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General Search General GeneralFool's Gold: How Unrestrained Greed Corrupted a Dream, Shattered Global Markets and Unleashed a Catastrophe
Little, Brown Search Little, Brown by Gillian Tett Search Gillian Tett
Customer Reviews:
Fool's Gold
I found this book very informative providing a comprehensive and factual view of the causes of the financial system failure.
The book was very well written and easy to follow.
A must read
If you have more intelligence than to just think one factor (i.e. derivatives) was responsible for the state we're in then this book is definitely for you.
It shows that what started out as a real, positive innovation was eventually distorted beyond recognition by an investor base that demanded higher returns and lower risk in the face of both low interest rates (2001 to 2005) and a stock market reeling from the effects of 9/11 and the dot-com bust.
She should have called it: The story of the J.P. Morgan CDO desk 
The book's content is less ambitious that its titles suggests. It is about how a team of derivative experts at J.P. Morgan contributed to the development of the securities, including credit default swaps and options, which led to the financial crisis. That's reasonably interesting, but it's a fairly narrow perspective on what happened. The collapse of Lehman is covered in a few pages. She doesn't even mention that the major banks were manipulating Libor. At points it sounds like she is writing to protect her sources. There is a lot about what a great CEO Jamie Dimon is at JP Morgan chase. She says the JPM team shouldn't be blamed for other banks misusing the derivatives they created. I've never heard anyone blame them for it.
There are a few mistakes: the internet bubble of 1999 was equity driven, not debt fueled. She uses acronyms too often, and there are no anecdotes explaining why the subprime default rates were so high. Indeed, she is very light on what happened in the subprime sector. The corruption there could have really livened up her book, and illuminated the causes of the crash. I learnt more about the crisis from the introduction to Niall Ferguson's Financial History of the World.
Fool's Gold 
I was slightly disappointed by the lack of analysis of the importance of the song in charting the Stone Roses journey away from the more gothy/punky sound of their early years to the blues/rock feel of Second Coming. Nor did the passages on Cairn Capital bear much resemblance to the company I worked at for nearly four years.
Fool's Gold 
This was a surprisingly good read considering I've never been one to pick up the Financial Times and it was all about investment bankers and the crazy innovations they used to stoke the credit boom and then cause the recent crash.
I wanted to understand how it could have all gone so wrong, and by the end of the book I felt I had a really good idea. The author is a knowledgeable insider, with good access to key players, but has an unusual background. This gives her a slightly off-beat perspective, which I liked.
The book suffers a bit from too many acronyms / insider jargon, but as long as you keep your wits about you it is easy to work out what's going on.
At the end though, the book pulls its punches, never really putting a finger on underlying causes. To this non-expert reader the greed, stupidity and hubris stand out a mile. Gillian Tett rather lets these bankers off the hook.
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related blog:
new yorker must read this week explaining the financial catastrophe
... following up on for its excellent comments afterward, and comments on comments, especially the weakness of tett's reasoning and experience in places: http://www.amazon.co.uk/fools-gold-unrestrained-corrupted-catastrophe/dp/1408701642.
http://natgagu.blogspot.com/2009/05/new-yorker-must-read-this-week.html
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