Synopses & Reviews
Americans are losing their homes at a rate not seen since the Great Depression. Prices continue to fall sharply despite the reassurances of just a few years ago that all was rosy on the housing front. Many factors have been blamed for this crisis, but who is really responsible? And perhaps more importantly, why was everyone so taken by surprise?
In Chain of Blame, acclaimed financial reporters Paul Muolo and Mathew Padilla go behind the headlines to tell the inside story of why Wall Street's established investment banks bear much of the blame for the events that have cost millions of Americans their homes. They show in detail how, from 2000 to 2007, executives from Merrill Lynch, Bear Stearns, Lehman Brothers, and others financed non-bank mortgage lenders that eagerly sold their mortgages to consumers through loan brokers. Wall Street then sold bonds backed by subprime mortgages to overseas investors in Europe and Asiawhich led to financial difficulties there as well.
The authors build their compelling story around the key players in this tragedy, first and foremost being Angelo Mozilo, founder and CEO of Countrywide Financial, America's largest home mortgage lender. From Mozilo's July 2007 conference call with a group of top Wall Street equities analystswhich marks the true beginning of this fiascoto his congressional rebuke in 2008, Chain of Blame chronicles the crisis in detail, showingreaders what happened, who is responsible, and what lies ahead.
As the dust settles around these life-shattering events, the blame game has begun. But as Muolo and Padilla show with stunning clarity, there is really no single entity or individual to point the finger at. It was a mix of factors and participantsthe world's largest investment banks, homeowners, lenders, credit rating agencies and underwriters, and investorsthat precipitated the current subprime mess.
Chain of Blame ultimately reveals how human behavior and greed drove the demand, supply, and the investor appetite for these types of loansand how Wall Street was all too willing to satisfy the desires of those who should have known better.
"Chain of Blame
is one of the first books to delve deeply into the central role that big banks played in the mess…for a juicy, name-dropping read, Muolo and Padilla’s book is hard to beat."--BusinessWeek
"Muolo and Padilla examine just who was to blame for the crisis and find that it is not just cowboy operators." (CEO Middle East, September 2008)
“…a level-headed book…the anecdotal style is easy-going...much the best book on the mortgage industry”. Fund Strategy 1 September 2008
“…a ripping piece of reporting… The authors know their stuff.”Bloomberg News Monday 28 July 2008
“The Blame Business unsettles the reader with a number of very disconcerting questions and comes up with some even more disturbing answers. Ours has become a society that thirsts for blame, breathes blame, and is blinded by blame. It is little wonder that it has turned blame into a flourishing business. But at what cost? This is a book that makes us look at blame with fresh eyes.”
“Readers will come to understand blame more profoundly, gaining deeper and richer insights about what it means to individuals to blame and to be blamed.”
“Blaming the other makes us feel good. It absolves us from responsibility. ‘How much are we really in control?’ asks Fineman in this erudite and thoughtful book. To prevent Salem-type witch hunts and their modern equivalents, we need institutions and culture to hardwire just ways of apologising, learning, and restoring. A big task, beautifully outlined here.”
In the summer of 2007, the subprime empire that Wall Street had built all came crashing down. On average, fifty lenders a month were going bust-and the people responsible for the crisis included not just unregulated loan brokers andcon artists, but also investment bankers and home loan institutions traditionally perceived as completely trustworthy.
Chain of Blame chronicles this incredible disaster, with a specific focus on the players who participated in such a fundamentally flawed fiasco. Authors Paul Muolo and Mathew Padilla, well-regarded journalists for National Mortgage News and the Orange County Register respectively, reveal the truth behind how this crisis occurred, what individuals and institutions-from lenders and brokers to some of the biggest investment banks in the world-were doing during this critical time, and who is ultimately responsible for what happened.
An updated and revised look at the truth behind America's housing and mortgage bubbles
In the summer of 2007, the subprime empire that Wall Street had built all came crashing down. On average, fifty lenders a month were going bust-and the people responsible for the crisis included not just unregulated loan brokers and con artists, but also investment bankers and home loan institutions traditionally perceived as completely trustworthy.
Chain of Blame chronicles this incredible disaster, with a specific focus on the players who participated in such a fundamentally flawed fiasco. In it, authors Paul Muolo and Mathew Padilla reveal the truth behind how this crisis occurred, including what individuals and institutions were doing during this critical time, and who is ultimately responsible for what happened.
- Discusses the latest revelations in the housing and mortgage crisis, including the SEC's charging of Angelo Mozilo
- Two well-regarded financial journalists familiar with the events that have taken place chronicle the crisis in detail, showing what happened as well as what lies ahead
- Discusses how the world's largest investment banks, homeowners, lenders, credit rating agencies, underwriters, and investors all became entangled in the subprime mess
Intriguing and informative, Chain of Blame is a compelling story of greed and avarice, one in which many are responsible, but few are willing to admit their mistakes.
