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on 4 January 2011
I read this book from cover to cover in three days, when I was supposed to be working. I feel that it was time well spent!

After a gripping prologue, the book begins slowly enough, setting out all the players and riders. And if you just happen to not be an investment banker, you may need to keep a page open on Wikipedia, to remind yourself now and then just exactly how does a Credit Default Swap work and what is the difference between a Collateralised Debt Obligation and a synthetic CDO. But trust me, nearly every non-investment banker I have spoken to, did not know what a CDO and a CDS was until 2007. Then we all got to learn this stuff in a hurry!

The further you get into this book, the better it gets. The pace picks up and gets faster and faster, until, right at the end, we get to disaster after disaster, as deluded CEOs desperately try to wriggle this way and that, in a glorious 'dance macabre' as the dominoes fall.

This truly gripping yarn of delusion, foolishness, incompetence, hysteria, fraud and utter, unbridled avarice explains how we went from well-intentioned moves to provide safe investments and finance for affordable housing, to a world in which one company discovered that 30% of its loans were grossly inflated and going to dilapidated houses that nobody was moving into and nobody wanted. This exciting book tells us how mortgage companies and banks bundled debts into these CDOs, typically each CDO being worth about a billion Dollars and sold them off in bundles. We learn how the strange mathematics and the even stranger logic of taking a huge pile of very bad debt and, by lumping it together in these giant CDOs, the rating agencies could be paid to rate this stuff as triple-A! CDOs that were supposed to be just 10% sub-prime mortgages, the rest being safe mixed debt, from commercial to credit cards, turned out to be 85% sub-prime junk papers.

If there has to be a criticism of this book, it has to be that no mention is made of the madness that was happening in the rest of the World. France, Germany, Spain, Italy, Australia and of course the UK all had their own versions of this credit bubble. In the UK, houses were sold at up to thirty times annual earnings and based on the lunacy of self-assessment and in some areas, valuations increased by 400% in ten years. The Germans have stricter mortgage laws, so they had to import the madness from the US. In the UK, huge banks folded or (e.g. Lloyds and RBS) had to be taken into government ownership. Perhaps that could be a new chapter in a second edition?

But this is the pure American story of how giants, such as Ameriquest, Countrywide, AIG and Fannies Mac and Mae were brought to their knees by their own greed, whilst smaller fry, Bear Sterns, Merrill Lynch, Lehman Brothers and many, many small mortgage brokers, fell in a giant game of dominoes.

This is the story of the day the banks fell for their own Ponzi scheme!

Just buy this book. If you can't buy it, borrow it - but you can't have mine, as there's already a line waiting to read it!
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on 23 December 2012
I thoroughly enjoyed reading this and whilst I have not unlike some reviewers read this non stop, I could not waited to get back to it. I have even bored a friend at dinner about it. And she is an archaeologist.

This is a story of the people behind the subprime mortgage crash, and it builds up by discussing how some of the players got involved in the market and manipulated it and profited by it or lost everything. Few of those involved were innocent, whether by being complicit in producing products that they knew would be dangerous or "toxic" as one package was called, or because they were too greedy to investigate what they were buying. From the regulators, the rating agencies, the GSE (government sponsored enterprises), to the banks, mortgage companies even to the borrowers, everyone let greed hurtle them towards disaster.

Some have commented on how difficult it is to read. Yes this is not a quick read but it is fascinating. I have an accounting background but not in banking or treasury and sometimes I could not remember the detail behind a CDO or a Credit Default Swap but the narrative swept me along regardless. Here is tale of greed encouraging men and women to exploit a system were regulation either could not keep up or was not there at all, as new products were created and/or political machinations stopped the few regulators who tried from controlling the monster.

There are also complaints that this is solely concentrated on the US. Perhaps the title as it refers to the men who bankrupted the world is misleading. I for one would have liked mention of the other collapses But I also see it as a strength that the area focused on just the US. If there was too wide a focus then some of the pace of the book might have been lost. And after all this was a book written by Americans for Americans.
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Format: Paperback|Vine Customer Review of Free Product( What's this? )
I was particularly interested to read this as Bethany McLean wrote "The Smartest People in the Room" about the Enron debacle. Unfortunately one thing led to another and it lay in the bookcase for a couple of years before I got around to it.

