The nonfiction book Too Big to Fail by Andrew Ross Sorkin, also known as Too Big to Fail: Inside the Battle to Save Wall Street, recounts the events of the 2008 financial crisis and the downfall of Lehman Brothers from the viewpoint of Wall Street CEOs and US government regulators. It was published on October 20, 2009.
Introduction
Book name - Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves
Author name - Andrew Ross Sorkin
Language - English
Adaption- Too Big To Fail (movie 2011)
Based On- Financial Crisis,2008
Genre - Finance, Business, Non-fiction, Economics
Synopsis - Non-Spoiler Alert!
This book focuses on the weekend of September 15, 2012, events that led to the failure of the investment firm Lehman Brothers, the sale of Merrill Lynch by Bank of America, the nationalisation of Freddie Mac and Fannie Mae, and the government's acquisition of 80% of AIG. Importantly, he looked at how the financial markets responded to Lehman Brothers' bankruptcy.
One of the biggest American banks, Bear Stern, failing is where it all began. Bear Stern discovered the bank had an excessive amount of hazardous assets and was unable to pay its liabilities. The broadest and most extensive government intervention in economic policy in history is being implemented by the United States. The Federal Reserve sold support to the failing Bear Stern to JP Morgan in May 2008.
In September 2008, something similar happened to Lehman Brothers, one of the first five American financial banks. The author describes how Lehman suffered from disastrous investments in the subprime mortgage market, which ultimately led to its insolvency and the loss of investor confidence. Lehman first asked Warren Buffett for financial support in the range of $30–$50 billion.
Lehman also made an effort to contact the Korea Development Bank for financial support. The bank also requested financial support from the government. But the outcomes were negative. Several banks, including Bank of America, JP Morgan, Goldman Sachs, Merrill Lynch, and Barclays, gathered on September 12, 2008, at the Federal Reserve in New York to try to come up with a solution to save Lehman.
About the Author
Andrew Ross Sorkin (born February 19, 1977) is an American journalist and author. He is a financial columnist for The New York Times and a co-anchor of CNBC's Squawk Box. He is also the founder and editor of DealBook, a financial news service published by The New York Times. He wrote the bestselling book Too Big to Fail and co-produced a movie adaptation of the book for HBO Films. He is also a co-creator of the Showtime series Billions.
Personal Verdict
Even while I like Too Big to Fail, it has serious flaws. One is that Sorkin seems indifferent to the inherent absurdity that surrounds him. Sorkin never breaks the flow to point out the severity of the situation, even when it is obvious. Additionally, it has the air of a book written by insiders for other insiders. Everyone on Wall Street obviously enjoyed reading the juicy quotes, as did Sorkin. The somewhat gossipy tone served me much less use.
It's as if the massive real estate bubble, mortgage frauds, toxic assets, intricate derivatives, deregulation, and banking greed that led to the 2008 financial catastrophe didn't even exist. With the exception of a minuscule sentence here and there, Sorkin never discusses the causes of the crisis in financial or macroeconomic terms. In fewer than two pages, the securitization of mortgages and collateralized debt obligations (CDOs) are described (in a 600-page book).
The level of information is as precise and detailed as it gets; in my opinion, Sorkin sought into every phone call—landline or mobile—that every executive on Wall Street made or took throughout the crisis. We learn what the CEOs ate when they visit San Pietro, their preferred dining establishment.
Quotes
“There are no atheists in foxholes or ideologues in a financial crisis. Ben Bernanke”
“The Great Recession shattered that consensus for good, destroying the idea that the elites earned their disparate control of the world’s wealth and power.”
“A more enlightened debate should concern the problem of Too Big to Manage.”
Bottom Line
The events it portrays occurred not long after the publication of Too Big to Fail. As a result, it primarily serves as a snapshot of a fleeting phase of a bigger collapse. There isn't really an effort made to infer a lesson from the story, much less provide a recommendation for the future. On the penultimate page, Sorkin briefly, but very broadly, advocates for the need for regulations. Most of the time, the reader is allowed to come to their own conclusions or just shake their head incredulously.
My ratings for the Book are 4 on 5.
You may buy this book from Amazon, Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves
Written by - Melita Pinto
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