Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System - and Themselvesby Andrew Ross Sorkin
Andrew Ross Sorkin delivers the first true behind-the-scenes, moment-by-moment account of how the greatest financial crisis since the Great Depression developed into a global tsunami. From inside the corner office at Lehman Brothers/b>
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A real-life thriller about the most tumultuous period in America’s financial history by an acclaimed New York Times Reporter
Andrew Ross Sorkin delivers the first true behind-the-scenes, moment-by-moment account of how the greatest financial crisis since the Great Depression developed into a global tsunami. From inside the corner office at Lehman Brothers to secret meetings in South Korea, and the corridors of Washington, Too Big to Fail is the definitive story of the most powerful men and women in finance and politics grappling with success and failure, ego and greed, and, ultimately, the fate of the world’s economy.
“We’ve got to get some foam down on the runway!” a sleepless Timothy Geithner, the then-president of the Federal Reserve of New York, would tell Henry M. Paulson, the Treasury secretary, about the catastrophic crash the world’s financial system would experience.
Through unprecedented access to the players involved, Too Big to Fail re-creates all the drama and turmoil, revealing neverdisclosed details and elucidating how decisions made on Wall Street over the past decade sowed the seeds of the debacle. This true story is not just a look at banks that were "too big to fail," it is a real-life thriller with a cast of bold-faced names who themselves thought they were too big to fail.
The New York Times
“. . . His action scenes are intimate and engaging.”
—The New Yorker
“Sorkin’s prodigious reporting and lively writing put the reader in the room for some of the biggest-dollar conference calls in history. It’s an entertaining book, brisk book . . . Sorkin skillfully captures the raucous enthusiasm and riotous greed that fueled this rational irrationality.”
—The New York Times Book Review
“Brings the drama alive with unusual inside access and compelling detail . . . A deeply researched account of the financial meltdown."
“Meticulously researched . . . told brilliantly. Other blow-by-blow accounts are in the works. It is hard to imagine them being this riveting.”
“Sorkin’s densely detailed and astonishing narrative of the epic financial crisis of 2008 is an extraordinary achievement that will be hard to surpass as the definitive account . . . as a dramatic close-up, his book is hard to beat.”
“Sorkin’s book, like its author, is a phenom . . . an absolute tour de force.”
—The American Prospect
“Andrew Ross Sorkin pens what may be the definitive history of the banking crisis.”
—The Atlantic Monthly
“Andrew Ross Sorkin has written a fascinating, scene-by-scene saga of the eyeless trying to march the clueless through Great Depression II.”
“Sorkin has succeeded in writing the book of the crisis, with amazing levels of detail and access.”
“Sorkin can write. His storytelling makes Liar’s Poker look like a children’s book.”
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Read an Excerpt
Standing in the kitchen of his Park Avenue apartment, Jamie Dimon poured himself a cup of coffee, hoping it might ease his headache. He was recovering from a slight hangover, but his head really hurt for a different reason: He knew too much.
It was just past 7:00 a.m. on the morning of Saturday, September 13, 2008. Dimon, the chief executive of JP Morgan Chase, the nation’s third largest bank, had spent part of the prior evening at an emergency, all-hands-on-deck meeting at the Federal Reserve Bank of New York with a dozen of his rival Wall Street CEOs. Their assignment was to come up with a plan to save Lehman Brothers, the nation’s fourth-largest investment bank—or risk the collateral damage that might ensue in the markets.
To Dimon it was a terrifying predicament that caused his mind to spin as he rushed home afterward. He was already more than two hours late for a dinner party that his wife, Judy, was hosting. He was embarrassed by his delay because the dinner was for the parents of their daughter’s boyfriend, whom he was meeting for the fi rst time.
“Honestly, I’m never this late,” he offered, hoping to elicit some sympathy.
Trying to avoid saying more than he should, still he dropped some hints about what had happened at the meeting. “You know, I am not lying about how serious this situation is,” Dimon told his slightly alarmed guests as he mixed himself a martini. “You’re going to read about it tomorrow in the papers.”
As he promised, Saturday’s papers prominently featured the dramatic news to which he had alluded. Leaning against the kitchen counter, Dimon opened the Wall Street Journal and read the headline of its lead story: “Lehman Races Clock; Crisis Spreads.”
