencies, financial products and regulation. So while this book may not have you on the edge of your seat, the authors have done an excellent job in accounting for the financial collapse of 2008, the aftershocks of which impoverish us still.

They trace the rise of the sub-prime mortgage in the United States, so their starting point is several decades back. In the course of their explanation, several factors stood out for me. The first is the baleful effect of the disconnect between borrower and lender. In the old days, when bankers had banking qualifications, the lender would try to ensure that money lent would be returned. If he failed to do this he would have to answer to his depositors. However, when derivatives appeared on the scene, risk was farmed out to others so the lender was no longer constrained by the ability of the borrower to repay. It was believed by some that complex mathematical risk models were the solution to this problem. Others didn’t care as long as their commissions and bonuses kept coming, knowing full well they would not have to pick up the pieces.

The sub-prime mortgage market was a United States phenomenon, so the book covers all the factors involved in its inception and expansion, which ultimately led to the credit crunch. Unfortunately for readers outside the US, much of the narrative involves semi-public agencies such as Fannie Mae and Freddie Mac which have no counterparts in other countries. And there is a strong political element, with endless political lobbying involving all the main institutions, mostly private. Much of this lobbying was amazingly aggressive and some of it downright vicious. Also, since the events described took place in the US there is a strong element of faith in the free market, entailing vigorous opposition to any regulation at all of derivates and other synthetic products. For example, Alan Greenspan believed in the free market, not surprising in someone who, early on, had bought the Ayn Rand line. (I wonder what he made of the ludicrous ‘Shangri La’ section of Atlas Shrugged?)

The role of the ratings agencies is exposed, perhaps the easiest factor to explain. Since those who were issuing the bonds paid the agencies for their ratings, the issuers could play one agency off against another in their bid to secure triple A ratings. Worse, it was in the agencies’ financial interest to award good grades to their clients. That way their fees kept rolling in.

Also, buyers of bonds came to rely on agency ratings rather than doing their own research. Given the agencies’ record on Enron and WorldCom it is hard to believe that anyone trusted them. Yet after the crash of 2008 the markets still rely on them. Whoever ‘the markets’ may be, they don’t seem to learn from experience.

It is now clear to most that financial markets cannot be left to regulate themselves since, when they fail, which they have on many occasions, the majority of us, who were not involved, are left to pick up the tab through our taxes. And still the bankers pocket their bonuses. If this is the reward for failure, what would be the reward for success?

A long time ago, capitalism entailed people with money lending it to people who needed it to run businesses. A good case can be made for that still. Much financial activity now concerns buying and selling financial products as an end in itself, benefiting no one but the players and certainly not society at large. Capitalism is under attack from parasites of its own creation. The opinions in this last paragraph, which I had before reading this book, have been reinforced by reading it.

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Sep 10, 2011 Ms.pegasus rated it 4 of 5 stars Recommends it for: anyone interested in the housing bubble, or corporate management

Recommended to Ms.pegasus by: author interviewed on Jon Stewart

Shelves: finance-accounting-accounting-fraud, nonfiction

The companies involved in the financial crisis: Countrywide, AIG, Merrill Lynch, Ameriquest, Lehman Brothers, and Bear Stearns, didn't simply sprout horns and tails one night The elements personified in the title are instead a list of financial tools, events, and attitudes that didn't just coalesce but rather evolved in almost predictable though unintended ways. Their growth was part of a monstrous symbiosis.

Readers with a non-finance background should not be dismayed by the parade of ever more...more The companies involved in the financial crisis: Countrywide, AIG, Merrill Lynch, Ameriquest, Lehman Brothers, and Bear Stearns, didn't simply sprout horns and tails one night The elements personified in the title are instead a list of financial tools, events, and attitudes that didn't just coalesce but rather evolved in almost predictable though unintended ways. Their growth was part of a monstrous symbiosis.

