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Fatal Risk: A Cautionary Tale of AIG's Corporate Suicide by [Boyd, Roddy]
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Fatal Risk: A Cautionary Tale of AIG's Corporate Suicide Kindle Edition

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Length: 367 pages Word Wise: Enabled Enhanced Typesetting: Enabled
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Review

Fatal Risk: A Cautionary Tale of AIG′s Corporate Suicide by Roddy Boyd has been longlisted for The FT & Goldman Sachs Business Book Of The Year Award 2011

Members of the seven strong judging panel will decide on a shortlist of up to six finalists in the middle of September.

If there is a theme that links most of the 14 titles on the longlist..it is their authors quest to work out how and why companies, governments and their leaders fail and how not to go wrong in the future

"A vivid portrait of the giant insurer at the center of the 2008 financial crisis."
(The Wall Street Journal)

"The best book of the crisis is Fatal Risk. This is a fabulous book – but it deals with complex subjects without shying away from their complexity and it assumes you have enough knowledge and intelligence to cope. . . This is the best book yet written about any specific episode of the crisis. Buy multiple copies. Give them to your friends. They will be grateful too."
(Bronte Capital)

"A sober work that appears to have been researched extremely thoroughly. . . more convincing on the mechanics of AIG′s Suicide than it is on any of the deeper motivations."
(The Financial Times)

"Through superb reporting, Boyd has written one of the financial crisis genre′s most important works."
(Bloomberg BusinessWeek)

"As Roddy Boyd demonstrates in his well–written study of AIG′s fall, it was the very solidity of the company′s credit rating that led it astray. Painstakingly built over the course of 40 years by an army veteran, Hank Greenberg, AIG was the ideal counterparty for Wall Street. . . For some, the demise of AIG was not the suicide described in the book′s title, but an act of murder by Goldman. Mr Boyd argues that the investment bank was acting only as any prudent counterparty would. But the author′s analysis is unlikely to dent the conviction of conspiracy theorists that AIG was rescued by Hank Paulson, the former Goldman chief executive turned treasury secretary, to prop up Goldman." (The Economist)

"Engaging and balanced account . . . Many books on the financial meltdown that began in 2007 treat AIG as a plot point in a wider drama. Yet valuable lessons can be gleaned from the narrower account that Boyd lays out here –– lessons about the responsibilities of leaders and regulators as well as the hazards of financial engineering. . . The story of AIG′s demise has many moving pieces, large and small, which Boyd meshes into a smooth narrative. . . Boyd is good with dialogue and knows how to keep the story going. His reporting is thorough and fair, even when it comes to Timothy F. Geithner′s risible assertions that it wasn′t the Federal Reserve′s job to pop bubbles."
(Bloomberg)

The best book on the financial crisis, and . . . favorite piece of non–fiction work since Michael Lewis′ The Big Short. . . The reporting here is incredible."
(Distressed Debt Investing)

"A 10 best finance book.
Does the ongoing financial turmoil leave you scratching your head? Worry not, here′s our pick of the finest – and most readable – books about Big Money..."
(The Independent)

′Fatal Risk is must reading for market insiders, investors, business leaders, and anyone who′s wondered what really happened in 2008.  (Hereisthecity.com, April 2011).

′researched extremely thoroughly (Financial Times, April 2011).

a vivid portrait of the giant ­insurer at the center of the 2008 financial crisis. (Wall Street Journal Europe, April 2011).

A cautionary tale of corporate hubris. (Ethical Corporation Magazine, May 2011).

Boyd is good with dialogue and knows how to keep the story going .  (Bloomberg.com, June 2011).

From the Inside Flap

"As author of Fatal Risk . . . I would have found my job much easier if Goldman truly were the real culprit in this saga."
[from "AIG and Goldman Sachs: The Deceptive Blame Game," appearing on TheFinancialInvestigator.com, July 2010]

There certainly has been no dearth of reporting on the causes of the 2008 financial meltdown. Thousands of gallons of ink have been spilled decrying the gross incompetence, if not downright criminality, of mortgage lenders, the wildly excessive risk–taking of Wall Street banks, the cravenness and collusion of the ratings agencies, and the willful ignorance of regulators. Yet absent from the orgy of righteous finger–pointing has been any substantive coverage of AIG, the looming giant in the eye of the tempest the one company about which it can truly be said that, if it had been allowed to collapse, it would have dragged the entire world financial system down with it.

Fatal Risk is the riveting inside account of how Maurice "Hank" Greenberg, the storied combat veteran and driven entrepreneur, took a motley collection of insurance companies and built them into the world′s most innovative and daring financial conglomerate. Made rich and powerful through Greenberg′s iron will and vision, AIG was unprepared for his dramatic ouster in 2005. As the company recovered from a bruising regulatory battle, its management did not understand what risks were being taken onto its once mighty balance sheet in the name of a quick buck. As the CDO and real estate markets imploded, AIG′s role as the indispensable giant at the corner of Main Street and Wall Street nearly brought down the world financial system.

Perhaps most controversially, investigative reporter Roddy Boyd argues that, contrary to conventional wisdom, Goldman Sachs, and the billions in collateral calls it made on AIG′s Financial Products unit, was not the sole cause of the company′s downfall. Drawing upon a host of sources from Hank Greenberg to senior Goldman executives; current and former AIG leaders and board members; to legendary short–seller Jim Chanos and Federal Reserve officials Boyd makes a compelling case that AIG′s collapse was an inside job. It took several generations of tireless work and measured risk–taking to build AIG into a AAA–rated juggernaut, but it took only a few years of profit and bonus chasing from a handful of previously unknown executives to bring the world′s most important company to its knees.

