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7 of 7 people found the following review helpful
4.0 out of 5 stars Reads like a personal outpouring by the author!
In interesting book, covering very technical subject matter. Partnoy goes to some lengths to explain the instruments he was trading, but one gets the impression he is really trying to convey how complex they are more than impart understanding.
Much of the book is delivered in the style of a bemused rant by the author, clearly shocked and frustrated by the conduct he...
Published on 12 Jan 2002 by Benedict Carey

versus
46 of 57 people found the following review helpful
2.0 out of 5 stars Partnoy's complaint
This is an entertaining dirt disher, but has no other merit. If you think that life in a Wall Street firm is really like this - these days, at any rate - think again. If you want a really salacious muck raker, only well written - try Michael Lewis' Liars' Poker, on which format this book was surely based. FIASCO is a thoroughly inferior product.
Not only is it poorly...
Published on 21 Jan 2004 by Olly Buxton


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7 of 7 people found the following review helpful
4.0 out of 5 stars Reads like a personal outpouring by the author!, 12 Jan 2002
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This review is from: F.I.A.S.C.O. (Paperback)
In interesting book, covering very technical subject matter. Partnoy goes to some lengths to explain the instruments he was trading, but one gets the impression he is really trying to convey how complex they are more than impart understanding.
Much of the book is delivered in the style of a bemused rant by the author, clearly shocked and frustrated by the conduct he saw around him and by the ease with which he abandoned principles and joined in.
Partnoy has become a hate figure within his industry which [...] suggests his home-truths are not well received by some.
I can't help wondering if, at one point in the book, he is describing the planting of seeds which may have helped precipitate the collapse of the Argentinian banking system a few days ago ...
Read it and see what you think.
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10 of 11 people found the following review helpful
4.0 out of 5 stars Hilarious. Great reality check on market efficiency., 13 May 2002
By A Customer
This review is from: F.I.A.S.C.O. (Paperback)
At first sight, this book looks like a 1990's redux of Liar's Poker and - compared to that - dwells a bit too hard just on the author's feelings and not enough on the many interesting figures of Morgan Stanley. A better job could have been done there. Where this book is unbeatable is in providing plenty of real-life examples of biased, arrogant and overconfident behaviors both inside and outside Morgan Stanley. If anybody still believed in market efficiency and investors' rationality, this book is for sure a great reality check. Also laudable is the Author's effort to explain very complex derivative products in reasonable English.
You will fully enjoy this reading especially if you have worked in a trading room before.
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1 of 1 people found the following review helpful
5.0 out of 5 stars The chickens have now come home to roost, 29 Nov 2008
By 
William Cohen (London) - See all my reviews
(VINE VOICE)   
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This review is from: F.I.A.S.C.O. (Paperback)
I worked in the City for nearly two years in the late 90s. It was a horrid experience. I found that area around Liverpool Street soulless, the firm I worked for was home to grossly distorted views of what was worthwhile human activity and stupidity was everywhere. But they made huge amounts of money - so that made it all okay.

Rather like the character in Matteo Garrone's Mafia film Gomorrah, who sees his boss dump a basket of peaches given to him by an old lady, I realised that there was nothing to be done about it. If you don't like it, leave.

George Soros said, and Partnoy quotes him, that derivatives will "destroy society". I remember walking around Broadgate and Bishopsgate imagining how the glass palaces might one day be reduced to rubble, and the district turned into a ghost town. Isn't that what happens when you destroy society?

Partnoy explains how derivatives trading is an audacious way to make huge amounts of money. They use the kind of techniques you learn in McDonald's to sell extras. They see the value of catchy names for there products. They conceal the negative elements when creating brochures and doing the sales pitch. It's comically simple. Their goal: 'to rip the customer's face off'.

I read one reviewer who said Partnoy didn't respect the rule of 'omerta', and Howard Davies, Chairman of the Financial Services Authority, calls it on the cover a 'nasty book' (I can't find his original review).

Is it an English foible to love institutions and wish to cover up their disgusting habits, and just enjoy their cosy benefits? Are banks, like sausage factories, the less we really know the better?

I'm not sure how accurate or dated Partnoy's account is, but you get the gist. He gives a strong hint why Japan has endured ten years of recession. And as the world economy unravels, this book helps you imagine what the banks have been up to, and why the consequences are catastrophic.

Warren Buffet and Charlie Munger emphasise that ethics and morality have an important place in business. And they seem to be doing okay in this crisis.

Partnoy says the really bad losses, we don't even hear about. I'm glad people like Partnoy have the courage to blow the whistle on revered institutions.
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6 of 7 people found the following review helpful
5.0 out of 5 stars Wall Street bilks Main Street, 2 Aug 2009
By 
Luc REYNAERT (Beernem, Belgium) - See all my reviews
(TOP 1000 REVIEWER)    (REAL NAME)   
In this cynical book (`traders ripping their client's face off') Frank Partnoy exposes the sharp practices of the herd of Wall Street brokers.
With such outlandish names as PERLS (Principal Exchange Rate Linked Security), PLUS (Peso-Linked U.S. Dollar Secured Notes), BIDS (Brazilian Indexed Dollar Securities), `quantoed constant maturity swap yield curve flattening trade' or `leveraged-indexed-inverse-floating-dual currency structured notes', brokers disguised the underlying risks of `emerging market" currencies or of wild interest rate swings for their `dumb' clients who bought their `miraculous' high coupon products.
By paying rating agencies top dollar fees, they even got triple A ratings for their high risk derivative products.