Readers with a non-finance background should not be dismayed by the parade of ever more complex financial tools described in this book: Tranches, derivatives, collateralized debt obligations (CDO's), CDO's squared, credit enhancements, and credit default swaps. McLean and Nocera direct their explanations at the general reader. However, as with any accounting technique, one can really only begin to understand these instruments within the context of specific numbers and scenarios. The broader picture they paint is of techniques to manage risk. Risk management such as practiced by the “quants” at J.P. Morgan evolves into risk dilution (tranching, and hedging), which leads all too easily to merely the appearance of risk reduction (the role of the ratings agencies, passing risk on to 3rd parties as if it were a hot potato, and ultimately, the inability to even identify where the risk lay in the layers of repackaged shadow securities). It's interesting to learn that when Merrill Lynch was in crisis, several of its board members began requesting tutorials on CDO's. So again, don't be intimidated by the financing terms!

The first half of the book deals with these elements in the context of the Savings and Loan crisis, rising interest rates, changing banking legislation, an ideology of non-regulation, and a political agenda of increasing the numbers for home ownership. It is startling to learn that the authors chart the seeds of the crisis 30 years back in time. History, not specific villains, is the focus here. Most fascinating, perhaps, is the interplay between Wall Street and the political clout of Fannie Mae. This segment even peaks with a punchline; we learn what a "fannie pack" is.

The second part of the book follows specific “characters”: AIG, Countrywide, Ameriquest and Merrill Lynch. It is striking that the guiding human emotion in these stories was not greed but envy. Companies and leaders feared that their competitors might pull away from the pack, and that fear motivated the drive toward expansion and risk.

Despite the fact that the focus is not on blame, it is clear that McLean and Nocera are ardent skeptics of the self-regulation credo the financial community has so long espoused. Greenspan and like-minded economists at the Federal level failed in their duty to protect the public, even when regulators and consumer advocates at the state and local level were pointing to problems. None of these people have yet shown any public remorse for the mistakes that were made. (Somehow, an admission of "Oops" doesn't seem to suffice). The assessment of Goldman Sachs is more problematic. The authors emphacize that Goldman Sachs was despised, not so much for its lack of ethics, as for its success in execution of its game-plan.

This book serves as an introduction to a much closer scrutiny of the investment industry. ALL THE DEVILS ARE HERE is the first book I have read on the financial crisis. It won't be the last. It is definitely well-written and cohesive, and will encourage readers to delve further.
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Jun 29, 2011 Sara rated it 5 of 5 stars

This was a great, well-written book on the subprime financial crisis.

I did not follow the financial crisis as it unwound. Economics is a field intimidating to me, I admit, which is why this is also my first foray into a book on economics. I'm happy to say that I was very pleasantly surprised.

Bethany McLean and Joe Nocera do a very good job of making the whole mess accessible in their book while not boring the reader. They do an excellent job of giving the back story as to how things started and...more

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Jun 10, 2011 Julie rated it 4 of 5 stars

Shelves: business-and-society

Before I picked up this book, I didn't really know much about why the financial meltdown happened in 2007-2008. And, quite frankly, I'm still not sure I know much about it. But as they say, now I know what I don't know. It's a known unknown.

Okay, enough with the trite political quotes.

All the Devils are Here is a fascinating book. McLean and Nocera go back thirty years, showing how all the dominoes were put in place and then chronicling them as they all got knocked down. It's incredibly complic...more

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May 23, 2011 Richard rated it 5 of 5 stars

I'll echo the sentiment found on here that this book is a must read for those who want to learn about the history of the financial crisis. McLean and Nocera do a fine job of presenting very complex and technical financial information in a manner that will allow most to understand.