A cautionary tale of corporate hubris and the enthralling, never–before–told story of how an insurance company became a central player in the global financial meltdown, Fatal Risk is must reading for market insiders, investors, business leaders, and anyone who′s wondered what really happened in 2008.


Product details

  • Format: Kindle Edition
  • File Size: 967 KB
  • Print Length: 367 pages
  • Publisher: Wiley; 1 edition (3 Mar. 2011)
  • Sold by: Amazon Media EU S.à r.l.
  • Language: English
  • ASIN: B004NSVH70
  • Text-to-Speech: Enabled
  • X-Ray:
  • Word Wise: Enabled
  • Screen Reader: Supported
  • Enhanced Typesetting: Enabled
  • Average Customer Review: 3.4 out of 5 stars 5 customer reviews
  • Amazon Bestsellers Rank: #540,500 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer reviews

3.4 out of 5 stars
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Format: Kindle Edition
If you followed the 2007-2009 subprime crisis you may think that you know most of the story of AIG's collapse. However, as is frequently the case, there is a lot more to the story than the simplified media narrative. "Fatal Risk" is a well-researched and highly readable account of the whole story behind the AIG disaster. The author Roddy Boyd clearly had excellent sources and there is a great deal of information here that you will not find anywhere else. The subprime mortgage affair was such a huge, global crisis (as Roddy Boyd puts it in this book, it was as though "the entire Western world was one big, highly leveraged real estate trade") that books covering the crisis as a whole (such as Michael Lewis's excellent "The Big Short") simply do not have the space for the detailed account of AIG that is "Fatal Risk".

Of course, any book about AIG has to tell the story of the remarkable Maurice "Hank" Greenberg, who was CEO of AIG from 1968 through 2005. Starting with a "far-flung and not terribly profitable" business, Greenberg built AIG into the largest and most respected insurance company in the world. We learn the story of how Greenberg served in World War 2 (landing on Omaha Beach on D-Day and participating in the liberation of the Dachau concentration camp) and in the Korean War, and how three days after his discharge he talked his way into an entry-level insurance job in New York, rose quickly through the ranks, and ended up at AIG a few years later. The book also tells the story of how the capital markets subsidiary AIG Financial Products (AIG-FP) was established in 1987, as a joint venture with the "absurdly intelligent" Howard Sosin, formerly of Drexel.
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Format: Hardcover
Paul Bradshaw has done a thoroughgoing summary of this book and I do not intend to repeat it. I agree with him, however, that the style is slapdash as well as displaying that annoying US characteristic of omitting prepositions and definite articles, making some sentences hard to understand.

Although he has a reasonable grasp of finance, author Boyd struggles with the business of insurance - I would defy anyone who did not already know of it to understand the General Re transaction (for which poor old Ronald Ferguson went to jail) from Boyd's description. This may seem a bit pedantic but I imagine that many readers will, like myself, have an insurance background. To many of us the defenestration of Hank Greenberg was akin to regicide,making this book essential reading; I think that we deserved a bit better on the technical front.

Boyd also expresses surprise at the extent of likely damage to the world economy had AIG been allowed to go under. This really serves to underline the extent to which he, and many others, underestimates the significance of insurance and fails to appreciate how it touches everything.

The book will add to the knowledge of anyone wishing to understand more about the sub-prime lending debacle. Spritzer may have been a bad lot, by the way, but he was right about under-the-counter commissions paid to insurance brokers, which I understand they are now trying to reintroduce at Lloyd's.

John Murray
Guildford
Surrey
UK
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By DOPPLEGANGER TOP 1000 REVIEWER on 8 July 2013
Format: Hardcover Verified Purchase
`Fatal Risk' purports to tell the complete story of AIG's climactic role in the 2008 financial crisis, the events leading up to it, and the subsequent consequences. The author Roddy Boyd is a seasoned investigative financial markets reporter and was able to obtain information available to few if any others, including the personal notes and records of the key players.
In addition to AIG, the book looks closely into the behind the scenes roles played by the `hard to like let alone respect' Goldman Sachs, and the New York Fed, which illuminates how the company was run, and what happened that caused a highly successful global financial colossus to rapidly spiral into almost terminal decline at the same time nearly bringing about an unravelling of the world financial system.

The causes highlighted are many but the author makes it quite clear that the overriding and most critical reason was the forced departure from AIG, in 2005 of the long standing CEO Mr Hank Greenberg, as a direct result of subsequently shown unwarranted vindictive actions by the overly ambitious New York State Attorney General, Eliot Spitzer, who was later disgraced over prostitution allegations, and the AIG Board of Directors, who lacked the resolve and foresight to resist Spitzer's attack on Mr Greenberg.

Mr Greenberg was the principal proponent since 1962 of AIG's phenomenal growth record into one of the world's largest financial concerns, and was a master at identifying what constituted `risk', as well as keeping a tight control on just about every important direction, and running of the diverse activities that was the AIG Group. Very little, if anything, passed Hank Greenberg by, particularly when it concerned the evaluation of `risk'.
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Format: Hardcover Verified Purchase
AIG's collapse is a great subject, this book is certainly readable, interesting and moves at a good pace. However, the author's descriptions of key events (particularly when they require a proper understanding of key finance products) is very unclear in parts. One is left with the impression that this is not due to a lack of writing skills, but rather that the author does not fully understand some of the key financial products that brought down AIG and therefore some of the key why questions about its downfall. This is a real shame and something the editors really should have worked on.
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