Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the FinancialSystem--and Themselves

This is an excellent book that reads like something that Dan Brown might have written. But its real. The part that amazed me was the level of detail Sorkin was able to get about behind the scenes conversations that took place. Stuff about how people such as Dick Fuld of Lehman reacted to the problems when it was becoming clear that the company was going down and he was in denial. How Paulson was reacting to things when there were no rules about what to do.

But probably the most interesting parts were how the different personalities were reacting while the ground was shifting under them. At the peak, many of the people involved were literally working 24 hours a day highlighted by a phone call made to Vikram Pandit, CEO of Citibank at 3 am telling how a deal he made at midnight for Wachovia had instead been trumped by another and that that deal had already been signed and blessed by the government. How major decisions were being made on the run and how solid institutions became institutions on the brink in a matter of hours.

The book also explains how companies like Barclays and China Investment Corporation were working behind the scenes as well how Paulson, Geithener and others in the government were scrambling to keep things from collapsing. There is a lot of Monday Morning Quarterbacking going on and some of the things these people did may not have been the best, but they pulled it off and we should all be grateful.

But there some bad guys, namely the short sellers and as usual some in congress. The book makes clear that out of control short selling added fuel to the flames that were occurring and that when we were facing this emergency some members of Congress were focused on their own butt instead of doing what was needed.

There is a huge cast in this book and its is sometimes hard to keep the people and their roles straight, but make the effort. You will be rewarded.

The book details the events, the people and the conversations that roiled the banks in 2008. The book does not really discuss why the events happened. If you're looking to understand why these banks fell, this is not the book to read.

The book is very readable and even at 539 pages, a person can finish it quickly. Another plus is that unlike most NY Times reporters, the author keeps most of his opinions out of the story until the last 2 pages.

His opinions are:

The government allowing Lehman to go into bankruptcy was the catalyst that caused the floodgates to open. This is probably why he spends a lot of the book developing the Lehman story.

He's ambivalent about whether the government players could have prevented the collapse of the banks or even if they did the right things when they did act. But he's quite clear that more banking regulation was needed then and is needed now.

One can disagree with his opinions, but he does well to leave most of them till the end of the book.

A few criticisms:

As mentioned, he does not discuss why exactly these events happened. In the epilogue, he briefly mentions 4 events that percolated over 10 years that conspired to cause the perfect storm in 2008. But he could have spent a chapter (prologue) describing these events and how they conspired to cause the problem. Apparently he's not a banker or an academic, so maybe he didn't feel qualified to do this.

Second criticism: In a few places prior to his epilogue, he lets us know his (negative) opinion of some players. It's obvious his disdain for Chris Cox and Sheila Bair. But he's particularly vitriolic towards the Wall Street Journal editorial page. I thought that as a chronicler, the author should have omitted his opinions of these people/institutions. Except for these incidents, he does largely keeps his opinions out of the manuscript until the last few pages.

Overall, a quick read that details the players and the chronology of events. If all you need is to understand the crisis, then this book should suffice.

After reading two other well-publicized books on the real estate bubble and following market crash, I felt like I had been had. One book, primarily about Lehman, was shallow and written by an egotistical prima donna. The other was too technical and appeared to not have been edited well.
This book was written by a finanial author and is fair, thorough, and puts everything in perspective. It is well-written and flows for an easy read.
If you have any interest in financial history, this book belongs on your shelf along with other classics like When Genius Failed, Barbarians at the Gate, and the Smartest Guys in the Room. Ignore the poor ratings by those who were disappointed in the Kindle price. That is another issue.

I have read many books on last year's economic crisis, and this book if not the best is certainly one of them. It is a well-written description on literally a day to day basis of the events in NYC and DC that changed our economic landscape forever. The book allows us to know the thoughts of many of the major participants and details the reasons for the actions taken, and shows us how close we came to an economic collapse. I strongly recommend it. Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System---and Themselves

You will like this book if:

(1) You quickly grab the magazine People out of a stack that includes the WSJ and Economist.

(2) You like the way children's books have a purely linear plot trajectory without the bothersome nuance or multilayers of say an Iago character.

(3) You really think that despite the press reporting that the little time left in W's administration made it impossible for Paulson to accomplish much as Treasury Secretary (2006 to the end), Paulson took up the challenge of doing something big (see pg. 43 "Nothing could have played more effectively to his [Paulson's] immediate sense of buyer's remorse [on becoming Treasury Sec.]--and motivate him to overcome the challenge."). Really? Paulson decided "I'll show 'em" and set in motion the financial collapse? That isn't even what the author intended but that is what the page says.

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I actually really expected and wanted to like this book. I was shocked at how bad it was. It is obvious the author is more interested in political connections and market timing of the book than actual reporting (with Fuld as the primary source).

Maybe the mystery of complex derivatives clouds what's wrong with this book, so here is a simple thought experiment that explains it. Imagine you wanted to learn about the Exxon Valdez oil spill in Prince William Sound in 1989. You pick up a book written by a reporter for the New York Times who interviewed everyone involved in the spill. You have the following basic questions: Was Prince William Sound ecologically pristine or already spoiled prior to the spill? Was Prince William Sound considered a tricky run for tankers? What actions did the captain of the Valdez take immediately before it ran aground? Did Exxon prepare a risk assessment for this run? Did Exxon discuss double-hulled tankers specifically for this run to prevent oil spills? Did BP, Shell, or Chevron run tankers through this same run without incident? Is there a company that has always avoided spills?

Sticking with this thought experiment, about fifty pages into the book you realize the author has passed by these basic questions. Instead, the book merely interlaces into the post-spill chronology trivial facts such as: what the lighthouse officer who took the emergency call from the Valdez ate the night before the spill, what the captain of the Valdez claimed was the biggest marlin he caught off the coast of South America, or what the Exxon executive who was sent to Alaska to manage PR said he shot in 18 holes of golf at Torrey Pines the day before the spill (there is about 1 per page in "Too Big to Fail"). The book then spends its remaining pages on this linear post-spill chronology of Exxon officers meeting with government officials. These conversations focus on how best to clean up the spilled oil. An epilogue does gloss over, untied to any actual reporting, what might have contributed to the spill. You are left wondering why you bothered to read the book.

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With so much media glittering about, and much of it worth paying attention to, it stinks to get fooled by poor quality media. The lesson is that nonfiction books in print for only a few months are rarely harshly reviewed. A hopeful note is that these Amazon customer reviews of Dan Brown's latest fiction did seem to outpace any planted 5-star reviews, and a New York Times op-ed contributor wasn't afraid to hammer Brown on that book in the Book Review, but it is less likely to occur with nonfiction. If you are still reading these comments, I hope you save yourself from reading "Too Big to Fail" because it makes no attempt to analyze: What caused this financial crisis? What actions did these CEOs take before the crisis? How extraordinary were these responses to the crisis and how did they diverge from prior responses? Can future crises be avoided? What was different about JP Morgan, Chase, and Co.?

Seriously, how hard would it be for a financial reporter to sit down with the financial records of all the major banks and investment banks and put together a mortgage-backed derivatives exposure graph for each company that shows where JP diverged? The post-crisis stock values of JP (JPM) and Citi (C) suggest this information is available in the public domain. Thus, the only plausible explanation for why the book avoids these questions is the author's lack of financial acumen. In view of this problem, the People magazine style reveals itself to be not just expedient but obligatory.

The resulting storyline is simply, "Paulson said 'we are going to do...' and then the CEO responded '...'" without the context of: What caused the crisis?; How extraordinary was that response by Paulson in the context of prior crises?; Is Paulson's response likely to be successful 5 years from now?; Is another crisis likely? Without any effort to analyze these larger and more basic questions, the storyline is indistinguishable from a children's book.

The lack of reporting in "Too Big to Fail" mirrors the lack of real worth in the pure arbitrage of mortgages. I defy anyone to post something they read in this book that was new information that changed their view of the cause of this financial crisis. Assuming no one is able to cite anything new, defenders of the book are left to claim it as a behind the scenes account of the events. How useful is that information when the important question is why some financial institutions were deemed in late 2008 too big to fail? I don't think a behind the scenes storyline adds anything to the larger and more basic question of what exactly makes an institution too big to fail.

Maybe it is asking too much, but could a reporter with good sources and good analysis of empirical data show mathematically what line exactly in the sand Paulson and Bernanke committed our financial system to uphold as too big to fail? Then, using that mathematical model the even more interesting question becomes: would any Great Depression era financial institutions even have been deemed that big, ie, too big to fail, had Paulson and Bernanke applied that mathematical formula to the Great Depression? Restated, does the present top-heavy nature of our financial institutions (which might be even more pronounced than during the Great Depression) make the system indistinguishable from a state-run system and mean too big to fail is with us for good and antitrust laws should break up these institutions, or does the empirical analysis reveal something else? Those are the questions that I hoped a New York Times reporter would dig into but the gulf between this book and those questions is: too big to describe.

