Book Review
Title: The End of Wall Street
Author: Roger Lowenstein
Rating: (5)
ISBN: 978-1-59420-239-1
New York journalist Roger Lowenstein in a long-time writer on Wall Street and this book is a recent attempt to capture the strange story of the subprime meltdown—another financial scandal that should never have happened. The coverage is relatively conventional, with chapters on Fannie and Freddie (plus a little land history); subprime; rating agencies; Lehman Brothers—with side trips on AIG, derivatives, and the CFT; incredible incompetence at Citigoup and Merrill Lynch; the crisis beginning with industry-wide worries and Bear hedge fund bankruptcies, rating agency downgrading of toxic CDOs; attempted action at federal agencies in 2007; problems at Citi and Merrill; then much of the book on the crisis year of 2008, which saw the collapse of Bear Stearns, Fannie & Freddie, Lehman, AIG, and Merrill Lynch. The government response moved from hands-off to incredibly intrusive—called “socialistic” by critics, with the Fed providing trillions of dollars of liquidity and the Treasury, thanks to TARP, recapitalizing the major banks. The final chapter, also called “The End of Wall Street,” considers Wall Street after the crash (although the “New Wall Street” looks like the “Old Wall Street” to me), including possible new regulations (still speculation on this point). As a New York journalist, Lowenstein has a large cast of characters, mainly the usual suspects, but also a number a new ones.
This is one of the excellent books by journalists (e.g., Wessel’s In Fed We Trust and Sorkin’s Too Big to Fail). Michael Lewis’ The Big Short is the best read, but does not provide the detail of Lowenstein (or many of the others). Lowenstein is a good choice for a well-rounded perspective on the complexity of the subprime scandal.