Dimon knew that Lehman Brothers might not make it through the weekend. JP Morgan had examined its books earlier that week as a potential lender and had been unimpressed. He also had decided to request some extra collateral from the firm out of fear it might fall. In the next twenty four hours, Dimon knew, Lehman would either be rescued or ruined.
Knowing what he did, however, Dimon was concerned about more than just Lehman Brothers. He was aware that Merrill Lynch, another icon of Wall Street, was in trouble, too, and he had just asked his staff to make sure JP Morgan had enough collateral from that firm as well. And he was also acutely aware of new dangers developing at the global insurance giant American International Group (AIG) that so far had gone relatively unnoticed by the public—it was his firm’s client, and they were scrambling to raise additional capital to save it. By his estimation AIG had only about a week to find a solution, or it, too, could falter.
Of the handful of principals involved in the dialogue about the enveloping crisis—the government included—Dimon was in an especially unusual position. He had the closest thing to perfect, real-time information. That “deal flow” enabled him to identify the fraying threads in the fabric of the financial system, even in the safety nets that others assumed would save the day.
Dimon began contemplating a worst-case scenario, and at 7:30 a.m. he went into his home library and dialed into a conference call with two dozen members of his management team.
“You are about to experience the most unbelievable week in America ever, and we have to prepare for the absolutely worst case,” Dimon told his staff. “We have to protect the firm. This is about our survival.”
His staff listened intently, but no one was quite certain what Dimon was trying to say.
Like most people on Wall Street—including Richard S. Fuld Jr., Lehman’s CEO, who enjoyed one of the longest reigns of any of its leaders—many of those listening to the call assumed that the government would intervene and prevent its failure. Dimon hastened to disabuse them of the notion.
“That’s wishful thinking. There is no way, in my opinion, that Washington is going to bail out an investment bank. Nor should they,” he said decisively. “I want you all to know that this is a matter of life and death.
Then he dropped his bombshell, one that he had been contemplating for the entire morning. It was his ultimate doomsday scenario.
“Here’s the drill,” he continued. “We need to prepare right now for Lehman Brothers fi ling.” Then he paused. “And for Merrill Lynch filing.” He paused again. “And for AIG fi ling.” Another pause. “And for Morgan Stanley filing.” And after a final, even longer pause he added: “And potentially for Goldman Sachs filing.”
There was a collective gasp on the phone.
As Dimon had presciently warned in his conference call, the following days would bring a near collapse of the financial system, forcing a government rescue effort with no precedent in modern history. In a period of less than eighteen months, Wall Street had gone from celebrating its most profitable age to finding itself on the brink of an epochal devastation.
Trillions of dollars in wealth had vanished, and the financial landscape was entirely reconfigured. The calamity would definitively shatter some of the most cherished principles of capitalism. The idea that financial wizards had conjured up a new era of low-risk profits, and that American-style financial engineering was the global gold standard, was officially dead.
Reprinted by arrangement with Viking, a member of Penguin Group (USA) Inc., from Too Big to Fail by Andrew Ross Sorkin. Copyright © 2009 by Andrew Ross Sorkin.
What People are Saying About This
"...his action scenes are intimate and engaging..."
-The New Yorker
"Sorkin's prodigious reporting and lively writing put the reader in the room for some of the biggest-dollar conference calls in history. It's an entertaining book, brisk book...Sorkin skillfully captures the raucous enthusiasm and riotous greed that fueled this rational irrationality."
-The New York Times Book Review
"...brings the drama alive with unusual inside access and compelling detail...A deeply researched account of the financial meltdown."
"...meticulously researched...told brilliantly. Other blow-by-blow accounts are in the works. It is hard to imagine them being this riveting."
"Sorkin's densely detailed and astonishing narrative of the epic financial crisis of 2008 is an extraordinary achievement that will be hard to surpass as the definitive account...as a dramatic close-up, his book is hard to beat."
"Sorkin's book, like its author, is a phenom...an absolute tour de force."
-The American Prospect
"Andrew Ross Sorkin pens what may be the definitive history of the banking crisis."
-The Atlantic Monthly
"Andrew Ross Sorkin has written a fascinating, scene-by-scene saga of the eyeless trying to march the clueless through Great Depression II."
"...Sorkin has succeeded in writing the book of the crisis, with amazing levels of detail and access."