I was interested in knowing what goes on behind the scenes in these financial crisis times. I thought maybe it would be a little dry reading matter, but found it was as hard to put down as an adventure novel. Very indepth without any apparent bias in my opinion on the author's part.

Andrew Sorkin presents a cogent (if myopic) insider's chronicle of how the worst financial crisis since the Great Depression unfolded--at least in its late stages. He takes you into the board rooms and executive suites of some of the worlds' best known financial institutions: Lehman Brothers, Bank of America, Barclays, Meryl Lynch, Morgan Stanley, JP Morgan Chase, and Citigroup, to name a few. _Too Big to Fail_ is a compelling narrative--highlighting the most powerful figures in finance--both public and private sector--painting portraits of unmitigated egotism, unbridled greed, and the Wall Street-Washington deal-making that shielded the financial institutions from the folly of their own ineptness.

In fairness to Sorkin, he didn't set out to analyze what happened as much as to report on the players and their responses, the interpersonal dynamics, etc., within the unfolding events. This, I'm sure, contributed to the myopic perspective of the book. Perhaps had he set a more historic agenda at the onset (e.g., what role deregulation since Reagan played in the creation of this recession) we might better understand the duplicity of the financial industry and policymakers--on both sides of the aisle--who extol the virtues of a free market but then rush to protect the failed but greedy institutions with tax dollars.

Sorkin elucidates the beind-the-scenes drama and, though he doesn't come right out and say so, he clearly has favorites (Geithner, Paulson, Benanke, McDade) and those he disliked (women: Callan and Bair; those who disagreed with Geithner and Paulson: Cox). Indeed, Callan, Bair, and Cox were presented as flat, one-dimensional caricatures, conveying interactions descriptions only through the eyes of their detractors.

I'm curious to know how the story would have read had it been told from the perspectives of, say the CEO of Wells Fargo, which assiduously avoided sub-prime lending but was roped into the deal-making by Paulson, or Charles Schwab, whose company holds over a trillion dollars in assets and, likewise, stayed clear of the more toxic investments that crippled so many others. How would an in-depth representation of the perspective of say, Sheila Bair, Chair of the FDIC, who was reluctant to infuse tax dollars into the system have informed the narrative? At least these perspectives would have enriched and rounded out the perspectives at the elite level. (It would be way too much to ask, I suppose, that some of the more populist members of Congress--on both sides of the aisle--be interviewed for such a project...)

That said, I did find the book to have been a compelling read. If you thought the average sub-prime mortgage holder was greedy for signing contracts on homes they simply could not afford, just take a peak at the avarice on display by our financial institutions, which compounded the poor judgment and greed of the sub-prime homeowners by a factor of a hundred thousand, at least, and the complicity of Paulson, Geithner, et al, in shielding them (with our money) from the consequences of their actions.

Sorkin has done an admirable job of compiling a sort of play-by-play history of the recent financial crisis. He has interviewed all the key people and gives the reader a sense of how quickly events were taking place and how decision makers formulated policy as best they could in adverse circumstances.

However, the book is sorely lacking in any deep analytical insight and reads like a gossipy People Magazine version of the crisis...i.e., Dick Fuld telling his wife that "It's really over" as his eyes welled up with tears, or decriptions of tired investment bankers racing downtown to the Fed on only four hours of sleep. Relevant questions that are left unanswered might have been the following: What lead to the crisis? What does it mean to have a financial industry dominated by institutions that are "Too Big to Fail"? Should the financial industry be able to support the failure of a major institution without needing government intervention? Should the banks now be dismantled? Addressing these questions is clearly not the intention of Sorkin's book, but still, some analysis of the events would have made his book much more than a simple chronology of the daily movements of the key actors in the crisis.

Furthermore, even though the book is focused on the daily events, it is often confusing exactly what date in history to which Sorkin is referring and what the financial markets or a specific company's stock was trading on at that time. It makes me think that he is a bit too detached from the financial markets to have a good understanding of some the events that were taking place.

The book is also littered with both spelling and factual mistakes, which makes me think that Sorkin cranked out the book in not more than a thirty day stretch. Here is a sample of some obvious miskates that at least a copy editor should have caught: On page 70, "price" is spelled "pricve"; Page 310 reads "they need o be prepared"; and perhaps most embarrasing, page 85 reads "Alan Greenspan, who was to fiscal policy what Warren Buffett was to investing..." Greenspan, as Chairman of the Federal Reserve, was responsible for setting monetary policy, not fiscal policy, as the latter (tax policy and government spending) is determined by Congress. Also Buffett is still currently investing so it should probably be written as "is to investing."

In sum, its a rather disappointing book that, despite the catchy title, will probably add little value to one'e understanding of the crisis. However, if you happen to be on a beach and have just drank three cocktails, it might be just the book you're looking for.

I cannot recommend this book enough. Sorkin does an incredible job at making you the fly on the wall amidst all the drama that unfolded during the financial crisis. This is incredible history in the making and to capture the emotion and panic of all the characters making the spur of the moment decisions that will shape our country's economic health for years to come is fascinating. A must read.

"Too Big to Fail" by Andrew Ross Sorkin is a masterpiece of reporting. Based on more than 200 interviews with virtually all of the major and minor players involved in the financial crisis, the book is as exciting as any adventure fiction I've read. If it were made up, you might be tempted to say that it was too far-fetched to be believable. If Sorkin doesn't win the Pulitzer Prize for "Too Big to Fail," I'll be disappointed. The book traces the events leading up to and immediately following the fall of Lehman Brothers. It is a detailed behind-the-scenes minute-by-minute exposition of what all the players did, which includes such well-known names as Paulson, Bernanke, and Geithner, and such pillars of the U.S. financial structure as Citibank, Goldman Sachs, Morgan Stanley, AIG and others. I was impressed by how smart and dedicated the major and minor players were, and how adrift experienced people can be when faced with a unique situation which challenges their beliefs and prejudices. If anyone thinks that any of the Wall Street players are worth the money they are paying themselves, then this book will be a road map to reducing their salaries for, in the end, they behave and think pretty much like the rest of us. In my opinion, the person who comes out best in this book is Hank Paulson who, as Secretary of the Treasury, provided leadership, guts and the intellectual honesty to change his mind and abandon ideology that wasn't working. The Wall Street titans were, in many cases, simply pathetic. I recommend this book to anyone who is interested in reading a good book even if you're not interested in the subject matter. Just pretend that you're reading a John Grisham novel and you won't put the book down.

When Vanity Fair magazine excerpted this book last month, I printed out the article and eagerly began reading. On page one, I realized I'd just wasted paper. The bottom of that page contained this incredible error in a description of Henry Paulson's worries at the depths of the financial crisis:

"...Treasury bills were trading for under 1 percent interest, as if they were no better than cash, as if the full faith of the government had suddenly become meaningless."

The identical phrase is also found on page 417 of this book (though Amazon reports this as page 425).

For the uninitiated, the fact that Treasury yields had fallen to less than 1 percent was a sign that government debt was seen as a safe haven -- that the full faith of the government had suddenly become the _only_ thing that was meaningful during the crisis. As money piled into Treasuries, their yields fell, reflecting their safety.

This is not an incidental bit of trivia. The fact that the federal government can continue to borrow very cheaply has been a very lucky break for the United States, allowing us to fund things like bailouts and fiscal stimulus instead of imposing austerity as other countries in similar situations are usually forced to do.

Economist Dean Baker and many others have expressed their bafflement at Sorkin's misunderstanding here. It's hard to believe it's an editing error, and Sorkin has written some other howlers in the New York Times. The most likely explanation is that he doesn't understand the relationship of yields to prices for bonds, and for a financial reporter for a major newspaper, this is appalling.

This was the most tedious rendition of the financial crisis I have read. I kept waiting for insight as to why Lehman was so vulnerable, and why Merrill "was next" to go, and why AIG was so poorly financed. What happened to make these firms so insolvent? You'll have to look elsewhere for what happened to make these firms collapse. If you like soap operas here is more than 500 pages of "he said, she said"

I was amazed by "Too Big To Fail". To me Scorkin pulled an extraordinary journalistic/literary feat. The reasons:

a) Pace: the book reads like a thriller. And it keeps the reader riveted even when the outcomes are known. I believe this is because Scorkin focuses strictly on the human side (therefore no momentum is lost on technical stuff) and because of the technique of shifting rapidly (with incredible adroitness) from one context to another.

b) Balance and fairness: the "cast of characters" is depicted fairly. The CEO's and government officials behave as human beings with failings and strengths. This may seem trivial, but read the recently released "Gods at War" and you will see extremely successful businessmen (e.g. Microsoft CEO Steve Ballmer) judged lazy or greedy with little evidence for such judgement. In "Too Big.." even the (potentially) "bad guys" (e.g. Dick Fuld, Lehmann CEO) comes across as fairly portrayed.

c) Clarity: the book is really "easy to read". Scorkin writes in simple language with simple sentences about things we can all understand.

d) Empathy: the fundamental subject matter of the book, that is, the immediate reactions and feelings of people under pressure and in power struggles is of universal interest

A phenomenal and unique effort, really deserving of the accolades

GREAT RESEARCH: Sorkin deserves a lot of praise for the countless hours of interviews and information gathering he had to go through. It is well researched and provides a blow by blow account of how the CEOs of Wall Street, along with Paulson and Geithner, went through a gut-wrenching few months of 2008 in the heat of the crisis.

