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Jack Covert Selects - Too Big To Fail

by Porchlight Book Company


Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—And Themselves by Andrew Ross Sorkin, Viking Books

Even though Too Big to Fail was written during the same year as the recent financial collapse occurred, Andrew Ross Sorkin has written what we predict will a definitive book on the subject. It tells a gripping "perfect storm" story of what happened when the world's biggest banks became awash in derivatives that bundled predatory loans for subprime mortgages. The inevitable collapse of those financial products caused banks to stop lending almost entirely, leading to a liquidity crisis and a stock market crash. The value of people's homes and 401(k)s began to plummet. Soon, as variable interest rates rose and home values fell, many found that the value of their homes was less than what they still owed on their mortgages. Around 10 million Americans lost their homes in the crisis that ensued. Over three million Americans filed for foreclosure by the end of 2008. At the same time, the government poured $700 billion into a Troubled Asset Relief Program (TARP) to save the banks from failing. 

This is not a book about those who lost everything, though. This is a book about those who had their hands on the levers of power and what they did with those levers in an attempt to save the financial system from total collapse. Each of the major players attempting to manage the crisis are shown here—warts and all. Sorkin takes us inside Henry Paulson's thinking as the Secretary of the Treasury tries to get a grip on the collapse of the investment banks. We see Timothy Geithner "clearly overwhelmed, his eyes darting around his office as he nervously twisted a pen between his fingers." And Ben Bernanke sits "politely nodding in his best professorial manner." Most riveting are Sorkin's descriptions of the meetings between the government representatives and the heavy-hitting and heavily-hit CEOs, bringing to mind Bryan Burrough and John Helyar's classic, Barbarians at the Gate. 

Sorkin describes the call to arms between financial competitors to save such institutions as Lehman Brothers, Bank of America, and AIG as the government got involved: 

The CEOs had all been milling about, tapping away on their BlackBerrys, and pouring themselves cups of ice water to cool themselves from the miasma of humidity that hung in the [New York Federal Reserve Building]. 

After the meeting, "the bankers left expressionless and mute, dumbstruck at the magnitude of the work that lay before them." 

Now, imagine the expressions and demeanor of the millions of American who lost their homes during this time, who lost their tenuous grasp on what we've all been told is a pillar of the American Dream—home ownership. After so much loss, it's a sobering reflection, but a critical reminder that there is still extreme risk involved when there is extreme reward for those willing to take it—even if it means risking the stability and dreams of other people. 

For a book like this to work requires a talented journalist with access and effective story telling. Bob Woodward has done this kind of reporting for years, and Theodore White's great The Making of the President series that started in 1960 is one of greats the genre. Now Andrew Sorkin has now joined them. Great stakes, dogged watchdog journalism, harrowing stories, detailed insider information; it is this combination that places this book among the greats.

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Dylan Schleicher

Dylan Schleicher

Dylan Schleicher has been a part of Porchlight since 2003. After beginning in shipping and receiving, he moved through customer service (with some accounting on the side) before entering into his current, highly elliptical orbit of duties overseeing the marketing and editorial aspects of the company. Outside of work, you’ll find him volunteering or playing basketball at his kids’ school, catching the weekly summer concert at the Washington Park Bandshell, or strolling through one of the many other parks or green spaces around his home in Milwaukee (most likely his own gardens). He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.

Marketing & Editorial Director | he/him | 414-220-4465 | dylan@porchlightbooks.com

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