"Sorkin can write. His storytelling makes "Liar's Poker" look like a children's book."
Meet the Author
Andrew Ross Sorkin is the award-winning chief mergers and acquisitions reporter for The New York Times, a columnist, and assistant editor of business and finance news. He is also the editor and founder of DealBook, an online daily financial report. He has won a Gerald Loeb Award, the highest honor in business journalism, and a Society of American Business Editors and Writers Award. In 2007, the World Economic Forum named him a Young Global Leader.
Most Helpful Customer Reviews
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Andrew Ross Sorkin's book is a good overview of the recent financial crisis, much as Bryan Burroughs' "Barbarians at the Gates" succeeded at capturing the deal-making insanity of the RJR Nabisco buyout two decades ago. The book is a little superficial in its reliance on a few key participants for most of the narrative and anecdotes. I worked in the bond rating industry for nearly 10 years, and I was surprised that Sorkin didn't explain why there's no input in the book from any people from that industry. It would have helped explain the critical role the rating agencies play in the overall operation of the financial industry, particularly the structured financings that played such a big role in this crisis. I suspect it was hard to get people to speak on the record when lawsuits still haven't all been completely filed, but it would have been nice if Sorkin had tried to get more detailed explanations from the people most responsible for the dilemma, people structuring and rating the mortgage-backed securities that helped cause the fall of Lehman Brothers and Bear Stearns. It also would have been helpful if he had been able to get some insurance industry experts to give him more insight into how AIG got itself into the business of insuring credit default risks that sank the company even while its primary business of traditional insurance lines remained solid and profitable. The publisher must have been rushing to get the book out, because, to my surprise, there were a number of proofreading failures in the book, including misspellings and grammar errors that should have been caught. There was even a page where the same sentence, in slightly different form, appeared twice in a row. Despite these shortcomings, I found the book an interesting read on a complicated subject, and since Sorkin clearly had unprecedented access to people like the Treasury secretary and the head of Goldman Sachs, it's almost certain to be regarded as the most authoritative account of what these people experiencedm at least until and unless they write their own memoirs.
I feel the author is very soft on the executives of the very companies who brought about the financial crises of 2008 - 2009. He never goes into any of the root causes - the various accounting and packaging practices of bad loans, why the mortgages were issued to people who were obviously incapable or unwilling to repay the loans. Ne never addresses the deceptive practices of mortgage companies. There is a lot of quoted conversations, leading me to believe that he fictionalized actual conversations; he repeatedly states what various executives "believe" but it seems that is HIS, the author's, projecting his own empathy into the story. It is a good chronology of events for a limited period of time. It does make interesting reading, albeit you may develop undue sympathy for the executives paid many tens of millions of dollars a year as you read about their psychological stresses at the possibility of their greed-driven efforts crashing down about them. I expected more hard facts about the crisis from a journalist of Sorkin's stature. I do recommend reading it, though. It is easy reading, although you will have to remember many different names (but he helps with that) and what banks they are associated with. But to get a good understanding of the crisis, you need to read something else.
Fastest, most fun read on the topic. Picks up where Cohan's House of Cards stops (the end of Bear) and follows the story right through TARP. Not much political bias and therefore a must read for anyone interested in the topic.
This is a wonderful examination of the end of the storied history of traditional Wall Street firms, and the near-collapse of our moneycenter banks. Rich in detail, finely written, it is a must read on the recent financial trouble, and the heroic efforts of Paulson, Bernanke, and Geithner to stop the bleeding. One (mild) criticism of the story is that the sheer number of individuals involved in decisions, meetings, negotiations, &tc. seems to overwhelm the story arc. An omission I'd also like to see addressed in a follow up book would be why these firms seem to have been able to ignor Sarbanes Oxley. I cannot figure out why the US Attorney's office is not handing out Sarbux indictments against dozens of individuals, starting with Stanley O'Neal, Dick Fuld, Erin Callan, Anthony Mozillo, etc., etc., etc.
This book is an excellent choice for understanding what happened on Wall Street in 2008. Professional knowledge of how an investment bank or brokerage house works is not required to find this book accessible. The saga of Lehman Brothers, Merrill Lynch, Morgan Stanley, AIG and Wachovia are told in thrilling detail. The level of Treasury Department and Federal Reserve involvement in the events that took place are quite shocking. Even with the beforehand knowledge of how the story ends I could not put this book down. An excellent account how close the financial system came to disaster and the measures taken by the government to save it from total collapse.
