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Fool's Gold

3.86  ·  Rating details ·  3,002 ratings  ·  148 reviews
From award-winning "Financial Times" journalist Gillian Tett, who enraged Wall Street leaders with her newsbreaking warnings of a crisis more than a year ahead of the curve, "Fool's Gold" tells the astonishing unknown story at the heart of the 2008 meltdown. Drawing on exclusive access to J.P. Morgan CEO Jamie Dimon and a tightly bonded team of bankers known on Wall Street ...more
Hardcover, 338 pages
Published September 1st 2009 by Little Brown and Company (first published 2009)
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Average rating 3.86  · 
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Lobstergirl
Jun 19, 2009 rated it really liked it  ·  review of another edition
Shelves: business-finance
This is one of the drier accounts of the 2008 financial meltdown. Journalist Tett begins in the 1990s with the invention of the credit derivatives at J.P. Morgan that would fuel the massive buildup of toxic leverage a decade later. Somewhat paradoxically, by that time the venerable J.P. Morgan had merged with the commercial bank Chase to become JPMorgan Chase (the periods vanished in order to disassociate from the idea of Morgan, the man), led by the risk-averse Jamie Dimon. Dimon was never ...more
Randy
Sep 15, 2009 rated it it was amazing
I've done a fair amount of reading about the Panic of 2008, and Gillian Tett's "Fools Gold" explains the exotic investment instruments at the heart of the panic better than any other work I've read. A group of derivatives traders at J.P. Morgan created commoditized credit default swaps in the early 1990s as a way to move risk off the company's books, freeing up capital for lending and investment that otherwise would need to be held in reserve. Morgan made payments to AIG, which assumed the risk ...more
Howard Olsen
Nov 22, 2009 rated it really liked it
This is yet another book about the credit crunch and the Crash of '08, but it's one of the best. Gillian Tett tells the story of the crisis from the point of view of JP Morgan. Morgan was an early innovator in the derivatives market. Indeed Tett credits Morgan with creating the credit default swap market which eventually overwhelmed the financial world. But, having created the market, Morgan walked away from it when it was unable to develop any sort of reliable risk modeling. As a result, Morgan ...more
Mac
Dec 09, 2010 rated it liked it  ·  review of another edition
Another crisis/bailout book, this one told mostly from the point-of-view of J.P. Morgan, which came out slightly less dirty than most everyone else once the dust settled. It’s interesting to learn how derivatives became the Frankenstein’s monsters of the financial industry – the Morgan folks who thought them up meant well, and to an extent they make a kind of sense (spreading risk around to lessen its negative effects), but when misused, they brought the house down.

Also, Jamie Dimon must be a
...more
DoctorM
Dec 19, 2010 rated it really liked it
Shelves: politics, economics
Well-done account of the Global Economic Meltdown of the Year Eight as seen from inside J.P. Morgan. Tett focuses on the rise and collapse of the credit derivative market--- she is the FT's specialist on that ---and not on the subprime mortgages that attract so many other authors. Her angle here is that CDS and derivatives were designed by her main characters not as "financial weapons of mass destruction" but as perfectly legitimate instruments for dispersing risk and were employed with no clear ...more
John
Mar 09, 2011 rated it really liked it
Excellent read. Good focus on the evolution of credit derivatives and how a small coterie of bankers at JP Morgan changed the world. I found this book a much more enjoyable read than Ms. Tett's columns at the FT. Given a chance to tell a story in depth and paint idiosyncratic portraits of eccentric bankers at work and at play, Ms. Tett's writing style and skills are given more space. Reading this book, one gets the sense of a Dr. Frankenstein type scenario where some financial engineers with ...more
Matthew
Good sketch of some of the structural factors behind the GFC. Chief factors appear to be: (i) Excessive securitisation of inappropriate underlying assets, with risk retained on bank balance sheets -- key word is excessive, not derivatives -- with the residual super-senior risk being taken up by banks themselves onto balance sheet, without due recognition of fact that CDOs were not meant to be written on mortgages in the first place but on diversified corporate loans, let alone to the extent that ...more
Jennie
Sep 21, 2009 rated it really liked it  ·  review of another edition
If you're like me, making sense of the economic implosion has been difficult. I am lucky if I can manage to keep my checking account balance. So, the whole world of "derivatives" and "complex investment vehicles" generally soars right above my head.

