Long-listed for the FT & Goldman Sachs Business Book of the Year Award 2011
The true story of how risk destroys, as told through the ongoing saga of AIG
From the collapse of Bear Stearns and Lehman Brothers, the subject of the financial crisis has been well covered. However, the story central to the crisis-that of AIG-has until now remained largely untold. Fatal Risk: A Cautionary Tale of AIG's Corporate Suicide tells the inside story of what really went on inside AIG that caused it to choke on risk and nearly brining down the entire economic system. The book
- Reveals inside information available nowhere else, including the personal notes and records of key players such as the former Chairman of AIG, Hank Greenberg
- Takes readers behind the scenes at the U.S. Treasury and the Federal Reserve Bank of New York
- Details how an understanding of risk built AIG, but a disdain for government regulators led to a run-in with New York State Attorney General Eliot Spitzer
Fatal Risk is the comprehensive and compelling true story of the company at the center of the financial storm and how it nearly caused the entire economic system to collapse.
|Product dimensions:||6.38(w) x 9.24(h) x 1.21(d)|
About the Author
Roddy Boyd is an investigative reporter who has been uncovering financial market shenanigans for more than a decade. Most recently at Fortune magazine, he also worked at the New York Post's business desk, the New York Sun and Institutional Investor News, and has written for Slate's "The Big Money." In addition to founding the financial investigative reporting website TheFinancialInvestigator.com, he has worked on both the buy- and sell-sides of Wall Street.
Table of Contents
Cast of Characters ix
Chapter 1 The (Noncorrelated) Dream Team 7
Chapter 2 Who Dares, Wins 31
Chapter 3 The Man with the Plan 47
Chapter 4 Changes 77
Chapter 5 The Dirt Below 99
Chapter 6 War by Another Name 121
Chapter 7 The Kids Are Alright 149
Chapter 8 In the Shipping Business 181
Chapter 9 The Preservation Instinct 203
Chapter 10 The Down Staircase 235
Chapter 11 Midnight in September 251
Most Helpful Customer Reviews
I have to admit that I'm only 75% done with the book. However, I can say that I'm a little disappointed by it. I thought a reporter would be a good author and the writing is clunky and not objective (in my opinion). I will definitely finish the book, and I have learned a bit, but I just don't love it.And now I've finished it, but I'm leaving what I previously wrote as I still agree with it. I'm glad I read it but I might go look for other books on the financial crisis of 2008 to see if there is something I like better.
Hard to know what to make of this book, which presents Goldman Sachs as a hero telling truth to the market and Eliot Spitzer as a villain, with Hank Greenberg as his victim. Dowd doesn¿t explain much about Gen Re, the transaction that led to Greenberg¿s ouster from control of the incredibly successful insurance company he¿d built, but even Dowd has to admit that it was an out-and-out fraud designed to fool investors and regulators about the profitability of AIG¿s trading partner, and that anyone apprised of its details would have known that. Dowd presents evidence both ways, but clearly thinks that Greenberg didn¿t really know the facts of the transaction, despite the fact that the reason to laud Greenberg is that the man obsessively monitored risk and insisted on knowing every aspect of AIG¿s business. The problem, and the real cautionary tale, is that Hank Greenberg¿s presence was used as a substitute for actual accounting risk control. Can you call a man a success when he builds a company whose assets and liabilities are greater than those of many countries and that, with him gone, cannot accurately tell you what¿s on its balance sheet? I think that question answers itself.Dowd¿s condemnation of Spitzer suggests that outright fraud revealing, at the absolute minimum, an absence of a corporate structure that could detect and prevent such frauds, should have been written off as inconsequential because AIG was too big to punish. He also argues that Spitzer became megalomaniacal in treating big banks like criminal enterprises, except that they were criminal enterprises that succeeded in looting the economy and are still going. There¿s plenty of blame to go around, and Dowd gestures at that in the end, though he still maintains that Goldman was just exercising good business sense when it demanded to be paid par (face value) for its now-nearly-worthless holdings. He suggests that the government had few choices but to pay that rate (even as he points out that it would have been possible for AIG to refuse Goldman¿s collateral calls and litigate it out¿there¿s an adage, which he repeats, that there¿s a courtroom on every corner in New York), but I¿m not nearly as sure and I just don¿t trust his judgment by that point. However, Dowd¿s more general conclusion is easy to agree with: that repealing Glass-Steagall, which separated commercial and investment banks and thus prevented the kind of disastrous overleveraging we saw in the runup to the crisis, was an enormous and foundational mistake.Also, and this is just a pet peeve, where was the editor? There were three misused homonyms, each of which is plausible but wrong (took the reigns, said his peace, and into the breech).