I'll be the first to admit that some of the chapters can be a bit daunting, especially those that really dove deep into the world of credit default swaps and all of the other instruments of destruction that flowed thro...more

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Apr 21, 2011 Caro rated it 4 of 5 stars

I read this based on McLean's appearance on The Daily Show, and I'm glad I did. For someone (me) almost entirely ignorant about business and about Wall Street, this was a manageable introduction to concepts like credit default swaps and tranches. The authors are good storytellers, with each chapter introducing another character or episode in the snowballing crisis that is still affecting finance and politics. Now when I hear that Standard & Poor's has downgraded their rating of the US econom...more

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Apr 17, 2011 Ellen rated it 4 of 5 stars

Shelves: economics, nonfiction

I've read Michael Lewis' "The Big Short", Broke, U.S.A. by Gary Rivlin, "How the West was Lost" by Dambisa Moyo and now "All The Devils Are Here" by Bethany McLean and Joe Nocera. This book was dense: I had to read it in small pieces, and did a lot of back-referencing. The set-up was long and dry. I skipped from Chapter 5 to Chapter 17, and back-tracked to the stuff in-between to make the story move more quickly.

Obsessed with trying to understand the financial meltdown, I keep reading these boo...more

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Jan 02, 2011 Mal Warwick rated it 5 of 5 stars

Once upon a time, not so long ago, really -- it was 1999 -- there was a group of three exceedingly smart men whom Time Magazine called The Committee to Save the World. In fact, these three men -- Alan Greenspan, Larry Summers, and Robert Rubin -- seemed to think they were the smartest people in the whole wide world. Together, they had put in place the economic policies of the Clinton Administration, and, boy, did things look rosy then, back in 1999, with a big budget surplus and the Dow Jones av...more Once upon a time, not so long ago, really -- it was 1999 -- there was a group of three exceedingly smart men whom Time Magazine called The Committee to Save the World. In fact, these three men -- Alan Greenspan, Larry Summers, and Robert Rubin -- seemed to think they were the smartest people in the whole wide world. Together, they had put in place the economic policies of the Clinton Administration, and, boy, did things look rosy then, back in 1999, with a big budget surplus and the Dow Jones averages heading for Neptune!

So, here we are, in the closing days of 2010 -- a good time to reassess those three men in light of the economic events of the past three years. The result, of course, is that they don't look so smart anymore. But, guess what? Larry Summers has yet to exit the Obama White House, where he's been the driving force behind this Administration's economic policymaking -- and Robert Rubin is reported to be on the short list to replace him!

Of the three men, only Alan Greenspan, now retired as head of the Federal Reserve Bank after serving under Ronald Reagan, Bill Clinton, and two generations of Bushes, has actually apologized after a fashion for his stubborn refusal to face economic facts that were obvious at the time to anyone well versed in finance who wasn't blinded by greed, willful incompetence, stupidity, or right-wing ideology. The other two men? Well, we haven't heard so much as a hint of an admission of responsibility from them.

So, what did "The Committee to Save the World" do to lay the foundations for the 2008 financial crisis? As best I can tell, collectively they made three fateful errors:

1. they engineered the repeal of consumer protections put in place during the Great Depression (the Glass-Steagall Act);
2. they routinely deferred to Wall Street when shaping economic policy, paying special attention to the effect of their actions on the bond market (where the really big money is to be found); and
3. they stubbornly refused to recognize the dangers in the alarming growth of the unregulated "derivatives" market. (If you don't understand what a derivative is, don't sweat it. Nobody else does, either, not really.)

Not so incidentally, these same three geniuses were also instrumental in fashioning "The Washington Consensus" that guided the work of the International Monetary Fund and the World Bank and caused tens of millions of people to starve in dozens of developing nations over the last decade and a half. But back to Topic A: the financial crisis.

We've identified three of the principal culprits. But, in fairness to Greenspan, Summers, and Rubin, there were many other characters who played leading roles in this still-unfolding tragedy. Some of their actions merely reflected changes set in motion years before. And nobody in any government position, including the Oval Office, calls all the shots. But the buck stops . . . somewhere. When it comes to the public policy that foreshadowed the financial crisis, the committee that "saved" the world bears a lot of the blame.