Other policies were, `sell your mother for a basis point' or if the customers were in trouble (called `distressed buyers') `try to convince them to `double-down' on their losses', in order to generate new juicy fees for the company.
At some point, one trader had a risk of 2 million UD$ per basis point change in the interest rate.

What were the results of these `strategies': monumental commissions for the brokerage houses, tremendous bonuses for the traders and billions of billions of losses for the customers (e.g., when National Banks didn't or couldn't continue to `manage' their local currencies).

What was the reaction of the US government in the face of those blatant rip-offs: less (!), not more regulation of the derivative markets. The political campaign contributions did their work.
One saw the ultimate result of these totally free market policies and their SIVs (Structured Investment Vehicles) a few years after the publishing of this book, when all banks all over the place nearly collapsed and when the `capital markets' system had to be saved by the public's tax money.

This astonishing book is a must read for all `investors' and for all those who want to understand the financial world we live in.

N.B. The Orange County story is better explained in P. Jorion's `Big Bets gone bad' and the story of Nick Leeson in his book `Rogue Trader'.
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2 of 2 people found the following review helpful
5.0 out of 5 stars WITH EYES WIDE OPEN OR CLOSED?, 21 Aug 2010
By 
DOPPLEGANGER (TEDDY B) - See all my reviews
(TOP 500 REVIEWER)   
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Frank Partnoy, nowadays a much respected academic, Director of The University of San Diego's Center for Corporate & Securities Law, writes of his days working in the Derivatives Product Group (DPG) at Morgan Stanley.

Michael Lewis, author of Liars Poker and The Big Short says that one should think of derivatives trading as a bloodsport, with the unsuspecting consumer as prey. Professor Partnoy's chronicled experiences at Morgan Stanley certainly confirm the 'hunter' and 'prey' relationship that existed and was the systemic mindset of all those involved in DPG. The 'victim' may well have been a Municipality, and similar investing billions of dollars of public money (our money) Insurance and Pension Funds, Healthcare Trusts and Investment Companies (again our money) as well as Hedge Funds and 'out-and-out' Speculators.

Few of the buyers of the various 'exotic' derivative concoctions that were cobbled together by DPG, were capable of understanding and evaluating these complex financial 'time-bombs'. The Author also suggests that many of the Senior Management at Morgan Stanley together with the Rating Agencies that were paid to financially rate the products, did not understand them either.

Also it is not certain whether many readers of F.I.A.S.C.O will fully grasp the full workings and risks involved, although the Author tries really hard to keep the readers up to speed with the complexities of each product, but that does not detract from being able to enjoy the read. Enjoy is, perhaps the wrong word in this context because this account is extremely alarming and shatters the illusory 'comfort blanket' that many have about placing their trust in the old established leading financial institutions such as Morgan Stanley. Whether the Morgan Stanley founders in 1935, Henry Morgan and Harold Stanley, would have approved of the seeming lack of concern for their customers financial well-being, cannot of course be known. However, one might imagine that their bodies would be 'spinning' in their graves at a speed in excess of that achieved by the 'Hadron Collider High-Energy Particle Accelerator'.

This fascinating insight into the inner workings of one of our leading financial titans is disturbing, but nevertheless, compulsive reading and a must to all those interested in the causes of the recent global financial mayhem.
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2 of 2 people found the following review helpful
5.0 out of 5 stars Essential reading. Highly recommended., 3 May 2010
By 
Philip Mayo - See all my reviews
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This book is about "derivatives", which are the financial products which recently brought the entire world economy to the brink of collapse. What is especially fascinating about the book is that it was written in 1997, over ten years ago. In other words, the crisis that we are now suffering WAS FORESEEABLE. The author, Frank Partnoy, foresaw it, and warned the policymakers and regulators.

His first warnings to the world lie in the pages of this superb recounting of his experiences during the early 1990's as an investment banker at Morgan Stanley. There he learned about "derivatives" and how they were ruthlessly used to create vast wealth for the Bank, often at the expense of its clients. In 1995, having decided that he could no longer stomach the duplicity involved in derivative sales, he retired from banking and worked as a corporate lawyer. Following the publication of this book in 1997 he became a strong proponent for the control and regulation of derivate trading both through articles for various publications and through speeches before various bodies. He also appeared, as an expert witness on the dangers of unregulated derivate trading, before the United States Senate and The House of Representatives. Needless to say, nobody in authority followed any of his advice.

For those of us who have little or no understanding of what "derivatives" actually are, this book explains the basics in a very readable and understandable way - so don't be put off by an feeling that all this is going to be too complex to understand. The reader will come away from the book with a real knowledge of the basics of derivatives and how they were (and still are) misused in incredibly cynical ways, driven by the greed of Investment Bankers. The chapter on California's Orange County bankruptcy and the chapter on the MX derivative trade with a Japanese client (from which Morgan Stanley made over 76 million dollars) are simply breathtaking. How can such things happen? - How can they be allowed to happen??? It is truly unbelievable. Those of us who thought we were living in a world controlled by our politicians on our behalf must think again.

