Tuesday, March 29, 2011

Don't read this.

     Among books on the 2008 Financial Crisis, "Too Bit To Fail" was the most overrated. It is comprised primarily of a litany of the author's man crushes on Wall Street.

     Author Andrew Ross Sorkin, a New York Times finance columnist, is a talented writer. But this book doesn't show off his writing chops. Instead it shows he can schmooze financiers.  His narrative consists chiefly of a string of meetings interrupted by golf games and the occasional bike ride.  In "Too Big To Fail" bankers meet, talk, and wear suits, khakis or even...jeans (gasp). I can't believe I spent money to read this.   In almost every single description of a meeting Sorkin tells the reader what the stars of his book are wearing  - even if its "a blazer and slacks" or "jeans and a polo-shirt." I didn't know it mattered so much to him. If it's worth putting in the book, then can he please include the designer, cut, fit, etcetera.

     "Too Big To Fail" is useful in that Sorkin illuminates the relationships between players - he connects the dots for the reader. There is a revolving door between regulators and executives. Hank Paulson's fretting over his integrity and independence from Wall Street is somewhat amusing.  Paulson headed Goldman Sachs for years, pushing out his own proteges when they appeared to become rivals.
Now he deems himself independent of Wall Street and Goldman and free of any conflict. He doesn't want to be seen talking to Goldman. Paulson can't step back and see the big picture. Neither can Sorkin. Most of the Goldman execs and the heads of the major banks and top regulators attend the same schools and worked at the same companies. They can't fathom life without one another. Sorkin's book fawns on the characters in an obsequious manner. He raves about Bob Steele, the undersecretary of Treasury, as "handsome" and waxes poetic about the manhood and looks of his cast of characters. Sorkin seems completely infatuated with his subjects.

    On the other hand, sometimes juicy tidbits slip by -- unheralded by the narrator -- but astounding in their import. Who knew that Paulson's blind trust was not so blind, or that the investment banks he was responsible for regulating actually sought out his personal investment dollars. He went fishing for money for them. He tried to stick Warren Buffet with the mess. It is kind of embarrassing that a sharp man like Paulson can have such blind spots. He had no business heading the US Treasury Department or orchestrating a bailout. He is rife with conflicts of interests. But no matter. Sorkin is fascinated that Paulson would sometimes forget to shave, or wear jeans. Pages 197-199 made me wonder why Sorkin could become so anal about recording such trivialities. Was he paid by the word? Nonetheless, Sorkin's tome describes a number of incidents that raise red flags. Perhaps he knew that adding a huge dollop of flattery would appease the subjects of his book even as he shared light on some of their secrets. If that was his plan, it's brilliant. I would prefer a summary of the book that gives the juicy tidbits and skips the monotonous meanderings of prose that appease the bankers.

     Sorkin excels at describing interpersonal relationships - but he gives short shrift to the description of the financial instruments involved in the 2008 crisis. There are far better accounts of the credit default swaps, super seniors, etc. and of the causes of the 2008 Financial Crisis - "All the Devils are Here: The Hidden History of the Financial Crisis" by Bethany McLean and Joe Nocera by and "Faultlines" by Raghuram Rajan.

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