Now about those other leading characters in this modern immorality play. Chief among them, as best I can tell, were a mixed bag of people both in and out of government:

* On Wall Street, there were dozens of senior executives at such financial powerhouses as Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns, AIG, Citibank, and many others whose shared delusion that money is life's greatest good helped set the course for economic ruin. Some of these men (and a very few women) were brilliant and found ways to make lots of money even when conditions were really, really bad. Others were -- well, not to put too fine an edge on things -- downright stupid. Their firms (principally, Bear Stearns, Lehman, AIG, and Merrill Lynch) either disappeared entirely in a whirlwind of worthless paper or took refuge under someone else's wing. By contrast, the champion money-maker, Goldman Sachs, racked up billions in profits by victimizing some of its biggest clients. Being Goldman Sachs, of course, none of its partners faced criminal charges, as they clearly would have done in a marketplace guided by reason and fairness.
* On Main Street, there were also dozens of co-conspirators. For the most part, these were the people who ran the "non-bank financial companies" like Countrywide and other firms that sold mortgages to people who couldn't possibly afford them. Some were outright crooks running fly-by-night operations, many of them classic bucket-shops, others simply self-deluding or (again that word) stupid. Most of them got filthy rich, though, at least for a time. Dozens should have gone to jail, but did they? What do you think?
* Back in our nation's capital, two institutions unfamiliar to most of the American public found themselves in the middle of the maelstrom: the two quasi-private mortgage repositories, Fannie Mae and Freddie Mac. Don't feel sorry for them, though, because, to cop a phrase from an earlier practitioner of misdirection, "mistakes were made." The leadership of both institutions grabbed at opportunities to make a quick buck. They succeeded, for a time, but only until the profits disappeared -- and we taxpayers are now footing the bill to the tune of hundreds of billions of dollars.
* Don't forget George W. Bush. The decider-in-chief may not have played a meaningful role in economic decision-making (if only because it's highly doubtful he had a clue about what was going on). But, dazzled by the argument that the "free market" would regulate the financial sector all by itself, Bush II deliberately appointed to key regulatory positions such world-class ignoramuses as Christopher Cox to head the Securities and Exchange Commission. It wasn't enough that the regulatory agencies' teeth had dulled considerably over the years and that the powers-that-were in the Clinton Administration had refused to sharpen them. No, George W. Bush insisted on appointing financial regulators whose stated intention was not to do their jobs.

So, what does all this bloviating have to do with All the Devils Are Here? This is, after all, (ostensibly) a book review. It's simple, really: Bethany McLean and Joe Nocera's superb book brought into high relief the roots of the financial crisis like no other book I've read and made it possible for me to untangle in my mind the complex interrelationships among Wall Street, Main Street, the Fed, and the Treasury Department. In previous months, I'd read Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves by Andrew Ross Sorkin, The Big Short: Inside the Doomsday Machine by Michael Lewis, The Devil's Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers by Vicky Ward, and others, all of them excellent books. But McLean and Nocera's treatment of the crisis from a long-term perspective, with its roots in the evolution of housing policy as well as greed and excess on Wall Street, put the whole question into perspective. If you're looking for the best way to begin understanding the financial meltdown of 2007-2008 that came close to tanking the global economy, start with All the Devils Are Here.(less)

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Dec 14, 2010 Jay Connor rated it 5 of 5 stars

“We fell for our own scam.” This quote from John Breit, the Merrill-Lynch risk manager, captures the core absurdity of the run up to and implosion that was the 2008 financial crisis. Here is a story, so wonderfully recounted in the excellent “All the Devils Are Here,” of our major financial institutions creating a whole range of dubious investment vehicles for their own enrichment. Yet, when these investments, soon labeled “toxic assets,” began to fall like a house of cards, the smart guys were...more “We fell for our own scam.” This quote from John Breit, the Merrill-Lynch risk manager, captures the core absurdity of the run up to and implosion that was the 2008 financial crisis. Here is a story, so wonderfully recounted in the excellent “All the Devils Are Here,” of our major financial institutions creating a whole range of dubious investment vehicles for their own enrichment. Yet, when these investments, soon labeled “toxic assets,” began to fall like a house of cards, the smart guys were the ones who could move the worst securities off their own books into the hands of their unsuspecting clients. Yes, the Federal Government bailed out the guys whose central strategy was sticking their own customers with as much self-constructed trash as they could peddle.