WHAT THE BOOK ISN'T: This is NOT a book that will teach you about the origins of the crisis. It also does not explain in adequate detail why exactly the investment banks fell into dire straits and how they managed or failed to save themselves. I got the sense that Sorkin didn't fully understand (or didn't want to bother with) the details of repo markets, CDOs, mortgage-backed securities, and trading practices among the investment banks - all of which are critical to an in-depth understanding of what happened. This is not a financial/economic history book.

WHAT THE BOOK IS: The book is, however, a dramatic play-by-play of the wheeling and dealing that occurred in the corridors of Washington and the boardrooms of Wall Street to stave off disaster. It is reminiscent of "Barbarians at the Gate" in that the focus is on the human drama at the most senior levels of business. As a banker myself, I really enjoyed reading about how these titans of finance were desperately flying by the seat of their pants in a helter skelter environment, just totally winging it as no one really knew what was going to happen. The book shows that even at the highest levels of business, there is no rocket science involved in such dealings.

TERRIBLE EDITING JOB: What is inscrutable is the poor writing and editing of the book - it is as if Sorkin and the editors were working under some crushing deadline, which is puzzling because a year has passed since the crisis. Just one more week of editing and revising would have achieved the following:

1) get rid of annoying typos, misspellings, poorly crafted and run-on sentences, and even one instance of a repeated sentence;

2) significantly shorten the book (there is just way too much detail on every single meeting that took place) - I began to get a headache, literally, trying to remember every banker and every subplot. It's like reading War and Peace.

3. Provide more analysis of what is going on: Again, either from time constraints or exhaustion, Sorkin does not provide thoughtful commentary on what was going on. Too often he is just chronicling the discussions that took place.


However, if you are interested in such dramas in the business world, it is still quite interesting.

And if you want to get a real understanding of the forces at work in this economic disaster, read "How Markets Fail: the Logic of Economic Calamities" by John Cassidy. It demonstrates that such economic crises are intrinsic to the fundamental structure of our capitalist system.

This is Woodward-style reporting that re-creates dialogue verbatim, skims along the surface of events, and yet virtually never addresses what it means, how we got here, and where we should go from here. Rather than any depth of inquiry, what the reader gets is descriptions of the maneuverings of extremely arrogant and rich men as if they were celebrities in show business. Moreover, the book largely assumes that the reader understands the mechanisms of banks, the FED, the FDIC, the SEC, and the Dept. of Treasury. At least for me, this reflects a pathetic lack of intelligence and nerve that hides behind journalistic artifice. It is a superficial, timid, and insider view of one of the most colossal failures in both business and policy of modern times.

The failings of this books are legion. First, the author offers virtually no overview of the institutions, preferring to explain them off the cuff, so the reader gets no sense of context or how they might work. Second, the financial instruments (derivatives, mortgage securitization, etc.) are also explained inadvertently, adding to the confusion that non-specialists feel, and many acronyms remain unexplained. Third, the author completely fails to cover the role of the rating agencies and how they became as corrupted as Arthur Andersen did, trying to play with the big boys. Fourth, the author gives little explanation of the policy instruments, regulations, and other tools available to policy-makers. Fifth, the author assumes that the reader understands how the players feel and see things - I was confused innumerable times when he labelled some incident "humiliating", or someone became a "laughing stock", or some other emotion that appeared abruptly and without context.

Thus, I can only assume the author wrote for businessmen who know all about these issues already, who wanted a blow-by-blow chronology of every obscure remedy and tactic that was considered, i.e. every little negotiation or ploy or hope or merger plan. It is boring and incomprehensible - what they would mean is glossed over. Now, I write about businesses for a living and I wanted basic explanations, but found virtually none. It was tremendously frustrating, given that the book is almost 600 pages!

So far as I could tell, beyond the particular mechanisms themselves, the crisis arose because: 1) by ideological preference, regulation was lax and unenforced, which 2) enabled bankers to aggressively develop techniques that provided fees (i.e. short-term profit) while increasing the liquidity of normally illiquid assets like mortgages; 3) these instruments, buttressed by AIG insurance, flowed so easily that the major institutions became intertwined so that they were all dependent on eachother as if the legs of a massive house of cards (creating only the illusion of reducing risk with "free market" mechanisms); 4) mortgages and credit were so loose that many homeowners lived way dangerously beyond their means. Once the real estate market cooled (i.e. house prices began to fall, bursting a speculative bubble), the entire system began to teeter. To remedy this, the only thing that the government could fall back upon was hasty dealmaking (mergers, sales, etc.) and injections of liquidity to prevent insolvencies that would cause the entire system to collapse. We came very close to a collapse that would have dwarfed the Great Depression.

I can only imagine how a better journalist with some intellectual and emotional depth - say, a Halberstam - would have written about this as a morality tale that also explains the context and institutions and practices more clearly. Afterall, the entire direction of modern capitalism is in question and we may be at the most important crossroad of this generation. Terrible mistakes were made at taxpayer expense, we didn't learn from past mistakes, and now the firms are showering bonuses on the players with the presumption that all is again well. Etc.

I cannot recommend this book. WHile I found some useful items in it, most of it can be skimmed for the handful of valuable nuggets that are sparely scattered throughout the book. It is an unbearably mediocre performance.

Book Review: Lessons From Andrew Ross Sorkin's "Too Big To Fail"
By Ravi Nagarajan
Published on January 5, 2010 at 6:05 pm
Originally published on The Rational Walk: [...]

Most outside observers had difficulty keeping up with the momentous events of the weekend of September 14-15, 2008 with all of the twists and turns that finally led to Lehman Brothers' historic bankruptcy filing, Bank of America's purchase of Merrill Lynch, and AIG's bailout only a few days later. Ever since that tumultuous period, there has been a need for a comprehensive book covering the behind the scenes events. Andrew Ross Sorkin's Too Big To Fail has succeeded in delivering exactly what is needed to gain a better understanding of these historic events.

If newspapers are the "first draft of history", Andrew Ross Sorkin played a major role with his New York Times coverage of the financial crisis in 2008. Although Mr. Sorkin is only 32 years old, he has obviously been able to build up a massive network of contacts on Wall Street and in Washington. Mr. Sorkin's coverage spans the timeframe from the failure of Bear Stearns up to the passage of the TARP legislation, but the narrative really shines when it comes to the events of a September weekend when the financial system came much closer to total collapse than anyone on the outside could have realized at the time.

Mr. Sorkin's book has received a great deal of media attention and book reviews, but there is also a need to step back and think about the lessons that must be learned if future crises are to be avoided. The inability of Washington to come to any agreements on financial system reform was a significant failure in 2009, but one that received little attention outside the financial press. With each passing week of relative "calm", chances grow greater than another crisis may be required to prompt reforms.

Greed and Fear

The old adage that a balance between greed and fear creates equilibrium on Wall Street seems hopelessly out of date in light of the revelations in this book. In the "text book world", investors and other players in a market system need to be driven by the profit motive ("greed") but decisions are tempered by a desire for safety ("fear"). For many decades on Wall Street, the partnership model in investment banking seemed to keep the level of risk aversion high enough to prevent overreaching (for a great book on the old model at Goldman Sachs, for example, see Charles D. Ellis' The Partnership).

One can argue that many leading Wall Street players lost huge sums of money in the 2008 crash, so the absence of more "fear" in the system cannot be explained merely by a change in the ownership models of the investment banks. Indeed, an absence of adequate levels of risk aversion extended to Main Street and Washington as well. Rep. Barney Frank's famous declaration in favor of "rolling the dice" with softer underwriting standards for mortgage lending as well as the reckless disregard of financial prudence by many subprime borrowers cannot be ignored.

False Illusions and Egos

From the outside looking in, Wall Street and Washington are populated by highly confident, assertive, and competent individuals who seem equipped to carry out their responsibilities in a capable manner. While there are many individuals who fit this description well, some of whom appear in Mr. Sorkin's book, many others appear to suffer from the human defects that affect everyone else. At several points in the book, we can see cases where ego prevented otherwise intelligent actions from being taken.

For example, why did Lehman Brothers' CEO Dick Fuld, shocking even his own team, attempt to abruptly change the terms of a nearly sealed deal with Korea Development Bank in early August that would have valued Lehman at a premium and likely saved the firm? Was it a matter of seeking better terms for his shareholders, a question of ego, or confidence that a government bailout would be a backstop if all else failed?

There are countless other situations in the book where the reader, with the benefit of hindsight, asks: Why?

Government Saviors?

Government players hardly come out of the story looking like heroes either, with the possible exception of Treasury Secretary Hank Paulson who had the unenviable task of coming up with solutions for the crisis without appearing to favor a bailout of his former colleagues at Goldman Sachs. Throughout Mr. Sorkin's account of the events, it becomes quite apparent that helping Goldman was probably the last thing on Mr. Paulson's mind.