There is an epilogue of 25 pages (written in 2009 and added to this edition of the book) which reflects on the current financial disaster we are experiencing and how unregulated derivative trading created it. It makes particularly interesting reading in light of the warnings highlighted in the 1997 edition. Frank Partnoy can't resist finishing this supplement with that well known phrase - "I told you so". And he did tell us so.

The world's most successful and respected investor, Warren Buffet, and his second-in-command, Charlie Munger, put this book on their recommended-reading list. Charlie Munger is quoted as saying that "FIASCO will turn your stomach". And indeed it will. But it is absolutely essential reading. Highly recommended.
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1 of 1 people found the following review helpful
4.0 out of 5 stars technical but accurate, 28 Jun 2001
This review is from: F.I.A.S.C.O. (Paperback)
The only other book I have read in this genre is Michael Lewis' Liar's Poker - so I would imagine this book would have to be prettygood to match up to it. In fact it did not but was still worth the read. It is less glamourous than LP but more realistic - the intricacies of the deals that are discussed weigh the book down to a a large extent especially in the latter half of the book but the character descriptions are a real delight. For those interested in careers in finance this is a must - shows the good (£$£) and oh so much of the bad. If you're looking for an easy read this is probably not for you.
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46 of 57 people found the following review helpful
2.0 out of 5 stars Partnoy's complaint, 21 Jan 2004
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This review is from: F.I.A.S.C.O. (Paperback)
This is an entertaining dirt disher, but has no other merit. If you think that life in a Wall Street firm is really like this - these days, at any rate - think again. If you want a really salacious muck raker, only well written - try Michael Lewis' Liars' Poker, on which format this book was surely based. FIASCO is a thoroughly inferior product.
Not only is it poorly written, it suffers from the fact that its author seems to have had very little understanding of what he was doing whilst at Morgan Stanley - this is apparent from simply reading his own explanations of the transactions. Mind you, this is no more than you'd expect from a junior associate who'd been on the derivatives desk for a very short period of time - derivatives trading is a difficult business (if it wasn't, people wouldn't get paid so much to do it) and it takes years to fully understand what is going on, let alone get any good at it. And that's something this author never allowed himself the time to do. If he had (and was any good), my guess is he'd still be doing the job, rather than writing the kiss and tell expose.
Partnoy gives himself away when he sensationally reveals the existence of a secret, off-balance sheet, non-disclosed Cayman SPV, identified only by a PO Box number in Grand Cayman and otherwise totally disassociated from Morgan Stanley. But far from being any real subterfuge, this sounds for all the world like a common or garden repackaging vehicle - of the sort used (quite legitimately and openly) by many investment banks for delivering funded derivative and asset-backed products to their clients. Had he taken the trouble to Google on the words "repackaging" and "Cayman" he would quickly get a sense for how common (and uncontroversial) these sorts of vehicles are.
Partnoy has since become a professor of law at San Diego University, which says as much about the rigours of academic regulation as his book does about derivatives regulation.
Still this silly book sells - but maybe the writing's on the wall: right now, some clunker ex-Enron employee is probably writing the successor in line to FIASCO, only about Enron. With any luck, though, at least this time it'll be written with some style.
Actually, post script to that: Such a book about Enron (et al) has now been written, by one Professor F. Partnoy, esq. It's called Infectious Greed, and the easily shocked will be glad to know the author's prurient sensationalism has not abated in the last few years.
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1 of 1 people found the following review helpful
4.0 out of 5 stars Liar's Poker of the 1990's, 2 July 2000
By A Customer
This review is from: F.I.A.S.C.O. (Paperback)
A good attempt to describe the hottest way firms make big money in the 1990's. The first few chapters are brilliant. Afterwards, the contents become increasingly technical for readers as understandably derivatives are complex financial products. A good read overall.
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3 of 4 people found the following review helpful
5.0 out of 5 stars Removes the veneer of respectability from investment banking, 11 Jan 2000
By A Customer
This review is from: F.I.A.S.C.O. (Paperback)
FIASCO provides an insight into what really goes on beyond the the impressive lobbies of major investment banks. The way he tells it, as you leave the lobby and enter the dealing rooms, you enter a world of egos out of control, studied eccentricity, red clawed capitalism and outright greed. Mr Partnoy's book is full of the real character of an investment bank, where profit is the only motivation and how it is obtained often transgresses what non-investment bankers call the law. Mr Partnoy tells the extraordinary tale of of Morgan Stanley Dean Witter's derivatives team, taking the reader through what derivatives are, how they are designed, how they are used and - most importantly - how they are abused. If you are interested in these curious financial products, the people that create and sell them and the companies that found themslves on the wrong side of them, FIASCO will provide a valuable insight. If you need convincing of the power of this book, it is worth mentioning that Morgan Stanley tried to ban its publication. Apparently it was so true, it scared them.
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