The scam involved securitizing mortgage debt. (Later, as the frenzy was hitting its peak, it would include uncollateralized debt like credit cards and school loans.) But, in its simplest form: securitizing mortgage debt is buying a number of loans on housing, bundling them together using the monthly mortgage payments as “interest,” and selling pieces of the bundle like you would sell a bond or a note. At this point, fairly harmless, right? But here comes the object lesson – a tutorial in the balance between free market and regulation gone amuck. By bundling the mortgages together, the investment banks broke apart the traditional market force of a borrower and lender having a mutual interest in the loan being repaid. As Prentiss Cox, Minnesota Attorney General observed: “It’s not in anyone’s long-term interest for consumers to get loans they can’t pay back.” But, if you gave an incentive of huge fees for the selling of these securitized mortgages, then the market force becomes distorted valuing the number of mortgages to bundle much more highly than the traditional repayment of those mortgages, especially when the party selling the mortgage no longer cares whether it is repaid because they sold the loan to the bundler long before the first payment was due.

But surely, a bundle of loans that aren’t being repaid can’t be worth as much as when the loans are being repaid. Right? Not in this scam. The people rating the quality of these loan bundles – Moody’s, Standard & Poors, Fitch – were paid fees by the investment bank bundlers, so it wasn’t in their selfish interest to look too closely at the bundles. The more bundles – i.e., the more mortgages – the more fees to the rating agencies. As one Moody’s employee in an e-mail opined as the scam was unraveling in late 2007, “(they) make us look either incompetent at credit analysis or like we sold our soul to the devil for revenue, or a little bit of both.” A little bit of both, indeed.

Without going into the arcane world of tranches, laying off risk, derivatives and counter-parties, in this world of fees trumping reality, all bundles were rated Triple A – the highest quality investment, just like Treasuries. Unlike the supernatural perfect storm, this was the manipulated perfect trifecta! (1) Sellers of the loans – like Countrywide – were incentivized to sell more loans irrespective of chance of repayment. Why else would you sell “no docs” loans, which required no proof of ability to repay? (2) Bundlers of loans – Merrill Lynch, Goldman Sachs, Lehmann Brothers et al – were incentivized by huge fees to make / sell more bundles. (3) The quality control on the bundles, the quasi-regulator ratings agencies, was incentivized to approve more bundles. In fact, there was a race to be easier in your ratings rather than lose market share. Thus, all of the market forces in this free market were aligned. It really was alchemy, though of a deeply perverse sort. With Alan Greenspan, the FED and the Treasury unwilling to do anything to intervene in this “free market,” the eventual implosion was inevitable!

In this misguided stance of nonintervention, the authors correctly summarize: “Greenspan was blinded, as ever, by ideology. (Larry) Summers was blinded by his deep-seated need to be viewed as a brilliant man, which in this case meant embracing, uncritically, the complexities of modern finance. As for Rubin, he was blinded by pride.”

The result, as concluded by a former Moody’s analyst, “we have encouraged financial institutions to grow in ways that do not directly facilitate or enhance the reason for having a financial system in the first place.” In a free market, financial institutions are charged with providing capital for economic growth. A trillion dollars wasted with no new capital formation, another trillion-plus dollars lost by scammed investors, dramatic unemployment, near-depression economic retrenchment and a home-ownership percentage lower than when all of the manipulation began. Truly, “all the devils are here.”