Timothy Geithner, the current Treasury Secretary, was President of the Federal Reserve Bank of New York during the crisis. Mr. Geithner comes across as the main deal maker for the Fed while Chairman Ben Bernanke takes a much lower profile role. While there is no doubt that Mr. Geithner played a critical role, he often comes across as authoritarian in terms of his tactics. For example, at several points, he makes threats or orders bank CEOs to take action during meetings and simply leaves the room asking to be notified when a solution is in place. Whether this was necessary or not during these remarkable times is an open question, but this is not how we should want government officials to behave in normal times.

President Bush hardly appears in the narrative and seems quite detached in the few occasions where he is being briefed on the crisis. For all practical purposes, Secretary Paulson was calling the shots for the Executive branch of the Federal Government throughout this process. Sen. Barack Obama made a few appearances in the book (as well as on Secretary Paulson's calendar) but Sen. John McCain hardly appears at all which is surprising given that he famously suspended his campaign in order to return to Washington and work on a solution for the crisis.

Financial Regulatory Reform

One of the interesting aspects of the book is the degree to which government officials pushed to "marry" commercial banks and investment banks during the height of the crisis in September. It seems like every possible permutation was considered, to the point where Mr. Geithner was referred to mockingly as "E Harmony" in a reference to the online dating site. At the same time, many in government blame the 1999 repeal of the Glass-Steagall Act, which prohibited the union of commercial and investment banks, for precipitating the crisis.

While the idea of giving investment banks access to stable deposits through commercial banks had a great deal of merit during the crisis, such mergers also created ever larger institutions, many of which are considered "too big to fail". It seems that society must decide which is the lesser of two evils: Government regulations that seek to keep financial institutions small such that none can become "too big to fail" or heavy handed regulations that properly govern mammoth institutions that are obviously "too big to fail".

Wall Street: Pick Your Regulatory "Poison"

Wall Street cannot have it both ways: If regulations are repealed that then allow financial institutions to grow so large that a failure would have systemic impacts, then regulations governing the conduct of these institutions is essential to avoid future crises from developing. On the other hand, if we accept regulations that prohibit mergers that will result in massive institutions, Wall Street firms should have more flexibility to conduct their ongoing affairs without as much regulatory scrutiny since the failure of any one institution will not be systemically important.

It seems preferable to have "blocking" regulations such as Glass-Steagall rather than "operational" regulations required to govern massive financial institutions that are of systemic importance. A "blocking" regulation is not as intrusive into the day to day operation of firms and is less likely to throw sand in the gears of capitalism. In contrast, the regulatory regime required to monitor massive systemically important institutions will, of necessity, be intrusive and bureaucratic.

"Too Big To Fail: The Sequel"?

There are many potential solutions that should lead to a more stable financial system going forward, but each passing week makes it less likely that reforms will be made. As the economy recovers and "business as usual" returns to Wall Street, the seeds are now being planted for the next crisis. While no doubt capable of the task, we should hope that Mr. Sorkin does not have the opportunity to write a sequel to Too Big To Fail. The consequences could be even more severe.

Andrew Ross Sorkin has delivered the gold standard in reporting on the financial meltdown. His detailed accounts of meetings and conversations between key players in the crises indicates that his depth and breadth of contacts far exceeded other writers who have tackled this subject. His research and insight into provide the reader with a sense of being there and the excitement builds throughout the entire 600+ pages.

If you are looking for an education and detailed description of not only what happened but, why it happened and the behind the scenes machinations that went on to mitigate the damage, this is the definitive tome.

I've read all the current books on this subject. This is the book to have.

Boy, I really struggled to come up with a rating for this book. Having just finished and reviewed "The Big Short", I am obviously not sympathetic to breathless detailed reporting about a bunch of finance "studs" supposedly saving the world. (One wonders why I bought the two books; I guess I was looking for insight.) At any rate, this book has more depth and is more finely reported than "The Big Short", and has great narrative. On the other hand, if I thought 300 pages was too much to read about Wall Street jerks riding on the backs of the ordinary folks in the herd and driving them off a cliff, well then, surely 500 pages is WAY too much. I kept looking for a moral to appear, or a new flash of insight. What I got instead was a bunch of "oh my God this is stressful" and "and then can you believe it they had another meeting in the 31st floor conference room" and "he worked his cell phone constantly that morning, hoping to prevent the liquidity crisis" and so on. (Those are not quotes from the book; they are just my paraphrase of the gestalt.) Yes, yes, I am sure that these are the superstars of global finance upon which we all depend. And, yes, yes, I am sure the global economy was at the brink for a while there (and probably still is, actually) due to seductive lending practices driven by greedy bankers with way too much opportunity to burn us all. But... My point is the same as with "The Big Short". This is probably a better book from a technical perspective, and both of course are pretty decent from that technical perspective. So, if you're sure this particular world matters and you want to know how it works and who was involved back when...read it. If not, find something more meaningful. With apologies.

I thought I knew a good deal of the story and didn't really care for the characters involved - that is before reading this book. It is really well written, and I admit I became absorbed in this story. Very low on analyses of wrong-doing, and what went wrong where (some people should be TRULY ashamed that their personal greed participated - over many years - in creating the financial crisis); this is more written as a thriller - and it really, actually works. Kudos to the author.

I was left with many questions though - as it is written as a thriller-documentary, the author reports from several conversations between really few people, and puts in many phrases referring to what the participants felt during this and that. It makes me wonder to what degree I am reading 'artistic freedom' and to what degree this and this actually happened. Another thing I didn't quite anticipate was wondering afterwards whether anyone else would have handled the crisis better. In hindsight it is clear something else should have been done at this time and that, but in hindsight everything is simple. The authors shows the conundrum Paulson, Geithner and the others faced underway - not without a certain portion of sympathy.

However, with such detail, and such understanding - I would have liked a discussion also of why the events unfolded as they did, not only a chronology - even though it was masterfully told.

I read this book and it was easy to read (for a financial book) and I enjoyed reading where my money went. You cannot believe the cast of characters and you do need a scorecard to keep them somewhat separated. But it was fascinating reading and there are some heroes and also some who should be in prison.

This is a fascinating account with a lot of inside information that almost puts the reader in the shoes of the major personalities. At times it reads like a suspense thriller, and even though much of the outcome is commonly known, I couldn't wait to see what happened next. I found myself rooting for the "bad guys" (the bankers and the government officials who caused this mess) more than once, partly because you want them to find the solution and partly because you get a close look at how the crisis affected them personally.

Some of the chronology is out of sequence, especially in the first half of the book, and some of the technical terminology and mechanics of the financial system are not adequately explained for the layman. The interconnections between the various institutions was mind-boggling, but that seems to be just as much an indication of the overall problem as it is a shortcoming of the book.

The author's conclusions are thought-provoking and tie all the events together nicely. All in all a good read.

The litany of books on the 2008 economic crisis covers a lot of ground. There are a plethora of good books that have come out thus far (and plenty of bad ones). My reading has already taken me through some books that I find dangerous in their ideology, but also some that are remarkably astute. What I have not come across until this latest addition to the series is a book that was nearly impossible to put down. Andrew Ross Sorkin's Too Big to Fail put an end to that. While I have over a dozen books to complete still in this project, and am backed up more than that with books I have completed but not yet reviewed, I can safely say that no book will prove to be as much fun to read as Sorkin's. I recommend it for any reader who has the ability to take down over 500 pages of a brilliantly-written suspense thriller.

Sorkin's book does something that very few books written about the crisis will be able to do: It narrates a series of events with virtually no ideology or partisanship whatsoever. I can honestly say that after finishing the book I still had no idea what Sorkin believes about the TARP bill, the nature of Wall Street, the role of lawmakers in causing the collapse, the merit (or lack thereof) of the Federal Reserve's response to the crisis, etc. Sorkin tells the story of the events leading up to, and immediately following, last September's week from hell (the week that included the bankruptcy filing of Lehman Brothers, the government bailout of AIG, and the emergency sale of Merrill Lynch to Bank of America). Intertwined with the narratives of that fateful week, Sorkin incorporates extensive biographies of the lead characters including Henry Paulson, Tim Geithner, Richard Fuld, Ken Lewis, Jamie Dimon, Lloyd Blankfein, and many others. By the time I was done with the book I felt like I knew the characters personally. His research is comprehensive and his list of sources unmatched. No major character in this story has come forward to deny his version of any of the major stories. Whether someone is a hopeless obsessive of these events (like me) or not, the book is wildly entertaining, completely fascinating, and extremely well-told.

