Too Big To Fail by Andrew Ross Sorkin
Too Big To Fail by Andrew Ross Sorkin is a non-fiction book that chronicles the events of the 2008 financial crisis and the collapse of Lehman Brothers.
The book follows the story of the most powerful men and women at the eye of the financial storm, from reviled Lehman Brothers CEO Dick Fuld, to banking whiz Jamie Dimon, from bullish Treasury Secretary Hank Paulson to AIG’s Joseph Cassano, dubbed ‘The Man Who Crashed the World’.
The book highlights the warning signs that were ignored due to hubris, management structure, or carelessness. It also provides an in-depth look at the banks that were “too big to fail” and how the U.S. government intervened in situations where failure posed a grave risk to the economy.
Through unprecedented access to the key players, Sorkin meticulously re-creates frantic phone calls, foul-mouthed rows and white-knuckle panic, as Wall Street fought to save itself.
The main themes of the book are the consequences of unchecked greed, the power of the financial sector, and the importance of regulation.
It also highlights the importance of understanding the risks associated with investing and the need for transparency in the financial system.
The book is an extraordinary achievement that will be hard to surpass as the definitive account of the 2008 financial crisis. It is a real-life thriller with a cast of bold-faced names who themselves thought they were too big to fail.
Useful Takeaways:
- The consequences of unchecked greed
- The power of the financial sector
- The importance of regulation (and the importance of avoiding regulatory capture)
- The importance of understanding the risks associated with investing
- The need for transparency in the financial system
What I Liked
I graduated college and started my first job (selling lumber to housing starts) in May 2007 – one month after Bear Stearns failed and kicked off the Great Financial Crisis (GFC). I was laid off and unemployed just 6 months later. I went on to follow and live through the rest of it…but I only saw my little world of what was going on.
Part of my job was pulling building permits at the local courthouse every month. I usually pulled 50+ per month. I remember going in January after the first credit seizure…and pulling nothing. I didn’t understand it, even though I lived through the GFC in very tangible way.
This was the one book that pulled everything that happened and put it all in a perspective that I could understand.
It’s fast paced, it’s engaging, it’s smart – and I loved the movie that came after it.
What I Did Not Like
If hadn’t lived through it, followed all the happenings, and taken a few college courses on the global political economy…I probably would’ve gotten a bit lost. The whole GFC was so complicated and simple at the same time.
