Thursday, June 03, 2010

Too Big to Fail

I quite surprised myself two weeks ago when I picked up Too Big to Fail by Andrew Ross Sorkin. It's a huge, huge book - 544 pages (including Acknowledgements) and about 50 pages of footnotes and bibliography after that.

More surprising to me was that I thought I might be interested in the topic - the front of the book states "The inside story of how Wall Street and Washington fought to save the financial system - and themselves."

A dry topic for someone who admits no financial acumen, nor interest in Wall Street.

I remember shrugging, thinking, "well, I'll read the first chapter & if it's boring, I'll return it."

Now, it's two weeks later, and I've not only read the first chapter, but I've read the entire 544 pages (I have to remember to write that down for the summer reading program!)

If you haven't guessed already, let me tell you how this book absolutely engaged my attention. This is not a dry book, discussing derivatives, securities, credit loans, etc. and how they brought down Wall Street.

All of the above are mentioned - you cannot write a book about Wall Street without mentioning those mysterious words. But Sorkin does a masterful job of making the reader understand, not the intricacies of these words, but the implications of these words. And the implications are what caused havoc in our economic system.

Sorkin focuses on the people involved in the dramatic events of 2008 - starting when JP Morgan bought Bear Stearns. I remember when Lehman Brothers failed - but I wasn't paying attention to events on Wall Street at the time. It doesn't affect me much - I felt (perhaps still feel) quite distanced from the events in New York & Washington... and can appreciate even more fully why Warren Buffet maintains his office in Omaha instead of New York.

I'll admit, I still don't understand why the CEOs of Lehman, Morgan Stanley & Goldman Sachs despise the short sellers - and why short selling stock is so detrimental to a firm - but I do feel I have a better understanding of the dramatic events of the fall of 2008 and a better understanding of who are some of the big 'players' on Wall Street.

And, I spent time enjoying a well-written book.

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