I do have to interact with the events described in this book at some point, and I intend to do so in greater detail when my review series is complete. I do not accept any version of the 2008 catastrophe that either totally villainizes Henry Paulson, or totally vindicates him. My interest in this review series is ideological: I believe that the Libertarian-anarchist crowd, and even more disturbingly the Keynesian-leftist crowd, have axes to grind in their portrayal of the crisis that must not be left unaddressed. Sorkin's book does not pose any such problems. The complex issues he addresses require an economic thinker like myself to formulate opinions, but he does so without poisoning the well. I did not complete this behemoth book with any more clarity about the propriety of TARP, the role of short sellers in the financial crisis, or the moral hazard embedded in much of Uncle Sam's reaction to the crisis. But what I did get out of reading this is an incredible amount of color on all the aforementioned issues (and others) that I desperately needed. The proper ideological commentary on September of 2008 is coming, but in the meantime, kudos to Andrew Ross Sorking for not attempting to provide that commentary, and instead providing me 550 pages of reading bliss.

It reads like a fictional spy novel but is sickeningly all too real. Maybe it is my ignorance in matters of finance but the greed and hubris laid out by Sorkin was titillating in the abstract until flesh and blood pictures of the characters were presented in the middle of the book. Some looked like monsters but not all. Bernie Madoff rightly belongs in jail but no less many of these.

A fly in the wall account of one of the most spectacular near-catastrophic collapses of the financial system in modern history.

Central characters include Hank Paulson, U.S. Treasury Secretary and Timothy Geithner, then President of the Federal Reserve Bank of New York. And of course, the CEO's of some of the world's largest banks and investment houses.

There is particular emphasis on the fall of Lehman Brothers and the events that led up to it's bankrupt demise in late 2008.

The phone calls, e-mails and conversations that took place amongst the players is so detailed and sometimes absorbing. Your eyes may roll when you immerse yourself into the wheeling's and dealings that went on in the seats of government and corporate power.

Author, Andrew Ross Sorkin, a financial reporter for the New York Times, sourced many of the conversations and reported on events from "hundreds of participants." Some even drawing illustrations of where all characters sat around a table. He writes "many of the calls conducted by CEO's and government officials, took place on speakerphones, sometimes with a dozen people listening in."

In the end, Sorkin writes, that despite what happened, there is still a lack of humility in the financial services industry. Ego's still rule, along with hefty bonuses. But most disturbing is that there's still no formal process or legal framework in place for handling future events like this in an orderly fashion. That the government, as in this crisis, could once again be forced to make 'policy by deal.'

And still, the remaining banks, like Goldman Sachs, JP Morgan and Bank of America are becoming even too bigger to fail.

After reading a CNBC reporter's book about the same subject matter, I have a much greater appreciation for this one. This is an excellent read and highly recommended if you understand what the book is and isn't about. It is a very compelling page turner about the financial crisis from the view of the principals involved- particularly the events surrounding Lehman's collapse. Mr. Sorkin spends a lot of time with character development, and for that reason the book reads like a novel. The book is very well researched compared to some others about the same subject manner (e.g. the Kashkari plan). If you're looking for a book that delves into the events and personalities behind the financial crisis, then this is for you. Some might say this reads like a chronology, and in some parts that criticism is valid. But in large part it is a gripping account of what happened behind the scenes. However, it is not a book that deals with "root causes", mechanics of Wall Street finance, or even future implications. It is a specific story told with such rich detail that a broader scope would probably not be appropriate.

This book is the authoritative version of the market turmoil that brought the financial system to its knees in the Fall of 2008. It deserves its place in the pantheon of financial classics such as When Genius Failed, Liar's Poker, and Barbarian's at the Gate. The author tells a gripping behind-the-scenes narrative that is highly readable and entertaining. Especially for a New York Times reporter, the author is well balanced and fair in his treatment of the people and events involved. The book is incredibly well researched with an amazing amount of detail that really places the reader in the middle of the action. Despite it's length, the book is a very smooth read as it is well organized and the fast pace keeps the pages turning.

The prevailing view of the news media and seemingly most politicians is that this was just a big bank bailout. In reality the powers that be saved the whole financial system from collapse. Systemic failure would have been a tragedy of proportions never seen before.

This is my sixth book review on a series of books on the financial crisis. The book is Too Big to Fail by Andrew Ross Sorkin. Sorkin is a financial columnist for the New York Times. After reading the book, I am not surprised why the book has become a best seller.

Too Big to Fail gives an extremely comprehensive account of the events that begin with the collapse of Bear Sterns, and end around the time TARP is passed. The author does an excellent job of providing a brief history of many of the characters who played a major role in the events surrounding the collapse of the financial system. This includes well known figures such as Ben Bernanke, Henry Paulson, Tim Geithner, Lloyd Blankenfein, Jamie Dimon, John Mack, Ken Lewis. The author also provides a history of people who were played a major but are less known to the public. This list includes John Varley (CEO Barclays), Walid Chammah (President Morgan Stanley), Steven Black ( Head, Investment Bank JP Morgan.

I normally like to list something new I learned from reading a book, but with Too Big to Fail there are so many new facts I learned I cannot begin to think where to start. As someone who followed closely the events surrounding the collapse of Lehman Brothers and subsequent news coverage since, I thought I read everything. However, I learned so many details from the book that I never picked up in the financial news. Some of these new facts I learned were numerous mergers that Goldman Sachs, Morgan Stanley, Citigroup and Wachovia tried to pursue after the collapse of Lehman Brothers.

There will be people who will be disappointed by this book. Henry Paulson is painted in a very positive light by the author. (We will soon get the story from Henry Paulson's side. Paulson is releasing a book on his perspective of the financial crisis which I will be reviewing in the coming weeks). Even Dick Fuld is portrayed as someone who was trying his best to save his firm. The author also rejects the popular conspiracy theories about Goldman Sachs bringing down other firms or controlling the Government. The only evidence of this, are unsubstantiated rumors by Fuld that David Einhorn, other short sellers, and Goldman Sachs were spreading rumors to bring down Lehman Brothers. This may disappoint people who do not like Henry Paulson, Goldman Sachs or Dick Fuld. The author is most critical towards Sheila Bair, Christopher Cox, Vikram Pandit and Charles Gasparino (CNBC.

However, regardless of what one's opinions are of Goldman Sachs or the former Treasury Secretary and Former CEO of Lehman Brothers, the book is a masterpiece. The author does an excellent job of explaining in detail what really happened in the several weeks in September and October 2008 when it appeared the financial system was on the verge of collapse. One cannot ask for more detail as the author devotes over 200 pages towards this critical time period alone. Sorkin clearly had extensive access to many of the key people in the book. The book is entertaining and could be enjoyed by someone with or without a degree in finance.

Disclosure: New FTC guidelines require me to disclose I have a material connection because I received a free copy of the book to review.

Sorkin did an excellent job recapping the financial crisis. I was thoroughly intrigued by the colorful personalities that were involved, their background and the personal connections between the players. Quite inspiring towards the end with the unveiling of TARP. By revealing the inside story of Secretary Paulson, Sorkin gives credit to the true heroes of September 2008.

Only one negative comment on the book. At times, I was questioning the bias of the author in describing certain players and events throughout the crisis. Not a big problem but with Sorkin's background as a NYTimes editor, I expected better.

As a recent college graduate with little financial market experience, I found Sorkin's explanation of the financial history, tools and credit ratings highly informative and beneficial.

The title of this book suggests that there will be some discussion about the need to determine at what point companies are too big and present too much "systemic risk." Unfortunately this is not discussed at all.

As mentioned by other reviewers, this is a detailed chronicle about "what happened" written by a journalist attempting to be independent and factual. Over the last 150 pages the chronicles became redundant, even trying. For example, the story about Wachovia and the efforts to find an investment banking partner had already been told in the prior 400 pages with different names and companies. The refrain becomes tedious: Why should I help you? Am I as a CEO expected to be my brother's keeper? Do I wake or dream? Was it realisitic for Paulson and Timothy Geithner to ask private company executives to place the interests of the nation over their shareholders? Is the core problem, mentioned only in passing, that we have no formal approach to deal with the failure of an investment bank (as we do with commercial banks and with insurers)? Are we in a better position today than we were in September 2008?

There is no real effort to address the "why" question or whether it will happen again. If you want to see what the book has to say about these issues, I suggest you go to pages 534-539.

It is an intellectual cop-out for Sorkin to call this a "perfect storm." Some astute people (like Yale's Robert Shiller) predicted the crisis and one or two - like Goldman Sachs -even profited by shorting the same deals they were selling. When we Americans want to hold no one accountable and say that there really is nothing that could have been done - and implicitly nothing meaningful to learn - we have become addicted to this "perfect storm" rationale. I find it nauseating.

We need to be better than that.

It is also questionable for Sorkin to end the book by saying that history will be the ultimate judge of whether this crisis could have been avoided and who should be held accountable. Is this tome itself not "history"? To paraphrase the rabbi, if not you, Mr. Sorkin, then who? If not now, Mr Sorkin, then when?

Overall, this book is like a movie that is 30 minutes too long. If the "what happened" is all that matters to you, start with William Cohan's "House of Cards" to get the Bear Stearns picture. It really should have been Chapter One here, but that would have required a two volume approach. Then read the first 300 pages of this book and skim the rest.

Also: A detailed Table of Contents would have been a big help!

