Tuesday, September 4, 2012

Too Big to Fail

Just completed this book by Andrew Sorkin on the financial crisis which started in 2007 and wrecked havoc around the world and brought the financial system of the most powerful nation in the world to its knees.

The crux of the entire crisis and hence the book is that the economies of the world and not just that, the various sectors comprising an economy are so interlaced that failure of one big organisation can have ripple effect on others and if one of these firms belongs to the wall street, the source of majority of the money, the results are amplified.

The book is very lucid and mostly factual with very little or no inferences from the author. Obviously Sorkin has done a lot of research on the entire chain of events that transcribed during that period and has managed to give an insight into the world of Wall Street. From the fall of Bear Stearns to the US government bailout, all the major deals that happened or could have happened are described in detail.

The book gives a first person view of the key players on Wall Street and how they coped with the worst financial crisis since the Great Depression.

Alan Greenspan's comment on CDOs - "...And I figured if I didn’t understand it and I had access to a couple hundred PhDs, how the rest of the world is going to understand it (CDOs)sort of bewildered me."

and

George Bush's response to the deep debt that AIG had gotten itself in  - “An insurance company (AIG) does all this?” Comments like these give you subtle hints about how the author feels that the entire situation was a result of the greed which drives the Wall Street.


The book does not explain why the crisis happened but gives a behind the scene look at the events that finally led to some sort of stabilization. A word of advice to the readers, try and understand the factors that caused the crisis before reading the book, it will prove to be a real help.The only complain I had is that there are so many characters that sometimes with the speed at which the story moves it gets difficult to keep track of all of them.

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