- Shopping Bag ( 0 items )
"Law professor and financial expert Frank Partnoy shows how the roots of today's global financial crisis can be found in Wall Street's "lost decade" - the time in the late 1980s and '90s when the business world quietly made the transition from old-school, white-shoe Wall Street to the current-day complex financial product chaos. The fallout from this shift has produced every modem-day financial scandal, including the ones at Bear Stems, Lehman, and AIG." Infectious Greed tells this story by illuminating the linkage between the implosion of major
"Law professor and financial expert Frank Partnoy shows how the roots of today's global financial crisis can be found in Wall Street's "lost decade" - the time in the late 1980s and '90s when the business world quietly made the transition from old-school, white-shoe Wall Street to the current-day complex financial product chaos. The fallout from this shift has produced every modem-day financial scandal, including the ones at Bear Stems, Lehman, and AIG." Infectious Greed tells this story by illuminating the linkage between the implosion of major institutions ranging from Bankers Trust to Barings Bank to Orange County. California to Long-Term Capital Management to Enron to WorldCom, charting how each new level of financial risk and complexity obscured the sickness of corporate America. Ultimately, Partnoy proves, the financial crisis of 2008 was all but inevitable- but there are some key policies we can still adopt in order to save our financial system.
From Infectious Greed:
By 2002, the closing bell of the New York Stock Exchange was barely relevant, as securities traded 24 hours a day, around the world. The largest markets were private, and didn't involve regulated exchanges at all. Financial derivatives were as prevalent as stocks and bonds, and nearly as many assets and liabilities were off balance sheets as on. Companies' reported earnings were a fiction, and financial reports were chock full of disclosures that would shock the average investor if she ever even glanced at them, not that anyone—including financial journalists and analysts—ever did. Trading volatilities were sky high, with historically unrelated markets moving in lock step, increasing the risk of systemic collapse.
In just a few years, regulators had lost what limited control they had over market intermediaries, market intermediaries had lost what limited control they had over corporate managers, and corporate managers had lost what limited control they had over employees. This loss-of-control daisy chain had led to exponential risk-taking at many companies, largely hidden from public view. Simply put, the appearance of control in financial markets was a fiction.
|2||Monkeys on Their Backs||36|
|3||Wheat First Securities||62|
|5||A New Breed of Speculator||112|
|6||Morals of the Marketplace||141|
|8||The Domino Effect||227|
|9||The Last One to the Party||267|
|10||The World's Greatest Company||296|
Posted April 28, 2004
This book sheds tremendous light on the financial fiascos that occurred over the past fifteen years. I enjoyed using it to do my report in my Business Ethics course at Loyola, New Orleans. Dr. Capaldi, I highly recommend this book to your future students. Here's a brief summary of what the book entails: `Infectious Greed¿ written by Frank Partnoy is an in-depth look into the corruption that has plagued the market for the past fifteen years. It is a historical account that draws connections among the key players and describes the financial devices they used to pursuit tremendous wealth. Many of the devices were direct contradictions of the law, but even those that were legitimate proved to be too complex for regulators, analysts, credit rating agencies, and especially investors to understand. Consequently, investors devoted their money blindly in the face of incomprehensible risks and were vulnerable to great losses. As corruption of major firms was uncovered, investors scrambled to mitigate their losses and prayed that prosecutors would bring the malefactors to justice. Unfortunately, many of the financial frauds were too complex for prosecutors to successfully build a case, and so, they settled to focus on lesser charges, such as obstruction of justice. As a result, the defendants were given a slap on the wrist and the message was sent that complex financial fraud would not be prosecuted. All these unchecked malfeasances and the excessive risk taking by investors lead to Partnoy¿s main argument that financial markets are not in control as conventional wisdom contends.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.