This book is entertaining and useful. You learn how their minds work, as both good and bad examples. The typos and grammatical errors were not that distracting. This book is surprisingly cheap at only $13. Andrew Ross Sorkin is impressive to write such a brilliant book at such a young age.

If you really want to know the juicier details and behind the scenes dealings, then this is the book for you. This book avoids some of the heavier specifics of our economic state, but gives an excellent review of the day-to-day workings that occured between various government officials and top bankers. I highly recommend!

With content to devour avidly without putting down too often, Andrew Ross Sorkin's Too Big to Fail reads much like Tolstoy's War and Peace, with as many pages, and as colourful a casting of (real) characters, each engaging with changing friendships and rivalries, across many interconnected social, political and business arenas. This is a truly remarkable achievement for a work of non-fiction, concerned as it is with current politics, banking and international finance. Many readers will already be familiar with the headline stories concerning the fall of the Lehman Brothers in 2008, and its knock-on effect upon America's `Big 5' standing financial institutions, but in this book we find a most excellent reportage using the first-person accounts of the key players (those companies' CEOs, financial advisors, and political regulators), culminating in the `saving' of the 9 largest financial institutions through then President Bush's signing of the TARP legislation (more commonly referred to as the USA Government's `company/bank bailout bill'). Quoting verbatim from telephone/cell-phone dialogues, TXT messages, and fast and furious email traffic as sent between the key players and decision makers at the heart of the situation (an interesting technical and historical observation in itself !), the book's 600 pages delivers to the discerning reader much more than an `insider' factual account of the events occurring during the crucial initial 7 months of the `financial crisis', which began early 2008.

Although not explicit in his analysis (and certainly not guilty of any unnecessary opinion raising), the author's narrative text may be used to reveal many an object lesson for anyone to learn from, but especially so for those embarking upon entrepreneurial business development, whether or not they be operating in the banking or financial sectors. For example, the first 6 chapters (or 20) deal with the Lehman Brothers' demise by way of introduction, with the current reviewer distilling the presence of several (by now familiar) tell-tell signs of unfortunately all too common problematic business developments, including: 1. Capital raising problems - the temptation to engage in creative (if not outright fraudulent) accounting and investor misleadings; withholding critical financial information from directoral boards, or otherwise obfuscating accounting procedures for the purpose of optimising non-approved short-term expenditure decision making; having the wrong people, in the wrong posts, for reasons of management comfort/convenience; lack of awareness of inter-investor communications (professional gossip) and short-seller betting on stock falls. 2. Poor forecast realism - making powerbase predictions based on volume expectations, not real profits (thus exposing oneself to high costs and thin margins); being unprepared for market down-turns (having little/no risk management in place). 3. Business model monitoring flexibility - inability/unwillingness of CEOs to answer questions such as "how big is the book right now ?", "what assumptions underlay the current operational model ?", or "how much do you need right now to fill the capital hole ?" (especially when ignoring extant debts and payments outstanding, whilst attempting to attract investors/buyers).

Additional to the case of the Lehman Brothers, the subsequent chapters next introduce other major players soon to be also involved in the wider developing `debt crisis' (carelessly driven by the 1990s deregulation of US banks, the push to increase home ownership which encouraged lax mortgages, historically low interest rates, and a system of bonus compensation which rewarded short-term risk-taking). It was also interesting (tho' somewhat hard for the current reviewer to believe), that, at the time of their generation, neither the CEOs involved, nor the mogul head of the Federal Reserve (Greenspan) claimed to be capable of understanding the real nature of the CDOs, CDs or other derivative offerings that their companies were selling (and which were largely responsible in contributing to their company's failures !). Indeed, as we learn from the Merrill Lynch story (and subsidiary partners Blackrock and Bloomberg) in Ch.7, and again in the subsequent chapters concerning JP Morgan, AIG, and Goldman Sacks, most of the metrics commonly used by the relevant sales and marketing divisions had little/no grounding in reality - with even the AAA ratings they received often resulting from their de facto government-backing (e.g., Fannie Mae, or Freddie Mac), and NOT otherwise derived from any real holdings/wealth generation achieved (as their CEOs apparently believed to be the case).

This latter observation (i.e., the significance of obtaining a national Government's validation of one's operations), becomes increasingly apparent from Ch. 14 onwards, as we learn about the coming together of the US Treasury and Federal Reserve (USA & NY), in the characters of Paulson, Bernanke and Geithner respectively, in contributing their advice, recommendations, even `orders' to the various CEOs of the ever-shrinking and nervous Big 5 Wall Street financial institutions. Seemingly as farcical as could have been written by Woody Allen at times, the latter half of the book sees the author recounting a single month's back and forth TXT, voice and email communications as they occurred between all the major players (as they really happened), as the various CEOs and their attaches flew about the country, to attend various meetings, and sought so desperately to resolve their respective company's perceived imminent demise. For example, it was quite extraordinary (at least to the current reviewer), that often within a single 24 hr period, a company such as Morgan Stanley was able to `secretly' evaluate the entire assets of as big a company as Lehman Brothers, conduct full due diligence (both of its parent and international subsidiaries), and then make a serious buyout offer proposal for them to consider ! .... and to then retract it as quickly,... ditto CITI, then likewise Goldman, then Barclays (UK).... each brokered one way or another by Paulson (Secretary of the US Treasury, himself a former CEO of Goldman Sachs), with additional US Government department support as and when needed. The details of the story concerning Paulson's involvement in the Bank of America's approach to `bail out', and then buy Merrill is also gripping (if not comical) reading; as is the JP Morgan and Goldman `buy out' negotiations with AIG (later resolved by the Fed once more), and the machinations of the various other rescue purchases of Lehman US ops by Barclays, the Wachovia partnerings with Morgan Stanley (which Paulson then reversed, for reasons of PR, not financial stability !), ... but then instead with Goldman Sacks, with JP Morgan extending credit to Morgan Stanley, ... CITI group eventually buying out Wachovia at $1 per share ?... one has to wonder whether, if not for its seriousness in affecting the lives of many millions of individual investors and mortgage holders across the world, could the Marx Brothers have conceived an any more surreal set of 24-hr emergency meeting event storylines, with their `party of the first part,...' MOUs ?

The final story told before concluding the last chapter, relates Paulson's seemingly bizarre difficulty in encouraging each and all of the `Big 9' strongest financial institutions in the USA to accept the public money to be given them (between $10 billion-$25 billion each), on equal terms, in order to "provide cover to the weaker banks that would follow suit"... with Geithner (President of the NY Fed Reserve) then adding, "We need to make clear that this is not optional". Culminating in the eventual TARP `bailout' initially rejected by the US Congress, but later accepted at its 2nd presentation within the same month, it will be left to the historians to resolve whether it was a wise move to `rescue' the major private sector financial institutions with government money (the TARP will for now likely continue to be debated as representing an acronym for either George W. Bush's `Troubled Asset Relief Program' or his `Total Abdication of Responsibility to the Public'). So much for the free market economy, Adam Smith might ask,... but this is a great story, really well written, and not worth waiting to break a leg or otherwise be in hospital before beginning to read !


Dr. Anthony R. Dickinson.
Academic Research Laboratory, Worldwide Psychometric Solutions.

Entertaining and compelling story of how these events unfolded and the personalities of those involved. Highly recommended to those that enjoy this genre.

I saw Mr. Sorkin on Charlie Rose several nights ago, and for the first time (in a year of kindleing), put the DVR on hold, and ordered the book from bed. I'm now on chapter 14 and can't put it down.

I've always had a great deal of respect for Mr. Sorkin--a regular on Charlie Rose. But this book goes beyond his live interviews and is so beautifully organized, you feel you truly ARE a fly on the wall of all the Wall Street types as they decide how to let their firms bottom out while enriching themselves.

At one point in 2008 it looked like Lehman Brothers, Merrill Lynch, AIG, Morgan Stanley, and Goldman Sachs would all file for bankruptcy. In less than 18 months, Wall Street went from its most profitable age (the financial services sector created over 40% of total 2007 U.S. corporate profits) to the brink of devastation. During this downward ride, Goldman, Sachs (the biggest profit-maker) employees took home more than $661,000 each, and Wall Street firms had debt/capital ratios of 32 to 1 - believing their new 'securitized' mortgages that had been sliced and diced removed the risk. Even Federal Reserve Chairman Bernanke saw little reason for concern over the $2 trillion sub-prime market. Sorkin believes Wall Street became undone by its own smarts - the complexity of these securities meant almost nobody could figure out how to price them in a declining market, and Wall Street found itself unable to function.

In the space of just a few months, Wall Street changed almost beyond recognition. Each of the former Big Five investment banks (Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley) failed, was sold, or converted into a bank holding company. Two mortgage lending giants and the world's largest insurer were placed under government control. And American taxpayers became part owners in some of our proudest financial institutions. (Citibank, then the world's largest, that had spearheaded a push towards deregulation, was not 36% owned by taxpayers. Documenting all this in "Too Big To Fail," Author Sorkin tells us took over 500 hours of interviews with over 200 direct participants in the events surrounding the 2008 banking crisis.