We are still in the dawning of the 21st Century; we have in our control how we will be remembered. As of now, it looks like the time will be labeled: A Epoch of Greed and Hubris. Are we closer to our Caligulas or our Caesars? How we unravel the wrenching reality of more than three trillion dollars wasted in the past ten years, between war and games, will be our measure for future generations. We must have a clearer purpose and vision than simply acting out of our self-centered ideology, need or pride.
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Dec 09, 2010 Blog on Books rated it 4 of 5 stars

I thought it would take a couple of decades of perspective to tell the full story of the crisis. Meanwhile Michael Hirsh’s “Capital Offense” (which covered the story from Washington), along with “The Big Short” by Michael Lewis (focusing on a few offbeat portfolio managers), Justin Fox’s “The Myth of the Rational Market” (which went deep into intellectual history and gave testimony from many of the people who invented the theories), “The Quants” by Scott Patterson (working from the equations out...more I thought it would take a couple of decades of perspective to tell the full story of the crisis. Meanwhile Michael Hirsh’s “Capital Offense” (which covered the story from Washington), along with “The Big Short” by Michael Lewis (focusing on a few offbeat portfolio managers), Justin Fox’s “The Myth of the Rational Market” (which went deep into intellectual history and gave testimony from many of the people who invented the theories), “The Quants” by Scott Patterson (working from the equations out) and Glenn Yago and Franklin Allen’s “Financing the Future” (which traced the story from prehistory into the future and emphasized the positive side of financial innovation as much as the negative side) were the best available accounts. All had stylish writing, great stories and thorough research to cover important aspects of events.

Without taking anything away from any of those books, “All the Devils Are Here” manages to cover every important financial aspect of the crisis. To be fair, it doesn’t go into as much history or theory as Justin Fox, Michael Hirsh or Yago and Allen did, and it’s not as great a story as Michael Lewis and Scott Patterson extracted. It covers the crisis and only the crisis and is too detailed to be as much fun as Lewis and Patterson.

You won’t find gigantic surprises in this book, the usual suspects are examined: originate-to-sell, government-sponsored entities, political pressure to increase homeownership and provide jobs and perks for politicians and their friends, rating agencies, mathematical models divorced from commonsense and reality, CEO’s remote from their businesses, and all sorts of people chasing profits and supressing doubts. What this account adds is nuance and balance. Different things mattered at different times, and in most cases there were at least some positive aspects. Things that everyone agrees were bad usually turn out to be bad in this account, but often in slightly different ways than is commonly assumed. Not all doubts were supressed, and a comforting number of people acted with honor and wisdom rather than short-term focus on profits or votes (not a decisive number, unfortunately, but comforting compared to popular conception).

If you read one book to understand the crisis, I recommend this one. Your understanding will be much deeper if you read all the ones above, and those might be better choices if you’re interested in the crisis in some larger context, like the history of finance or political decision-making. But this is an amazing accomplishment, to distill this complete and even-handed a story while the fallout is still falling and few participants have had a chance to reflect on events and add perspective. No doubt there will be better histories in the future, but I’ll bet the authors will all start by reading this one.(less)

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Nov 29, 2010 Kathleen Gilroy rated it 5 of 5 stars

Yet another book on the financial crisis. I thought I was thoroughly saturated (even though I still can't really explain a synthetic CDO). But this was reviewed as the best business book of the year (along with Broke USA which I thought was spectacular) and I'm glad I read it. Unlike many of the other books, All The Devils is a history of the crisis. It starts with a meeting between Stan O'Neal (former CEO of Merrill Lynch) and his risk management guy where O'Neal is informed that Merrill is goi...more

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Nov 26, 2010 Tiffoknee the 3rd Conner rated it 4 of 5 stars

I must profess at the outset that I have a bit of a nerdy girl-crush on Bethany McClean. She is everything I wish I could be: Intelligent, articulate, well-versed on topics of financial and economic complexity, and a respected journalist. She's also very beautiful, but I am what I am so far as that is concerned.

I continue to read as much as I can about the Crisis of 2008. Maybe it's because I am unemployed and grow more and more bitter with each day? Maybe I'd like to be able to rail against Wa...more I must profess at the outset that I have a bit of a nerdy girl-crush on Bethany McClean. She is everything I wish I could be: Intelligent, articulate, well-versed on topics of financial and economic complexity, and a respected journalist. She's also very beautiful, but I am what I am so far as that is concerned.

