Fool's Gold: How Unrestrained Greed Corrupted a Dream, Shattered Global Markets and Unleashed a Catastrophe Paperback – 6 May 2010
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** 'A truly gripping narrative . . . The fact that Tett is able to reproduce such raw private communications is a tribute to her journalistic abilities (Dominic Lawson, SUNDAY TIMES)
** 'Her blow-by-blow story is an impressive piece of detective work. She pulls back the curtain on a closed, unaccountable world of finance (Will Hutton, GUARDIAN)
** 'An absorbing 15-year gallop across the Wild West of the world's financial markets . . . Tett sketches a system in the grip of a great error, emanating outwards from a cadre of elite traders who were able to repel any attempt to monitor, question or restrain them (Stephen Foley, INDEPENDENT)
** 'A very readable, well-informed account of the way investment bankers invented, promoted and profited from the . . . financial products that were at the heart of the financial collapse (Vince Cable, Daily Telegraph)
`Her blow-by-blow story is an impressive piece of detective work. She pulls back the curtain on a closed, unaccountable world of finance' --This text refers to an out of print or unavailable edition of this title.See all Product Description
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Top Customer Reviews
Overall - this is a very informative and interesting read which has clearly been in the planning for some time. A well considered book.
There are a few mistakes: the internet bubble of 1999 was equity driven, not debt fueled. She uses acronyms too often, and there are no anecdotes explaining why the subprime default rates were so high. Indeed, she is very light on what happened in the subprime sector. The corruption there could have really livened up her book, and illuminated the causes of the crash. I learnt more about the crisis from the introduction to Niall Ferguson's Financial History of the World.
The elite and its ideology
As G. Tett rightly states, `in most societies, elites try to maintain their power not simply by garnering wealth, but by dominating the mainstream ideologies.' The ideology of the financial elite is `free markets'. Their gospel pretends `that market prices are always right' and that `markets can correct excess far better than any government.' This gospel was translated in deregulation (repeal of Glass-Steagall), in poor bank and mortgage regulations and also, importantly, in accountancy rules, like `mark-to-market.'
The magic formula: leverage
Monstrous leverage means `potential' monstrous returns (unfortunately, also negative ones) and potential monstrous bonuses for the top management.
But, how to create monstrous leverage in banks where the capital/asset ratio is limited? First, by creating new products like derivatives - CDSs (credit default swaps) and CDOs (collateral debt obligations) based on all sorts of credits and mortgages; secondly, by putting these products in off-shore and off-balance vehicles, like SIVs (Structured Investment Vehicles); thirdly, by financing long term loans with short term debt.
The Fed chairman was against the regulation of derivatives because he believed that they made markets more efficient. A maestro stroke.
All over the world, banks could not get enough of CDOs and their fat profit margins. But, the number of households that could afford prime mortgages was limited.Read more ›
Most Recent Customer Reviews
Packed with detai showing the build up and collapse of financial "derivatives" comprised of sub prime home loanswhich financial shysters had sold on as star rated... Read morePublished 3 months ago by Clare Dover
Gillian Tett was very shrewd in focusing her account of the financial meltdown of 2007-09 on J. P. Morgan. Read morePublished 5 months ago by Stanley Crowe
Really well researched for a journalist, shows excellent access to sector contacts and expertise. A little technical at times but quite readable and understandable. Read morePublished 7 months ago by Tooring
Just finished it. A very good read and probably the best explanation read so far.Published 8 months ago by Keith
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