Controversies remain over bonuses, and the linkage of Secretary Paulson to Goldman, Sachs possibly playing favoritism vs. Lehman Brothers. Sorkin, however, believes that the real remaining question is "How should regulators respond to continued risk taking when government provides an implicit (if not explicit) guarantee of these financial businesses?" Risk-taking has increased, per Sorkin - for example, Goldman's value-at-risk (VaR) in the second-quarter of 2009 was $254 million, up from $184 million a year prior. (Worse yet, the remaining financial institutions are now bigger than ever.)

Could the crisis have been avoided? Sorkin poses this as the $1.1 trillion question. ($1.1 trillion = the cost, so far, of the bailout.) Sorkin answers "Perhaps, but it was probably too late by the time Secretary Paulson came into office." Paulson was further hindered by association with an unpopular lame-duck president. Thus, Sorkin leaves it to history to judge Paulson, Bernanke, Geithner, etc.

Some of you folks are truly amazing. This book provides incredible insight into one of the most gut wrenching financial crises this nation has ever endured. And... You're arguing about pricing? And worse, basing your review on that! As someone else wrote, review the content -- that's what a book review is all about. And this one rates five stars for content. To get inside the minds of those who were faced with making decisions affecting the direction of this country's financial systems is truly enlightening and extremely sobering. If you have any interest at all in things financial - read this book. I guarantee you the little hairs on the back of your neck will stand on end.

In Too Big To Fail, Andrew Ross Sorkin has done for the 2008 financial collapse what Barbarians at the Gate did for the buyout of RJR Nabisco. Too Big to Fail is a pleasurable, overstuffed read that puts you in a ringside seat as Hank Paulson, Tim Geithner, Ben Bernanke and a cast of hundreds attempt to save the capital markets from complete melt-down in September and October 2008.

I give Sorkin points for creating a fast-moving and absorbing play-by-play, and for providing his readers with some insights into the Wall Street and Washington personalities who drive the events of the book. I emerged with a more sympathetic view of Hank Paulson than I had going in, and was impressed by the decency of Robert Willumstad of AIG, and the resourcefulness of Jamie Dimon (JP Morgan), John Mack (Morgan Stanley) and Lloyd Blankfein (Goldman Sachs). If nothing else, Sorkin reminds us that these figures were charged with responding to immensely difficult economic events in real time.

At the same time, Too Big to Fail is not especially helpful in analyzing the causes of the financial collapse or evaluating the performance of the policymakers involved. The key mystery-- unanswered in over 500 pages-- is why Lehman Brothers is allowed to fail by Paulson, Geithner, et. al., when AIG is rescued within the next 24 hours. (Paulson's assertions that the British government could not have been cajoled into approving Barclays' acquisition of Lehman ring hollow.) A second question-- still being debated-- is whether the federal takeover of Fannie Mae and Freddie Mac was in fact warranted. (Sorkin uncritically repeats Paulson's assertions that both Fannie and Freddie had balance sheets built of junk.) A third question-- not addressed in Too Big to Fail-- is the role of the White House as the capital markets tanked. If Too Big to Fail is correct, there was little in the way of overarching policy directing the capital markets rescue. Instead, Hank Paulson did his best to strong-arm collapsing financial institutions into shotgun marriages backed, to one degree or another, by federal guarantees. While Paulson's performance may have been all that was possible in a compressed time frame, and while the matchmaking reflects Paulson's considerable talent as a Wall Street dealmaker, the lack of policy direction (and Sorkin's failure to discuss this absence) is troubling.

If you want an absorbing look at the human drama surrounding the September-October 2008 financial collapse, Too Big to Fail is your book. If you're looking for a more analytic view, look elsewhere-- perhaps at Simon Johnson's and James Kwak's excellent 13 Bankers.

Well done, told in a breakneck style that alleviates what would surely be an excess of tedious detail for anyone not involved in the world of finance. NYT reporter Sorkin knows his stuff, though, and his access to all the closed-door conversations between key players such as Hank Paulson, Bernard Bernanke, Lloyd Blankfein, Jamie Dimon, Tim Geithner, and Richard Fuld is impressive and compelling. The frantic days leading up to the bank bailout reads like a literary roller coaster, from the somewhat mysterious prop-up given the Bear Stearns acquisition as opposed to the precipitous freefall of Lehman Brothers, to the takeover of Freddie Mac and Fannie Mae. Much abuse is heaped on CEO's, investment bankers and government finance gurus, but there is some credit to be handed out as well. All were scrambling to make tough decisions under the gun, and while everyone wants to protect his own pocket, there was a genuine desire to prevent global economic disaster for all. Time will tell - and has told a bit already - the final tale of which decisions were right and which were not, and there were both. As a risk mgmt / risk finance person I feel for everyone involved, since it's one of those things about which the alternative outcome will never be known, but then again, that's the nature of risk aversion and loss mitigation as opposed to pure speculative gain. You take the heat for any loss, and there is no credit given for the potentially more severe losses your risk management may have prevented.

Most people seem to simplify this issue by politicizing it, making it a question of capitalism vs socialism - a misguided view that doesn't begin to explore just how complex the matter is. The global economic web is a tangled one indeed, for good and ill.

At times the details spin out a little repetitively, but overall there is a lot of meaty information here, presented by a true insider and fair observer.

Andrew Sorkin is the chief mergers and acquisitions reporter for The New York Times. As he writes, his book is `a chronicle of failure', capitalism's failure. He gives a detailed account of events from 17 March 2008, when JP Morgan took over Bear Stearns, one of Wall Street's big five.

Sandy Weill, the architect of Citigroup, said in 2007, "The whole world is moving to the American model of free enterprise and capital markets." They promised a new world of risk-free investment. Wall Street firms had a debt/capital ratio of 32/1. Also in 2007, the Securities and Exchange Commission dropped its 1938 rule preventing investors continually shorting a falling stock. Lax regulation met greedy bankers.

In 1999 Ben Bernanke (now chairman of the Federal Reserve) had said that the dotcom bubble was not a big concern, unless and until it fed inflation. Similarly, the Fed ignored the growing housing bubble.

Bush's Treasury secretary Henry Paulson, a devout Christian Scientist and huge fundraiser for Bush, asked a possible new recruit to the Treasury, "Are you a Republican?" Sorkin writes, "As luck would have it, he was."

At a Goldman Sachs board meeting in June 2008, held to discuss a possible merger with AIG, nobody noted that AIG had overvalued its securities, even though they knew about it. Best and brightest? They may think so. They are the monsters, not the masters, of the universe.

As the crisis began, the head of one private-equity giant whinged, "Everybody is just pursuing his self-interest." When Wall Street's top nine CEOs met the Treasury team, on 13 October 2008, to agree the bail-out, the first question was, "Why am I in this room, talking about bailing you out?"

The second, and last, question was, "What kind of protections can you give us on changes in compensation policy?" A Treasury man replied, "We are going to be producing some rules so that the administration will not unilaterally change its view." As soon as they heard that their unlimited bonuses were safe, courtesy of the taxpayer, the CEOs signed.

Workers outside held signs saying, `Jail not bail' and `Crook'. The $1.1 trillion bail-out was by Wall Street, for Wall Street. As Jamie Dimon, CEO of JP Morgan, asked, "Why would you try to bail out people whose sole job it is to make money?" Wall Street served and saved only itself, not its clients, not its borrowers, not the economy, not the American people.

Sorkin warns that `vulture investors' are looking forward to the collapse of commercial real estate. There have been no real changes to Wall Street, so "when the next, inevitable bubble bursts, the cycle will only repeat itself."

I bought this book in Heathrow thinking it would be dull enough to put me to sleep on a long transatlantic flight. Wrong! It's fascinating, and reads almost like a novel. He captures the personalities, the mood, the drama of the whole meltdown. I highly recommend it for anyone who is trying to understand just what the heck happened back in 2008.

Too Big To Fail is a big book, which juicy portraits of all the principal characters who wrecked the world economy and those few that tried to prevent it from falling off a cliff (although even a couple years later, we're still perched on the edge). Everyone comes off badly, and no one seems particularly smart, heroic, or tragic; rather, everyone seems like a character from an episode of The Sopranos. The book starts without much prelude; in fact, it launches into the crisis AFTER the Bear Stearns bail-out. The book ends after Treasury forces a capital infusion in the 9 largest banks and broker-dealers, which signaled a calming of the markets but did nothing to deal with all the toxic assets the banks held (a problem later dealt with in a temporary way by Bernanke's "quantitative easing" program, not covered in the book). The much heralded TARP turned out to be an idiotic idea. Sorkin focuses on the banks and broker-dealers, but generally ignores what everyone else (including hedge funds, rating agencies, and the Fed) did during the crisis. The actions of Tim Geitner and the New York Federal Reserve certainly require more scrutiny, but you won't find much in Sorkin's book. Should Lehman have been bailed out? Given that every other financial institution was bailed out, it sure seems so. A few days after Lehman filed bankruptcy, Paulson and Geitner orchestrated the bailout of AIG, an insurance company, the cost of which would later exceed $180 billion.

