New Books Review

Book Review: Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy: Barry Ritholtz, Bill Fleckenstein, Aaron Task: BooksThe Backstory to Bailout Nation,

By Barry Ritholtz (NY) -

Amazon Review

Long story short: After Bill Fleckenstein’s GREENSPAN’S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE McGraw Hill asked him to do a follow up to that book. He (wisely) said no.

However, Bill suggested they contact me.

Which the publisher did. I turned them down (several times). Who had time to write a book? Besides, I did not want to do a fast rush-to-judgment type of thing. But they were tenacious in their pursuit, and I eventually succumbed to their flattery — but on my terms, including having final edit on the manuscript. (This becomes important later on, as you will soon see).

Because of the way events played out, I ended up writing three separate Bailout Nation books over the next 15 months. The first version was a history of bailouts. This overview covered an arc from Lockheed (1971) to Bear Stearns (March 2008). Around the time this book was due (~Labor Day 2008), something was in the air . . . you could smell the leading edge of the approaching storm. I convinced the publisher to hold off a few weeks.

Boom! Fannie Mae blew up. Then Freddie Mac, Lehman Brothers, AIG, Citigroup, Bank of America. Soon Merrill was on the ropes, followed by Morgan Stanley, Goldman Sachs, GM and GE. All hell was breaking loose. Well, I thought, at least I had an ending. The expanded version of the manuscript, with greater emphasis on the latter part of 2008, was finished in December ‘08.

Or so I thought.

After I handed the book into the publisher (McGraw Hill), they let me know they had problems with my assessment of the Ratings Agencies. They were unhappy with my calling them “Pimps & Hos”, or describing their business model of rating junk bonds as AAA for big fees as “Payola.” (What would you call it?)

Not coincidentally, McGraw Hill owns of the largest Rating Agencies, Standard & Poor’s.

The compromise was to remove the reference to Pimps, but using publicly available data and congressional testimony, to add more detailed analysis and quotations from experts. When it was finished, I found the revised section to be much more even handed — and far more devastating — to S&P. They (along with fellow rating agencies Moody’s and Fitch’s) were key enablers to the entire crisis. There were many other guilty parties, but I simply could not under-emphasize the ratings agencies.

When McGH rejected it again, I exercised my right to buy the manuscript back from them in January 2009. Numerous publishers were interested, but I went with Wiley — they have a great deal of experience publishing business/investing related books, and as a publisher, had no conflicts of interest that would interfere with telling the full story.

The third version was the charm.

By this time, the amount of bailout money going to mismanaged companies, reckless speculators, and incompetent corporate executives had skyrocketed to 14 trillion dollars. This was infuriating to anyone paying attention.

Astonishing things happened as the book progresses. The more I researched and wrote, the more it was apparent we were witnessing the greatest heist ever made. By the last section of the book, history’s biggest transfer of wealth — from the taxpayer to the Banksters — was taking place. Trillions were being shifted from the responsible to the reckless, from the prudent to the incompetent. It was infuriating — and you will see as the book progresses my initial academic tone gets replaced with greater snark and anger.

I not only had my ending, I had a new cause — exposing those who caused this mess, be they Democrat or Republican, Corporate CEO or derivatives trader. I hope the end result is something that will inform and illuminate, while entertaining you along the way . . .

Could you have timed this book any better?,

By Jeffrey Zoldan -

  

“Bailout Nation” is not only timely but an excellent reference source as to how we got to where we are today in our messed up economy. It’s a great read and author Ritholtz is good with a turn of phrase as well as his broad overview of his subject matter.

Must Read-,

By Peter Greene (NYC, NY United States) -

  

Bailout Nation is a great read, easy to follow logic that actually discusses the underlining problems that brought us to this financial mess. Barry Ritholtz does a fantastic job of finding the origins to the collapse of so many financial giants. He also discusses how these and past bailouts may lead to more financial problems in the future.

I would recommend this book for everyone interested in finding out how giants like Bear Stearns, Lehman Brothers and the auto makers are all connected and may lead to more problems because of corporate welfare.

You do not have to be in the financial industry to enjoy this book.
Search Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy: Barry Ritholtz, Bill Fleckenstein, Aaron Task: Books from AmAzon

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