Suffice to say that the passage of time has done little to change my view of the core of the book. Primarily focusing on a US-centric view of the financial meltdown, "All the Devils Are Here" does however cast its net to not only cover how the house of cards collapsed around the world, but provides a fascinating history for what various governments and regulatory bodies did wrong over the previous three decades to let it happen.

What's revealed is an infuriating perfect storm of financial de-regulation, government incompetence (if not outright corruption) and a pack of hyaenas in the financial services industry that were effectively left to their own devices with no nobler goal than the lining of their own pockets at the expense of the public purse and their own customers.

I don't normally approve of spoilers in reviews but SPOILER ALERT: the bad guys mostly got away with and if anything has happened in the three years since the book was published it's that they are now back at it, business as normal, just waiting for the public gaze to falter so they can rinse and repeat it all over again. And with the collusion of a bought media and governments of all stripes who rely on third party funding, it won't be long now. Give it another ten years and we'll be due our next financial meltdown.
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on 14 January 2011
I've read a few books about the origins of the current financial crisis and this is undoubtedly one of the best. Not unlike a rollercoaster creeping slowly uphill the writers build the account meticulously until the reader reaches the peak and hurtles down into the chaos of the banking collapse. I'll be honest I had to read one or two passages more than once to grasp some of the financial detail but that is not meant as a criticism of the book; probably says more about me.

Some of the details and accounts are eye-watering, some actually amusing. I can highly recommend this book as explanation of the absolute financial cataclysm that has befallen us all. If you enjoy reading this book and I am sure you will you might want to also consider `Too Big to Fail'; it's another first class read.

I can also recommend Bethany MacLean's book `The Smartest Guys in The Room'; the story of the downfall of Enron. It's a superb read.
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Format: Paperback|Vine Customer Review of Free Product( What's this? )
Bethany McLean and Joe Nocera have written an entertaining and rigorous examination of the causes of the global financial meltdown. 'All the Devils' in the book's title add up to more than 100 named individuals but in addition tens of thousands of property agents, speculators, salesmen, regulators and other players who collectively contributed to the subprime mortgage scam which almost bankrupted the world, are described but go un-named.

McLean and Nocera chart the origin of sub-prime mortgage selling back in the 1980s and how the gradual rise (`like creeping slime, which slowly took over the industry') of borderline criminal practices became endemic and to dominate the activities of many huge financial corporations, all afraid to be left behind and miss the free-cash boat. The origins of the `securitisation' process whereby mortgages aggressively sold to people almost certain to default were wrapped up in `derivatives', `credit default swaps', `collateralised debt obligations' and other such esoteric inventions is described with forensic detail: the traditional bond between borrower and lender, and due diligence before granting a loan, were discarded in the scramble for quick profits and commissions. The higher default risk was bundled up and sold on to other institutions around the world which became so far removed from the origin of the product they had little idea of the risks they were taking on. As long as the huge commissions and bonuses continued to be paid to all the players in the game, no-one cared about the eventual consequences and few dared point out the Emperor in reality had no clothes on.

The authors run through the bios of many big players, like Angelo Mozilo of Countrywide and Roland Arnall of Ameriquest, to enable the reader to see them as real 3-D people who got caught up in the game and played their part in engineering the crisis. Regulators failed to keep up with the growing esoteric complexities of new bundled financial products; Congress was aggressively lobbied so that less and less capital was required by financial institutions to back-up loans. Regulators were led to believe that the properties against which loans were taken out could always be re-possessed and sold, and prices would keep on rising, but nothing was done to protect against common practices of over-valuation and high fees paid to sellers before any of the loan principle was repaid. People were scammed and ripped-off on a grand scale, all on the noble principle of `extending home-ownership.' Fannie and Freddie, Government sponsored enterprises, joined in the game because they didn't want to be left behind and their CEOs justifiably believed that, if it all went wrong, the Federal Government would always bail them out.

The ratings agencies, like Moodys, played their part: browbeaten into giving triple-A ratings to bad-risk `structured financial products' and played off against their competitors ("If you don't grant us a triple-A, we'll pay Standard & Poor's to do the job instead") they proved next to useless in the real world, only downgrading a product or organization (like Enron, for instance) days or hours before collapse when everyone else could see what was about to happen and it could no longer be concealed.

