Meet the Geniuses Who Lost Our Money
By Robert Kaiser
WashPost
Sunday, August 9, 2009
Book Review: FOOL'S GOLD: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe
By Gillian Tett
Free Press. 293 pp. $26
Ever wonder, looking at your 401(k) account statement, what exactly happened last fall, when the financial system nearly collapsed and trillions of dollars of "wealth" evaporated? Gillian Tett's splendid book might be the explanatory tonic you've been looking for.
There are other good books that help untangle the disaster of 2008, notably Mark Zandi's "Financial Shock" and Charles R. Morris's "The Two Trillion Dollar Meltdown" -- both are accessible works by experts who wrote for a general audience, but neither is as engaging as Tett's. A writer for London's Financial Times, she brings an unusual credential to financial journalism: a PhD in social anthropology. Anthropologists, as Tett notes at the end of her book, look for holistic descriptions of human cultures that "link different parts of a social structure." She has done just that in "Fool's Gold," which illuminates a basic truth: Apart from natural disasters, the great events that alter human history are, however complicated, the work of human beings. In the end, economic forces, the tides of history and such are just manifestations of human foibles, often encouraged by dysfunctional cultures such as the one on Wall Street.
Tett's mouthful of a subtitle implies that she found the tribe responsible for this crisis. She does make a convincing case that a small group of J.P. Morgan investment bankers, employees of the firm's swaps department, were among the smartest and most creative proponents of the new financial tool called derivatives, defined prophetically in 2003 by the investor Warren Buffett as "financial weapons of mass destruction."
(Continued here.)
WashPost
Sunday, August 9, 2009
Book Review: FOOL'S GOLD: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe
By Gillian Tett
Free Press. 293 pp. $26
Ever wonder, looking at your 401(k) account statement, what exactly happened last fall, when the financial system nearly collapsed and trillions of dollars of "wealth" evaporated? Gillian Tett's splendid book might be the explanatory tonic you've been looking for.
There are other good books that help untangle the disaster of 2008, notably Mark Zandi's "Financial Shock" and Charles R. Morris's "The Two Trillion Dollar Meltdown" -- both are accessible works by experts who wrote for a general audience, but neither is as engaging as Tett's. A writer for London's Financial Times, she brings an unusual credential to financial journalism: a PhD in social anthropology. Anthropologists, as Tett notes at the end of her book, look for holistic descriptions of human cultures that "link different parts of a social structure." She has done just that in "Fool's Gold," which illuminates a basic truth: Apart from natural disasters, the great events that alter human history are, however complicated, the work of human beings. In the end, economic forces, the tides of history and such are just manifestations of human foibles, often encouraged by dysfunctional cultures such as the one on Wall Street.
Tett's mouthful of a subtitle implies that she found the tribe responsible for this crisis. She does make a convincing case that a small group of J.P. Morgan investment bankers, employees of the firm's swaps department, were among the smartest and most creative proponents of the new financial tool called derivatives, defined prophetically in 2003 by the investor Warren Buffett as "financial weapons of mass destruction."
(Continued here.)
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