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A New York Times reporter brings the drama alive with unusual inside access and compelling detail
Too Big to Fail:The Inside Story of How Wall Street and WashingtonFought to Save the Financial System—and ThemselvesBy Andrew Ross SorkinViking; 600 pp.; $32.95
There's no paucity of books about the financial crisis. Journalists, academics, economists, and pundits seem to have chronicled every event surrounding the drama on Wall Street. Some bite off just a piece, as did Wall Street Journal reporter Kate Kelly in Street Fighters, which looks at the last three days of failed investment bank Bear Stearns. Others, such as journalist Duff McDonald's biography of JPMorgan Chase (JPM) CEO Jamie Dimon, Last Man Standing, consider a single player's role. And a raft of works chronicle the roots of the meltdown, including the forthcoming How Markets Fail by New Yorker writer John Cassidy.
But Too Big To Fail by New York Times (NYT) columnist Andrew Ross Sorkin is among the first to tackle the broad crisis, starting with the days after JPMorgan agreed to buy Bear and ending shortly after the government decided to inject tens of billions of dollars into the country's largest banks in October 2008. The book is exhaustive—if somewhat exhausting in its length—and details the fascinating interplay between Wall Street and Washington in the eight critical months that brought the financial system to the brink of collapse.
Sorkin's reporting chops show. He interviewed more than 200 people, spending some 500 hours with top government officials, Wall Street luminaries, and others privy to critical moments. He also gained access to personal e-mails and confidential documents. Among these is the resignation letter Lehman Brothers CEO Richard S. Fuld sent to the chairman of the Federal Reserve of New York, relinquishing his position on the regulator's board in the days before the investment bank filed for bankruptcy.
As a result, readers feel as though they're in the midst of the action. Sorkin recreates intimate conversations and high-level discussions. For example, the author describes a Saturday morning meeting in July 2008 at the Rye (N.Y.) mansion of Morgan Stanley (MS) chief John Mack, during which Lehman's Fuld drops hints about the possibility of a marriage between the two firms. After Fuld departs, a bewildered Mack asks: "Was he offering to merge with us?" Obviously no deal was ever consummated, and Lehman went under just two months later.
The author seems to enjoy unusual access to sources. For instance, Too Big to Fail contains little-known accounts of how legendary investor Warren Buffett dispensed homespun wisdom to top Wall Street chieftains during critical moments. We read that talks between the Oracle of Omaha and Fuld over a potential investment in Lehman fizzled out in March 2008. Months later, we learn, Buffett sent a four-page letter to then-Treasury Secretary Henry "Hank" Paulson, outlining how the U.S. could buy up banks' toxic assets and make that effective.
Despite its 600 pages, Sorkin's work is highly readable and easily understood. Amid the detailed account of events, he weaves in quirky personal details and amusing anecdotes about the main characters and supporting players. These don't necessarily add a lot of insight, but they do keep the story lively—and make the work appealing to an audience wider than just Wall Street buffs.
In one instance, a longtime colleague of Paulson describes him as having no social skills. The point is later illustrated in a summer staff meeting at the Treasury Secretary's $4.3 million Washington (D.C.) home. When Paulson's wife interrupts the gathering to offer refreshments, Paulson shoos her away, saying "they don't want anything to drink." When she returns with water anyway, nobody takes any for fear of crossing their boss.
These strengths, however, may also be the book's weaknesses. Events are still fresh in the minds of those who have closely followed the financial crisis since 2008—and readers may feel little need for such an in-depth look right now. Some passages may even seem familiar. Sorkin relies heavily on magazines, blogs, and newspapers, including his own reporting for The New York Times. The "notes and sources" section runs to nearly 40 pages. There's also plenty of overlap with other accounts of the crisis: Several stories about Lehman, for example, also show up in A Colossal Failure of Common Sense by Lawrence G. McDonald, a former vice-president at the investment bank, and Patrick Robinson, co-author of the recent best-seller Lone Survivor.
Still, Too Big to Fail may have more staying power than other works. It could easily end up as required reading in college history or business courses—once the smoke has cleared a few years from now.
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TV Broadcaster vs. Print Reporter
An item on media gossip blog Gawker.com describes a spat between CNBC's Charles Gasparino and Too Big to Fail author Andrew Ross Sorkin. In his book, Sorkin writes that Goldman CEO Lloyd Blankfein was "so disgusted with…Gasparino's 'rumor-mongering'" that he switched off his office TV in protest. Gasparino, whose own book on the financial meltdown is due out Nov. 3, claims Sorkin misquoted Blankfein.
To read the item, go to http://bx.businessweek.com/goldman-sachs/reference