I continue to read as much as I can about the Crisis of 2008. Maybe it's because I am unemployed and grow more and more bitter with each day? Maybe I'd like to be able to rail against Wall Street with some arguments rooted in substance? There's a little bit of that, but mostly, I'm fascinated, utterly and completely fascinated, by the complexity and outrageousness which went into creating the most disastrous financial disaster of my lifetime. There is more than enough blame to go around for more than one party. Truth be told, it's next to impossible to blame just one party. But the drama's usual players are to be found here: Subprime mortgage, derivatives, lax regulation, greed. Even so, McClean and Nocera do a fine job of revealing a few little known tidbits. For example, how many people know that more than half of the subprime loans given during the lead up to the crisis were not even for first-time home buyers? Most of the loans went to people seeking to purchase second homes or looking to get loans to make improvements on their current homes. Conservatives in denial (and also in the pocket of Wall Street contributors) like to place the blame on "borrowers taking out loans they knew they could not afford." That was a significant problem, but this didn't stop mortgage officers from falsifying applications or slacking on underwriting because they were being told that Wall Street needed more loans to put into the hot new instrument (Collateralized Debt Obligations) making everyone rich. Feed the Beast. This didn't stop mortgage companies from pushing applicants who could have qualified for prime loans into subprime loans. Why? Because subprime loans offered more in the ways of fees and compensation. And then there were the credit ratings agencies agreeing to offer the best ratings to securities they knew were junk. It's hard to refuse the request of the very banks upon whom you are dependent for your survival, isn't it?

This book is dense, but well worth the effort. I'm not a finance mind and there was enough history and profile-type writing in this book to make it approachable for an intelligent reader. McClean and Nocera are equal opportunity in that they don't politicize this story. It's easy to want to, but as mentioned, there is plenty of blame to go around for anyone. (less)

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Jan 13, 2012 Melissa rated it 4 of 5 stars · review of another edition

Is this book perfect? I am sure people smarter than me could point out problems but that wouldn't change the fact that it is a must read. It gives the scope, the magnitude and perspective of greed and willful ignorance that led to the crisis. It is truly shocking, just beyond even my tolerance for stupidity. I watched an interview with the authors and you could tell they were mad. They were upset by what they had found and I understand why now.

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Aug 27, 2011 Chad rated it 4 of 5 stars

Shelves: reportage

While not as accessable or entertainingly irate as Matt Taibbi's recent "Griftopia", this recent addition to the financial collapse literature is still a fascinating read, likely to get your hackles back up about all the causes of the 2008 financial meltdown.

Taibbi's book was a bit more readable thanks to his saintlike eagerness to clearly explain many extremely complicated economic concepts, and his decidedly unsaintlike urge to editorialize in a most profane manner.

With "All the Devils Are Her...more While not as accessable or entertainingly irate as Matt Taibbi's recent "Griftopia", this recent addition to the financial collapse literature is still a fascinating read, likely to get your hackles back up about all the causes of the 2008 financial meltdown.

Taibbi's book was a bit more readable thanks to his saintlike eagerness to clearly explain many extremely complicated economic concepts, and his decidedly unsaintlike urge to editorialize in a most profane manner.

With "All the Devils Are Here", McLean and Nocera take a more labrynthine approach, sniffing out root causes going all the way back to late 70s. Rather than bulking up the page count with detailed explanations of every type of derivitive and security and financial insturment in play, they hit the ground running, pausing only long enough to (if you're lucky) give you a paragraph-long primer so you have a slightly better chance of keeping up. They go heavy on the jargon, and just by virtue of the huge cast of characters and institutions involved, the authors toggle furiously between the goings-on of Goldman Sachs, Countrywide, the Fed, Fannie and Freddie, Merril Lynch, AIG, Moody's, and dozens of other lenders, ratings organizations, loan originators, insurers, and regulators. By the end, you realize that anytime you may have ever heard a pundit on a news network blaming the financial crisis on any single person or entity, they were totally full of crap. It has become pretty apparent in the year's since 2008 that it was, indeed, and entire industry that screwed up. Every single aspect of it. You can point to just about every one involved and find some act of stupidity or ignorance or greed they committed that contributed to the end result.

