Summary of Fool's Gold
How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe
Copyright © 2009 by Gillian Tett
Reprinted by permission of Free Press, a division of Simon & Schuster, Inc., N.Y.
A journey into the arcane heart of financial darkness: how J.P. Morgan insiders took a wrong turn and caused a wreck.
This ranks as one of the most thorough, accessible explanations of how the global financial system nearly disintegrated during the great financial crisis that broke in 2008. Gillian Tett traces the development of credit derivatives from their inception at an alcohol-fueled Boca Raton corporate retreat in the early 1990s. She shows how the pioneers struggled with risk management, turning down business that other financial institutions with less regard to risk sought eagerly. She elucidates the building and breaking of the wave of institutional crises – Bear Stearns, Lehman, AIG – during 2007 and 2008, and takes readers inside tense meetings between bankers and regulators at the New York Federal Reserve and the U.S. Treasury. This is capital financial journalism, which getAbstract highly recommends to any reader who hopes to get a better understanding of the forces at work in the financial crisis.
In this summary, you will learn
- How and why J.P. Morgan bankers pioneered credit derivatives;
- Why the combination of credit derivatives and mortgage securitization created enormous, hidden systemic risks; and
- What happened to tip the world into global financial crisis.
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