The book is quite long at 364 close-printed pages, plus index. It contains a lot of detail but never gets bogged down; in fact the style is racy and continuously instructive. Of all the books on the financial meltdown this is one of the best. If there is a criticism it might be that the focus is exclusively on the USA (where admittedly the subprime scandal originated and slowly contaminated the investment world with stored-up catastrophe); the parts played by debts run up by Eurozone governments like Greece and Ireland, or the catastrophic collapse of the Icelandic banking system which lost more money in a few days than the entire productive capacity of the Icelandic economy, are given scant attention. Of course it's the same basic cause everywhere: overspending with money you don't have, cooking the books, immersing everything in a sea of complexity so deep no-one really understands what is going on; endemic fraud on a massive scale, and old-fashioned greed.

Buy or borrow the book if you can. You don't need a degree in economics to follow McLean and Nocera's lucid text, just be average-smart and pay attention. At the end of the book, you'll understand more about how it all happened, and why.

Could it all happen again? Sure it could, and it probably will.
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on 12 February 2012
This book, subtitled "unmasking the men who bankrupted the world" does no such thing.

At the end the authors correctly state: "People also felt that a great crime had been committed, yet there was not going to be a great punishment...Much of what took place...was immoral, unjust, craven, delusional behaviour..." Then incredibly they claim "but it wasn't criminal. The most clear-cut cases of corruption - the brokers who tricked people into bad mortgages, the Wall Street bankers who knowingly packaged bad mortgages - are in the shadows, cogs inside the wheels..."

Huh? They finger only those silly, young employees who were greedy but ignorant (and hired precisely for their credulity) for doing what they were told to do by their corrupt bosses, when those bosses were the ones who got the millions in bonuses? As an example, the book recounts how, in 2006, the head of the largest US mortgage lender, Countrywide, described one of his own mortgages as "the most dangerous product in existence and there can be nothing more toxic" but (of course) did nothing to replace it.

He ultimately left a bankrupt Countrywide after also pocketing over 150million from selling his stock at the peak - while year after year mortgage industry practices continued to get worse and worse. But, in the end, the authors blame only the mortgage brokers at the bottom of this food chain? No: follow the money - upwards.

Also, why no mention that the whole sorry story is totally psychopathic? While it is being admitted - mostly with a helpless shrug - that most corporations appear to be psychopathic, that's like blaming reckless driving on cars. The drivers controlling the vehicles are the law breakers.

Actually very few psychopaths are serial killers; in fact most are clever and appear charming, which confuses the rest of us, who've been trained to think of the likes of Brady/Hindley and Dr Shipman (in the UK) and Al Bundy (in the US). Psychopaths are often highly charismatic, but their greedy actions reveal their chronic inability to feel guilt, remorse or even anxiety about negative consequences to others.

Search online for a fastcompany article "Is Your Boss a Psychopath?" just one of an increasing number of books and articles revealing big-name CEOs to be psychopaths. Psychopaths believe they are entitled to steal with impunity and feel only contempt for the moral majority but all theft is against your inherent and inalienable basic rights: we ALL have the right of full disclosure. No one may steal anything; not your money, not your livelihood, not your property, not your body, not your life.

"Freedom" by Veronica Chapman is an eye-opening primer on your basic rights. It may be possible (but unlikely) that no statutes were broken but it is certain that the basic law was consistently ignored. Mis-selling is a crime and no amount of smoke and mirrors can change that. Laws have clearly been broken, and massively. It is tragic to have to conclude that those at the top - of the financial sector, politics, and the military-industrial complex - are all part of a criminal cabal; psychopaths protected and rewarded by the puppeteers.

Shouldn't the spotlight - in a book subtitled "unmasking the men who bankrupted the world" - have been on those puppeteers? This book, and others like it, recounts the stories playing out on the stage, conveniently ignoring everything behind the scenes. Come to that, who was controlling the Bushistas, the CLInts, Obama ("change, now") and other figureheads? It's not difficult, just follow the money ... to the 10 richest "families" (many think of the Rothschild and Rockefeller families but even they are "bankers" for those with much more hidden wealth including the Vatican and the English "royal" family - which openly do not pay taxes). Then ask why these psychopaths are stealing even more trillions; malevolently trashing our planet and deliberately creating even more worldwide suffering.