Praise for Chain of Blame
An Updated and Expanded Look at the Truth Behind America's Housing and Mortgage Bubbles
"A ripping piece of reporting."—Bloomberg
"A juicy, name-dropping read."—BusinessWeek
"Two of the smartest, most entertaining investigative reporters alive describe one of the most important financial stories of our time. If you had any skin at all in the housing boom, you've got to read the story of exactly how that boom went bust."—David Asman, Host, America's Nightly Scoreboard
"Paul Muolo and Mathew Padilla display their deep knowledge of the mortgage industry and all its players. Chain of Blame is a comprehensive examination of a crisis that affects us all."
—Scott Cohn, Correspondent, CNBC
In the summer of 2007, the subprime empire that Wall Street had built all came crashing down. On average, fifty lenders a month were going bust—and the people responsible for the crisis included not just unregulated loan brokers and con artists, but also investment bankers and home loan institutions traditionally perceived as completely trustworthy.
Chain of Blame chronicles this incredible disaster, with a specific focus on the players who participated in such a flawed fiasco. The authors reveal the truth behind how this crisis occurred, what individuals and institutions were doing during this critical time, and who is ultimately responsible.
Blame infuses society in myriad ways. At its worst it sours and destabilizes relationships—divides lovers, co-workers, communities, and nations. It seeds rancor and the wish for revenge. In the hands of skilled propagandists blame is a potent tool for persecution; in the hands of the media it is a vehicle for creating victims and social unease. Yet blame, appropriately placed and managed, safeguards moral order and legal culpability. Blame is thus a curious construction, destructive on the one hand, necessary on the other.
In The Blame Business, Steve Fineman takes us on a fascinating journey through the landscape of blame, focusing on its roots and enduring manifestations, from ancient witch-hunts to todays scapegoating and stigmatization; from righteous anger to blame cultures. With a critical eye he examines the vexed issue of public accountability as politicians and corporate leaders play their “blame games.”
This book raises the challenging question of how we might mitigate the corrosive effects of blame. What are the limits of remorse and forgiveness? What role is there for state apologies for historical wrongdoings? Is restorative justice the answer? This absorbing book deepens our understanding of blame and how it shapes all of our lives.
Whenever anything goes wrong our first instinct is often to find someone to blame. Blame infuses our society in myriad ways, seeding rancor and revenge, dividing lovers, coworkers, communities, and nations. Yet blame, appropriately placed and managed, safeguards moral order and legal culpability. In this book, Stephen Fineman explores this duality inherent in blame, taking us on a fascinating journey across blame’s sometimes bitter—sometimes just—landscape.
Fineman focuses on blame’s roots and enduring manifestations, from the witch hunts of the past to today’s more buttoned-up scapegoating and stigmatization; from an individual’s righteous anger to entire cultures shaped by its power. Addressing our era of increasing unease about governance in public and private enterprises, he delves behind the scenes of organizations infected with blame, profiling the people who keep its plates spinning. With a critical eye, he examines the vexing issue of public accountability and the political circus that so often characterizes our politicians and corporations lost in their “blame games.”
Ultimately, Fineman raises the challenging question of how we might mitigate blame’s corrosive effects, asking crucial and timely questions about the limits of remorse and forgiveness, the role of state apologies for historical wrongdoings, whether restorative justice can work, and many other topics. An absorbing look at something we all know intimately, this book deepens our understanding of blame and how it shapes our lives.
About the Author
is Executive Editor of National Mortgage News
—which won a Polk Award in 1990 for its reporting on the S&L crisis. His freelance work has appeared in the New York Times
, the Washington Post
, and Barron's
. Muolo has been a guest on numerous media outlets, including CNN, CNBC, ABC, and Fox Business Network.
Mathew Padilla is a business journalist whose work on the implosion of the Southern California subprime industry was recognized by the Society of American Business Editors and Writers.
Table of Contents
Introduction: Financial Ashes.
Cast of Characters.
Chapter 1 Angelo Speaks, the Worldwide Contagion Begins.
Chapter 2 The Repo Man Meets the Bald Granny: A Short History of Subprime.
Chapter 3 The Death of the Bailey Building and Loan, the Rise of Millionaire Loan Brokers and Countrywide.
Chapter 4 The Beach Boys of B&C: How Roland Arnall Became the Johnny Appleseed of Subprime.
Chapter 5 Angelo Rising: The Son of a Bronx Butcher Makes Good.
Chapter 6 The Holy Roller of REITs.
Chapter 7 The End of the (New) Century.
Chapter 8 A Conspiracy by Merrill?
Chapter 9 A Warning from Lewie: CDOs, SIVs, and Other Things No One Understands.
Chapter 10 Deep in the Belly of the Bear.
Chapter 11 Armageddon Times: The Tan Man Departs, Bye-Bye Bear.
Chapter 12 What the Hell Happened? Ten Bad Years for Housing in America.
Chapter 13 TARP, the Great Recession, and the Return of Stan Kurland.
Afterword TBTF: A Mortgage Cartel Rises from the Ashes.
Source and Interview Notes.
About the Authors.