Synopses & Reviews
From award-winning Financial Times
journalist Gillian Tett, who enraged Wall Street leaders with her newsbreaking warnings of a crisis more than a year ahead of the curve, Fool's Gold
tells the astonishing unknown story at the heart of the 2008 meltdown.
Drawing on exclusive access to J.P. Morgan CEO Jamie Dimon and a tightly bonded team of bankers known on Wall Street as the Morgan Mafia, as well as in-depth interviews with dozens of other key players, including Treasury Secretary Timothy Geithner, Tett brings to life in gripping detail how the Morgan team's bold ideas for a whole new kind of financial alchemy helped to ignite a revolution in banking, and how that revolution escalated wildly out of control.
The deeply reported and lively narrative takes readers behind the scenes, to the inner sanctums of elite finance and to the secretive reaches of what came to be known as the shadow banking world. The story begins with the intense Morgan brainstorming session in 1994 beside a pool in Boca Raton, where the team cooked up a dazzling new idea for the exotic financial product known as credit derivatives. That idea would rip around the banking world, catapult Morgan to the top of the turbocharged derivatives trade, and fuel an extraordinary banking boom that seemed to have unleashed banks from ages-old constraints of risk.
But when the Morgan team's derivatives dream collided with the housing boom, and was perverted — through hubris, delusion, and sheer greed — by titans of banking that included Citigroup, UBS, Deutsche Bank, and the thundering herd at Merrill Lynch — even as J.P. Morgan itself stayed well away from the risky concoctions others were peddling — catastrophe followed. Tett's access to Dimon and the J.P. Morgan leaders who so skillfully steered their bank away from the wild excesses of others sheds invaluable light not only on the untold story of how they engineered their bank's escape from carnage but also on how possible it was for the larger banking world, regulators, and rating agencies to have spotted, and heeded, the terrible risks of a meltdown.
A tale of blistering brilliance and willfully blind ambition, Fool's Gold is both a rare journey deep inside the arcane and wildly competitive world of high finance and a vital contribution to understanding how the worst economic crisis since the Great Depression was perpetrated.
"At once a gripping narrative, an education in derivatives, and a most lucid origin-story for the current financial meltdown, it's no surprise the author of this volume is an award-winning Financial Times journalist. Taking readers back to the invention of credit-derivative obligations (CDOs) at J. P. Morgan in 1994, and the subsequent exponential growth of that market, Tett (Saving the Sun) deploys a remarkable sense of pacing, generating real suspense over rapidly inflating debt on bank balance sheets; by the time Lehman Brothers fails, the book has become a bonafide page-turner. Tett explains how credit derivatives seemed a win-win for the financial world, freeing up capital, increasing profits, and diversifying risk, but makes the missteps equally clear as the industry hurtles toward a largely-unforeseen wave of loan defaults (the worst since the Great Depression). Interestingly, J.P. Morgan was one of a handful of banks sufficiently prescient to imagine this 'perfect storm' of simultaneous defaults, and so never became over-reliant on CDOs. Ignoring the tacked-on, preachy epilogue (in which Tett advocates her specialty, social anthropology, as a way to avert future such crises), Tett's explosive, illuminating narrative is the one to read for anyone confused by the present financial mess." Publishers Weekly (Starred Review) (Copyright Reed Business Information, Inc.)
The fascinating, unknown story at the heart of the current financial crisis by the award-winning journalist who warned of the crash well in advance.
The Financial Times writer who scooped the whole financial world with her warnings of an economic crash takes readers to the elite inner sanctums of the banking world to reveal the untold story at the heart of the boom and bust.
From award-winning Financial Times journalist Gillian Tett, who enraged Wall Street leaders with her newsbreaking warnings of a credit crisis more than a year ahead of the curve, Fool's Gold tells the astonishing unknown story at the heart of the 2008 meltdown.
About the Author
Gillian Tett oversees global coverage of the financial markets for the Financial Times, the world's leading newspaper covering the financial markets. In 2007 she was awarded the Wincott prize, the premier British award for financial journalism, for her capital markets coverage. She was also shortlisted for the British business journalist of the year award. She previously served as the newspaper's acting head of the Lex column (an agenda-setting column on business and financial topics), the Tokyo bureau chief, economic correspondent, and foreign correspondent". "She also sits on an advisory panel on financial regulation at the London School of Economics, is an associate fellow of finance at Westminster University, and an advisor to the main accountancy body in the UK. She speaks regularly at conferences around the world on finance and global markets, most recently holding audiences at the San Francisco Federal Reserve, the European Parliament, and the London School of Economics. She has a PhD in Social Anthropology from Cambridge University.