To truly understand it all, the complexity of the events themselves preclude anything resembling an 'easy' read. But within that context, McLean and Nocera manage to make a modicum of sense out of the dozens and dozens of threads that wove together to create the final frustratingly greed-tinted tapestry.(less)

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Sep 27, 2012 Chris rated it 4 of 5 stars

An excellent, revealing and thoroughly depressing book. All the Devil's are Here tells that story of the mortgage/financial industry meltdown of 2006-2008. It is a story of unchecked greed and ego, unmitigated arrogance and stupid short-sightedness. This was a crisis that so many could have easily averted by simply doing the right thing, or at the very least, their jobs. Unfortunately, the allure of vast sums of 'easy money' convinced thousands of people, from the home buyers and loan officers,...more

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Mar 31, 2013 Erika Johansen rated it 4 of 5 stars

Shelves: favorites

If you're like me, you read the headlines in 2007-2008 and understood what was going on...sort of. I wasn't comfortable enough to hold up a conversation about what caused the crisis and had no clue what a CDO is. If you're like me, this is the book for you. It lays out the full history of the financial crisis, which stretches all the way back to regulatory banking decisions made thirty years before. It also dissects complex financial structures in a way that makes them comprehensible (well, almo...more

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Oct 31, 2012 Mary rated it 4 of 5 stars

The latest in books regarding the financial crisis. Not much new to be added . It is still amazing to me that no CEO 's, traders, no one from the rating agencies or the regulators are in jail. It is pretty apparent that everyone know what was going on, that fraud was occurring and no one did a thing, Somehow the people losing houses Were the only losers . Goldman Sachs betted against their own clients - and won (or lost less than they should ). The ratings agencies perpetuated fraud, loan origi...more

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Dec 09, 2011 Kathy rated it 4 of 5 stars

A very good look at the sub prime economic meltdown that has affected us all since 2007. The book has a lot of acronyms which can make it a bit bewildering at times as wall street really have their own language, but a list describing all the short-cut language at the front of the book is invaluable.

These authors have a knack for taking a complex subject and explaining it in reasonably clear terms and the quality of their other book The Smartest Guys in the Room: The Amazing Rise and Scandalous ...more

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Sep 21, 2011 George Bradford rated it 4 of 5 stars

Shelves: america, m-o-n-e-y, villains

Why did the world economy collapse in September 2008? Who was responsible for the disaster? Bethany McLean and Joe Nocera's book "All the Devils Are Here: The Hidden History of the Financial Crisis" answers these questions and delivers exactly what the title promises.

All the Devils ARE here: unscrupulous capitalists, greedy bankers, sleazy subprime lenders, unethical traders, clueless legislators, ineffective regulators, coward politicians and an ignorant citizenry. Individually these groups --...more

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Apr 12, 2011 Brian rated it 4 of 5 stars

I had high hopes for this book, and it hit nearly all of them. The authors did an excellent job walking through the histories of how many of the players came to be in their powerful yet precarious positions. The Fannie Mae history was very strong, and it was good to read about the history of the ratings agencies, which most books have hardly touched on.

The authors also expose themselves as slightly right-leaning, though politically they do a good job excoriating both parties. The history of laws...more

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May 02, 2011 Steve rated it 3 of 5 stars

This is a good survey of the 2007-08 financial meltdown and the events leading up to it. The world of mortgage finance is arcane and to begin with, and it was made even more arcane by Wall Street’s groovy new inventions. Joe Nocera (NY Times business reporter) and Bethany McClean (The Smartest Guys in the Room, Enron..) take on the task of transforming that world into a compelling story and succeed, mostly.

My only criticism of the book would be that it never takes a step back from the events to...more

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