It's more than time to pull their teeth, instead of letting these psychopaths continue to own and manipulate everything (politics/governments, finance/economy, war/terrorism, "health"care, drugs (legal and illegal), prostitution, energy resources, schooling, food supplies, news/entertainment, transportation, you name it) to our detriment while we practically worship them. A common thief goes to prison while these financial rapists are mostly glorified: the richer they are, the more adulation we give them.

How is it possible that psychopaths are estimated at 4 per cent of the population but overwhelmingly infest the top of all systems? Cooking recipes specify that scum needs to be skimmed as it rises to the top. How is the recipe for humanity any different?

We are seeing the end-game now - for them or for us, WE get to choose. They have the control, for now anyway, but we (the masses) have the power. Just say "no". It's more than time for change: real change, right change.
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Format: Paperback|Vine Customer Review of Free Product( What's this? )
American journalists have always had a record for producing long and meticulous accounts of events that seem outlandish to the man in the street. In this case a lot of financial data meets some very odd personalities. The authors manage to take us through much of the complexity into a world where stupid greedy and arrogant men rule their team-playing subordinates (eliminating any that show signs of individual thought) and bully their regulators using hired political help. The result is wide-spread financial problems for which many of the non-financial population will pay for with taxes and jobs. Having made a career of being out of step with management I found the whole story wearyingly familiar, especially the bit where the bosses find they've been rolled in much the same manner as their own marks.

If I have any criticism of this book it relates to three areas. Firstly, the almost total immersion in America. I would have liked to know if this was entirely an American-generated problem into which the rest of the world only injected funds. Secondly, I felt the end of the story was told too fast. It was as if the cast of villains for whom we had selected many a punishment were washed away in tsunami. Thirdly, I would have liked more on Paulson's abandonment of Lehman Brothers - blamed by Anatole Kaletzky for much of what followed.

But these are Oliver Twist complaints: Please, sir, I want some more!
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on 12 February 2011
Based on first hand accounts of many of the players involved, this book tells the tale of how unfettered greed led countless highly intelligent people to act in a totally irrrational way. It is not difficult to understand these traits in newly formed hard lenders but the book shows how they could only succeed with the shameful pressure of big Wall Street institutions. The role of many big institutions is surprising but the sheer audacity of Goldman Sachs is breathtaking. And meanwhile the Regulators were not innocent bystanders who had no idea what was going on. They new all right, but most came from 'the Street' or for ideological raesons thought nothing should be done to stop the bad practices that were emerging. But not content with being passive observers they actively prevented others from taking action to prevent predatory lending, even if that meant abusing their own powers. The book is gripping from the very beginning and maintains an unbelievable pace throughout. A must read for anyone who is interested in how the financial world blew up. Easy to read without an understnding of the complex products that were at the heart of the problem.
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on 11 March 2016
Great book, but you have to have an appreciation and interest for the subject in general to sit through it, I think.

That said I found it very engaging, the authors try constantly to put the facts in a greater context, so you see the repercussions the decisions made had on the group of "normal people" that most people reading this book belong to.
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on 13 February 2014
Having read and enjoyed Bethany McLeans account of the Enron debacle, I decided to read All the Devils Are Here, although, needless to say, it is not the first book I have read on the subject. This account trumps most others due to its depth and size of scope. It takes you from the events that sowed the seeds to the crisis, like the advent of the mortgage-backed security, to the bankruptcy of Lehman Brothers. In doing so, it covers all important institutions and literally hundreds of characters. Some, notably Alan Greenspan, come off in a very bad light, while for example Hank Paulson is portrayed more positively. However, in spite of its title, the book is not about the right or wrongdoings of individuals, but rather an account of a colossal systemic failure. This ranges from the fraudulent subprime lenders and CDO underwriters to the FED and other regulatory agencies as well as politicians at the federal level, who completely abandoned their roles as overseers and among other things exempted lenders from state laws passed to prevent predatory lending. Particularly interesting was also the parts about the GSEs Fannie and Freddie, run as private companies for shareholder profit at the expense of the US government. Although not as thrilling as for example Michael Lewis The Big Short, All the Devils Are Here make it up by being detailed and insightful.
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