That is, until I stumbled upon Gillian Tett's book, Fool's Gold. Now, I am still no economic expert, but I feel like Tett has provided me with a primer to sort through the mess brought about by a small band of investment bankers that left a
...more
Erin Taylor
Aug 12, 2014 rated it it was amazing
Is Wall Street motivated solely by greed, or do its bankers have humanity’s interests at heart? In this revealing account of the events leading up to the Global Financial Crisis, Gillian Tett sheds light on how investment bankers think, why they made the decisions they did, and how it all came unstuck.

Tett, anthropologist and editor of the Financial Times, explains how a small team at J.P. Morgan believed they were developing financial products that would reduce risk and help stabilise the
...more
Tara Brabazon
Jul 24, 2017 rated it really liked it
If anyone doubts the value of a social anthropology PhD, then this book offers a great answer and rebuke. Tett, a financial journalist, had completed a PhD in anthropology and used those skills to understand the 'on the ground' culture of the bankers and financiers in the derivatives market. Tett probed a culture of extreme risk taking, excess and ridicule of regulators. Fascinating, she also probed the consequences of disconnecting finance capitalism - money exchange - from the people it is ...more
Themistocles
Jun 20, 2011 rated it liked it
A very interesting read, with lots of details and a good flow; however, Tett's writing doesn't allow for the drama to come through, like in other contemporary business (failure) books. Worth a read.
Kirk Houghton
Jul 04, 2016 rated it really liked it  ·  review of another edition
British voters paid little attention to Jamie Dimon’s threat to relocate 4,000 JP Morgan jobs from London in the event of Brexit. But underneath the small print they might have missed the real concern – the world’s most prestigious bank relies on its London offshoot to nurture its Derivatives operations. In reality, England’s capital has been a welcome centre for American retail banks hoping to blur the lines between commercial and investment banking for the last five decades. Will that now ...more
Jiayu
Aug 14, 2018 rated it really liked it
I could only afford to do a quick scan of the book as research for a school essay, but even so, I found this a deeply engaging journalistic account of the origins of the 2008 crisis. This is an account you read with a growing sense of horror - Tett takes you through the chronological process (starting from the 1990s to 2008) of how risks were rolled into more risks, disguised by ever more complex financial jargon with each rolling, until credit-based derivatives mutate into an epidemic that ...more
Scott Lee
Nov 01, 2018 rated it really liked it  ·  review of another edition
I think Tett probably explained the financial creations involved in this account of the Banking mess that led to the "Great Recession" as efficiently and effectively as one can for general readers and I'm still pretty foggy on what it all means.

What is clear though, is that, as the subtitle indicates, the financial market was corrupted by greed (essentially underlining for those who needed to hear it that nothing human-made and run can be left to itself and assumed to be safe and able to
...more
Aidos Ibadulla
Nov 28, 2018 rated it it was amazing
At first, all those financial instruments with fancy names like CDOs, CDO of ABS, CDS and etc. were so obscure and confusing. I had read a couple of books about the financial crises before I grabbed this book. And, honestly, this book is among the best books that depict and explain the crises of the last decade in a unique way. It concentrates in one bank which after the crises become the most powerful bank in the world, i.e. J.P. Morgan. In the 1990s, the bank started to use credit derivatives ...more
Dan Cohen

I was pleasantly surprised by this book, as the rather hysterical sub-title had me worried. But the book is actually a balanced account of aspects of the development of markets that led to the crisis. In particular, it focuses on the J.P.Morgan team that played a pivotal role in the development of credit derivatives and the picture painted of that bank and that team is far from what I had expected from said sub-title. It's a well-written book and one of the best I've read in explaining in simple
...more
David Szatkowski
Feb 25, 2018 rated it really liked it  ·  review of another edition
While I admit I am a bit behind on my current event reading (this book was published in 2009), the effect of the mortgage meltdown is still with us and we are being set up again for another, similar situation. I have read multiple books on this time period, including Paulson's autobiography. I continue to believe not enough people went to prison for mortgage fraud. I also continue to believe Iceland did the right thing in letting their banks fail rather than bail them out (as we did, effectively ...more
Jaipal
Jul 12, 2017 rated it really liked it
This is a fantastic book about the creation of financial instruments that was misused, mainly due to greed, and resulted in the Global Financial Crisis of 2008.

The book gives the background of the people involved and the decisions made by staff at J.P. Morgan from the 1990s until 2008.

I found the book to be a good read, well paced although I knew what was coming at the end. It's that wreck just ahead but you still want to see it.