I'll echo the comments of many of the other mediocre reviews here. This book is an amazingly detailed play-by-play report of the weeks around the bankruptcy of Lehman and the various mergers, bailouts, rescue plans and all the rest. If you want to know what Dick Fuld ate for breakfast the day Lehman filed for bankruptcy, it's probably in here, as are the details of phone call after phone call, various merger meetings, etc.

What's not in here is any detailed analysis of why all these companies ended up where they were. This is especially noticeable when he discusses AIG- you get a few pages talking about how every time someone looks at the books their situation seems worse, but how AIG ended up holding the hot potato (and why it was uniquely able to take on massive risk without affecting its credit rating) is cursory at best and missing at worst. There's virtually no real discussion of Moodys and the other rating agencies and *why* they rated toxic assets as AAA, the real lynchpin of the entire failure.

This also tends to lend a too sympathetic air to the treatment of the companies, the CEOs and the various people in the federal government and reserve banks- Sorkin's book has a tendency to treat them as folks heroically scrambling to find any way to save their poor beleaguered firms. A detailed analysis would show the string of awful decisions by a host of folks who should have seen it coming- this wasn't a natural disaster, it was a planned event, carefully sculpted by people who thought they were far smarter than they actually were.

I couldn't put this book down and although it's a large book, I was really sorry when it was over. I love the action, actual quotes including the foul language, and powerful emotion in the book. If you want a blow by blow of what went down during the financial crisis, quote by quote, bead of perspiration dripping from your forehead, buy it!

How did Andrew Ross Sorkin find the time to write this book and also do his day job at the New York Times? A huge amount of work went into this, and it shows. It's nothing less than the "Barbarians Of The Gate" of these times: an amazingly detailed account of the recent financial crisis that reads like a novel. We get behind-the-scenes views of the fall of Bear Stearns and Lehman Brothers, the often chaotic maneuverings at the Fed and the Treasury that led to TARP, and the proud, arrogant, and flawed Wall Street leaders who presided over the worst economic turmoil since the Great Depression.

This book focuses on the crisis from the perspective of the Wall Street CEOs, Tim Geithner, and Hank Paulson. In contrast, "The Big Short" by Michael Lewis provides a more comprehensive explanation of how and why the subprime mortgage debacle occurred and describes how unsung, unknown investors exploited the resulting opportunity. The two books are perfect complements and are both excellent.

A very well written book covering what happend when Lehman brothers failed and turned the housing bubble into a full blown financial crisis. You won't learn allot of economics here, but you will get a rare inside view of how the top of the financial world works. The book reads like a good crime novel and I found it tremendously exciting and at times also rather shocking. What shocked me the most was learning how ad hoc most of these solutions where, I always thought that the TARP program was created by a big committee of top economics professors, but it turns out it started as a quick 3 page draft, done part time by two employees. In short a great book covering the key persons and events around the crash of Lehman and good place to start if you want to learn more about the current economic mess.

Some day 50 years from now, the American public will have a full understanding of the financial collapse of 2008. It was a very complicated story and it will take that long to fully comprehend what happened when the American housing collapse nearly tipped the world into a global depression.

Philip Graham, the late publisher of the Washington Post coined the phrase, "Journalism is the first draft of history." If that is true (and most journalists agree with Graham's astute observation), then those seeking to fully understand the financial crisis can find the second draft of history of the 2008 crisis in two excellent books: Andrew Ross Sorkin's TOO BIG TO FAIL; and Michael Lewis' THE BIG SHORT.

This reviewer has already written a critique of Lewis' excellent book, and this review will focus on Sorkin's equally excellent book.

The two books are very different. If one wishes to understand exactly what happened, in excruciating financial detail, then Lewis' book serves that purpose. But if one is interested in the drama of the crisis and how the financiers on Wall Street and the politicians in Washington responded to the crisis, then Sorkin's book more than fills the bill.

Sorkin's narrative reads more like a soap opera than a dry summary of the machinations of Wall Street and Washington. While there is some extensive background, the narrative itself covers an eight-month train of events that began in March 2008 when the investment-banking firm Bear Stearns collapsed and was sold to J.P. Morgan in what was essentially a fire sale (the initial sales agreement was for $2 a share).

By October, the U.S. government had bailed out all the major investment institutions on Wall Street to the tune of $220 billion; the feds also bailed out the giant insurance company, AIG, as well as two of the top three American automobile manufacturers. The crisis was to consume $1.1 trillion in investor securities and taxpayer monies.

"In the span of just a few months, the shape of Wall Street and the global financial system change almost beyond recognition," writes Sorkin in summing up the events in his book. "Each of the former Big Five investment banks failed, was sold, or was converted into a bank holding company. Two mortgage-lending giants and the world's largest insurer were placed under government control. An in early October, with a stroke of the pen, the Treasury - and by extension, American taxpayers - became part owners in what were once the nation's proudest financial institutions, a rescue that would have seemed unthinkable only months earlier."

Sorkin's book reads like a thriller. The hero (some say the villain) is Henry Paulson, the former CEO of Goldman Sachs, America's richest, most successful investment bank. In May of 2006, Paulson had moved to Washington as secretary of the treasury in the (nearly) lame duck administration of George W. Bush. Paulson's actions will be debated for decades as the experts try to figure out what happened. Some say he saved the American financial system; others claim he bailed out his buddies on Wall Street. The truth is that he did both.

What is most disturbing in Sorkin's fascinating account is the fact that all the major players - Paulson, Fed Chairman Ben Bernanke and Tim Geithner, president of the Federal Reserve Bank of New York - were feeling their way along through the process. They often times reversed their original decisions as they struggled to come up with solutions to the crisis. It is frightening to consider that, quite frankly, they simply did not know what they were doing. Bernanke, who had studied the Great Depression in-depth, was the most qualified to deal with the issue, but even he was feeling his way along through the crisis.

Certainly, the actions of the feds were highly unorthodox, perhaps even illegal by conventional governmental standards - and even existing law. But all the major players did what they thought necessary to get the country, and the world, through the crisis.

On Wall Street the star players in Sorkin's book are Jamie Dimon, CEO of J.P. Morgan Chase and private investor Warren Buffet. The chief villain was Richard Fulk, Jr., CEO of the failed investment bank, Lehman Brothers.

Sorkin's reporting on the crisis for the New York Times gave him the credentials and sources to fill in all the details of the crisis. But, as even he admits, his book will not be the definitive account of the crisis.

The "new federal activism," as Sorkin calls it, raises profound questions about the future of the American financial system.

"As this book was going to press," Sorkin writes in his Epilogue, "a raucous public outcry, complete with warnings about creeping socialism, questioned the government's role not just in Wall Street, but in Detroit...and in the health care system....One unexpected result of this new federal activism was that traditional political beliefs had been turned on their head...there were lingering questions about how well Washington had acquitted itself."

The author finally concludes:

"What happened during this period will be studied for years to come, perhaps even by a new generation of bankers and regulators facing similar challenges."



The reviewer spent seven years on Wall Street as Vice President, Market Content, for the Knight Ridder newspaper group while it was developing electronic financial information systems.

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.

It may seem like boring subject at first, but it was so well written. The reporting was painstakingly accurate, it really gives a very good insight into what went on during the crisis from different vantage points. The author stays out of the fray and does not try to lay the blame on any one player, but rather report what happened when, who met with whom, who talked to whom at what time. I would recommend it to anybody who is interested in knowing why the government decided to bail out those companies. The bailouts may or may not have been the right thing to do in hindsight. This book puts you in the shoes of the protagonists of the economic crisis of that time.

Too Big to Fail is a page turner. I think rarely do you get a book in finance where you are really keen to find out what happens next, but this book fits that category. I typically spend more time reading and thinking about structural elements of what happened prior to and during the crisis but this book goes to the heart of the actions and attitudes of the people involved directly. Im glad i took the time to read it. The various negotiating strategies, brinkmanship and strategy or lack thereof are described in detail with colorful language.

Too big to fail recounts the events from bear's collapse to the recapitalization through equity injections of the major US financial institutions. It describes in what feels like real time, the politics, both on the corporate side as well as the government side of what was happening during the crisis. I cant tell how much of the conversations were embellished but the dialogue definately feels like it could be close to what was really being said. You get a sense of the way various CEO's evolved during the crisis in attitude, how they became overwhelmed or remained clear headed. You get a sense of the desire of some to try to work together and try to help to the best of their ability given their constraints and the desire of others to try to vulture invest and seek personal gain.

One gets a lot out of this book. It doesnt focus on the structural failings of the market, but you get a great sense of the way that the heads of banks dealt with it and reacted to one another. You get a real glimpse at the most testing time for these individuals and how they succeeded or failed. I enjoyed it from the beginning to the end. Im really curious as to how the author managed to get the recounts as they seem very plausible. In anycase, highly worth reading, if only to get a play by play of the financial crisis at the CEO level of the major banks.