I had seen the movie, but wanted to read the book to get a more detailed view. This book reads like a mystery novel! I had such a hard time putting it down. Having it on my nook made it so easy to carry around, so that I could read it whenever I had waiting time. I expected the book to be more political (although the movie wasn't) but there was only the mention of President Bush when Paulson had to confer with him and again only a few words about McCain and Obama. This is all about Wall Street, the infighting, the coldness, the sadness, the dealing - all of it. This book really helped me, an outsider to the finalcial world- to understand this world and the people in it. A great read. Velma Kohl
This book is very well written and provides the details that weren't available in the fall of 2009 when the financial crisis was in full swing. Without a financial background I was clueless when they were mentioning some of the mechanisms of the industry but not so much that I wanted to drop everything and consult a reference book. Had I known what was really taking place at the time, I would have been scared about the collapse of our economy. Greedy people taking too many risks are the reason we have to resort to government regulation.
More than an explaination of what happened, Sorkin takes the reader into the personalities and interrelationships of some of the brightest, and most egotistical, financial people on the planet. a must read for anyone familiar with the industry & most others just for the knowledge. Reads like a novel, only no one could make this up.
From the moment the reader picks up this book and flips through the first pages, their appetite to read more becomes insatiable. Even though it is a long read, it is like reading a murder mystery, where you can't wait to turn the page to find out who done it. The world is the stage and we are part of it because of our very existence in it. The players are real and for the first time the reader gets to see the true make up individuals and their psyches that control our major financial institutions and markets. It exudes death, not of the body, but of the U.S. markets and global economy. In the end, the reader is satisfied by the knowledge that world stability is restored and all is well, at least temporarily. One thing for sure, the reader leaves with a better understanding of the U.S. financial markets and its makeup.
This is essential reading for anyone wanting to grasp the dramatic events culminating in the "Great Recession". It reads like an action thriller with vivid, compelling prose and you feel almost transported. It coud have provided a bit more technical detail, but perhaps it would have muddled the extemely hectic storyline, so I still gave it 5 stars. Overall, a magnificent read that merits a spot on your bookshelf!
This book was a great in debth book about wallstreet and how it crashed! It has taught me a lot. Another book that was recommended to me when purchasing this book was "Life After Foreclosure" by Dean Wegner. Both books really have taught me a lot and are highly recommended!
I liked Sorkin's way of presenting complex historical material. Rather than dry musty financial details alone he adds a nice bit of flesh onto the bones of the decision makers. Paulsen's comment that a firm was in "deep doo-doo" struck me as funny. I couldn't imagine the Treasury chief making such a statement. But Sorkin also brought all the pieces together and caused me to consider the financial meltdown a little differently than before. I'm not sure I've changed my mind but he did give me more to think about. There's a helpful cast of characters at the beginning which you will need. Many of the players were, and remain, unknowns to the general public. If you wish to understand the events that led to TARP and the nationalization of much of the economy, read this book.
The behind the scenes narative will absolutely amaze you. How all the players in the potential financial collapse are connected is scary. It is the good old boy club running our financial institutions. Once you understand the complexity of the financial products it will blow your mind. Just like the movie Wall Street, it depicts how greed kicks in. The lavish life styles and massive egos of those CEOs are the root of all evil.
I actually purchased this book for my grandson's term paper in English, but I got so interested in it that I had to make myself put it down so that I could get enough sleep each night to function at work the next day. This book is really long, but I don't see how it could have been shorter and covered as much ground. Having suffered great losses in my own investments during the American financial spiral Sorkin wrote about, this book held a special interest for me. Sorkin cuts to the chase, names names, and tells it all - a very good book.
The ever-growing pile of books about the Great Recession holds two kinds of tomes: those that pontificate about what went wrong and what should change, and those that detail the minute-by-minute action in the boardrooms of Wall Street and Washington. This book is the second kind. New York Times reporter Andrew Ross Sorkin, who gained access to many high-level financial players, provides an ambitious, remarkably detailed account of the collapse and bailouts of 2008. He accomplishes two noteworthy feats: He digs up information that wasn't widely known, and he beautifully writes a page-turning yarn. getAbstract recommends his book to investors, policy makers and businesspeople who seek a clear observer's perspective on Wall Street's meltdown.