I did find the book to be pro J.P. Morgan so not too sure whether
...more
Popup-ch
Sep 28, 2018 rated it liked it
Shelves: kindle, 2018
The story follows a team from JPMorgan, who invented some of the credit derivatives that brought down the banks in 2008. They themselves never used then in conjunction with subprime mortgages, and they were apparently dumbfounded that anyone would do so.

It covers slightly different aspects compared with Michael Lewis's ' The Big Short', but fundamentally the story is the same — greedy bankers spot an opportunity and, while it was ok on a smaller scale, it eventually blew up in their faces.
Laura
Sep 23, 2018 rated it it was amazing
Very good summary of the creation of the credit derivatives market and how/why the market developed into what it did (a major driver of the financial crisis). Very good summary of both characters involved, and business decisions/ trade offs the bank had to make while navigating both the run up and the downfall.
John
Oct 13, 2017 rated it liked it  ·  review of another edition
It was interesting to read this dry, financial reporter's account after having read the Big Short. This one focuses on what the pros were doing. Big Short was what the idiots were doing. Main point of both books is that it was hard to tell the idiots from the pros so it fooled most everyone. In the end, caution won the day for JP Morgan, PNC and a few others. Sounds good to me.
Julie
This is a good read, with the strong, clear writing necessary to convey some complex ideas. I can't claim I caught every last nuance, but the overall picture was clear. I appreciated Tett using J.P. Morgan as the POV, giving me a point of reference and an anchor. This is the second book I've read on the banking crisis and it won't be the last. Fascinating stuff!
Keisuke Ando
May 10, 2018 rated it it was amazing  ·  review of another edition
Must read yo truly understand the credit crisis

Excellent account and easy to understand the complex situation during the credit bubble. Should be must read for all entering wall street
Jake Calhoun
Oct 27, 2019 rated it really liked it
Fantastic stories about the market crash. While educational it was also highly entertaining
Mario Lodos
Jan 19, 2020 rated it liked it
The story behind the subprime crisis. Good journalistic job, presented as a sometimes boring story
Glenn Entwistle
May 22, 2019 rated it it was amazing
Interesting read and well explained
Avadhut
Nov 21, 2011 rated it really liked it
http://avadhutrecommends.wordpress.com/

Summary –

Fool’s Gold is a narrative expose’ of the financial crisis that walks us through the 15 year journey of the J P Morgan Investment bankers team instrumental in innovation of credit default swaps on corporate loans (CDS) and how the innovation led to its perversion resulting into the ultimate disaster.

Review –

Gillian Tett is an Assistant Editor at the Financial Times and one of the very few journalists who took interest in the credit market as early
...more
Gina
Jun 09, 2010 rated it liked it  ·  review of another edition
Shelves: listened
My 3rd book on the financial and economic crisis of 2008. This book starts very slow, going way back 20 years into the history of JP Morgan (Chase) bank. I felt Tett spent too much time on the history and then crammed the current events at the ending.

And I didn't like the reader - Stephen Hoye. His british accent came and went seemingly at random instead of using voices for the different characters, especially women. I guess to Hoye all women sound British?

One thing I did really like about
...more
Joseph

In Fool's Gold, Gillian Tett, a reporter for the Financial Times, tells the story of how esoteric credit derivatives were developed and championed by a small group of independent thinkers at J. P. Morgan and how these derivatives came to ran amok among other banks causing the financial crisis from which we currently suffer. She details how a small close-knit group at J. P. Morgan developed and championed credit derivative swaps (CDS). J. P. Morgan was quite careful with these derivatives. It is

...more
John-Paul
I don't often read books for work (I prefer to keep reading an enjoyable hobby) but every once in a while my love of reading and desire to learn more about the industry I work in collide. The reading of this book was the result of one such collision! I was in search of a book that described step by step the way in which the burgeoning credit derivatives industry of the late 1990s and early 2000s helped set the stage for the financial crisis of 2008. Tett is a journalist who educated herself in ...more
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Gillian Tett is a British author and journalist at the Financial Times, where she is a markets and finance columnist and U.S. Managing Editor. She has written about the financial instruments that were part of the cause of the financial crisis that started in the fourth quarter of 2007, such as CDOs, credit default swaps, SIVs, conduits, and SPVs. She became renowned for her early warning that a ...more
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“To him, bankers were neither noble or Masters of the Universe. They were just businesspeople doing a job, pushing money around the economy as efficiently and effectively as they could.” 1 likes
“If you could really insure banks and other lenders against default risk, that might well unleash a great wave of capital into the economy.” 1 likes
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