Sorkin loved Barbarians at the Gate and wrote something similar: lots of research, insights and great story-telling. Gives the reader understanding and perspective on the 2008 financial crisis.
This book, like the television show, deals with a race against time. It pretty much centers around the weekend of September 12-14 2008. The central Jack Bauer like character (Hank Paulson, Treasurey Secretary) must attempt to devise a way in concert with several major players, including (Tim Geithner then New York Fed Reserve Chair and Ben Bernanke Chair of the Federal Reserve) to stop a major financial world wide catrastrophic meltdown. And get the job done before the markets open on Monday! The book's author, Andrew Ross Sorkin, is a great story teller. He does a very nice job of explaining who the major Wall Street players are (here are just a few) John Mack,(Morgan Stanley) Dick Fuld,(Lehman Brothers), Jamie Dimon (J.P. Morgan) and Lloyd Blankfein (Goldman Sachs) and how their financial institutions came to power. As a financial writer for the New York Times, Sorkin, is quite adept at not only easily explaining such complex investment vehicles as derivative and swaps, but how these investments led in large part to the crisis. What happens next to Morgan Stanley, Merril Lynch, Lehman Brothers, AIG and Goldman Sachs makes this book a page turner. And if there isn't enough pressure in meeting this impossible weekend deadline Paulson, Geithner, Bernanke and their staffs face several major hurdle, including getting reluctant Congressional leaders to approve an unpopular major Wall Street bailout, getting no help from a concern President who is mortally wounded by his lameduck status and low poll numbers and dealing with a financial meltdown where no one really knows how bad the debt numbers for these failing companies are, so why should another firm even come to their rescue or for that matter no what to bid per share to acquire it! Sorkin does a great job of making you feel that you are actually in the room when the wheeling and dealing is going on between Paulson, Geithener and the Wall Street heads, and the stakes couldn't be higher. The author does a great job in clearly giving an unvarnished and objective portrait of all the players, including Paulson. LIke a Jack Bauer, some may not approve of all the negotiating methods he (Paulson) used, but the idea was to get the job done. The book provides a most entertaining and frightening picture of how truly close we came to the economic brink. Any person who is interested in politics, business or history, will find this a fascinating read.
This is an absolutely gripping adventure story. Those of us who might consider ourselves to be reasonably well-informed students of economics and political history, knew during the chaos of late 2008 that we were watching truly historic events unfold. This book captures both the breadth and the detail of what went on behind closed doors in Washington and on Wall Street. I knew someome would write "The Book" on this subject and this is it. The author has no agenda: no one is made to look evil or stupid. He's just reporting the facts and telling the story in a clear, concise and compelling manner. I couldn't put the book down and I've talked to other professionals that feel the same. If you like Grisham or Clancey, you'll love this book.
Sorkin's book reads like a fast-pace, detailed thriller. The only problem is that the combination of venality, greed, ego and bad decision-making is true and wreaked havoc on the lives of countless innocent bystanders. I don't know how anyone can read the book (or otherwise understand what happened in financial markets over the past ten years) and not support a significant change in public policy that prevents a re-occurrence of this tragedy (which will happen again if we don't do something).
This is a most comprehensivestudy of our current economic dilemma. Authoritive, clear, understandable,entertaining andhard to put down.
Great reference material for anyone interested in understanding the financial crisis of 2007/8.
Loved the style and hard to put down. Showed true character of the over paid ego's that cost the world to much lost wealth. The real title should have been 'TO MUCH GREED TO SUCCEED'
This is a book about arrogant, condescending screwups that say, and actually believe they're the smartest folks on the planet. Author explains what happened and why in the 2008 financial crisis.. You catch yourself thinking maybe these guys are the smartest in the world. None went to jail. None were even charged with a crime. Driven by greed and incomprehensible arrogance they didn't do their job, ruined millions, threatehed the global economy,, and never missed a bonus. They failed spectacularly, sat down with those that are supposed to represent us, and proceeded to resolve the mess at everyone else's expense. They still run Wall Street. They still own our government. They still take our money and gamble with it.