Product Description

The definitive account of Wall Street's stunning collapse

From critically acclaimed investigative journalist and CNBC personality Charles Gasparino comes a sweeping examination of the most recent volatile, anxiety-ridden era in our nation's socioeconomic history. The Sellout traces the implosion of the financial services business back to its roots in the late 1970s when Wall Street embraced a new business model predicated on taking enormous risks. It shows how a backwater business involving the trading of risky bonds packed with mortgages showered countless billions in profits on the financial industry but sowed the seeds of its ultimate demise. Gasparino walks readers through Wall Street's three-decades' love affair with risk, revealing a trail of culpability—from the government bureaucrats who crafted housing policies that encouraged homeownership, to the Wall Street firms that underwrote and invested in risky debt, to the mortgage sellers who handed out loans to people without the financial wherewithal to pay them back, to the homeowners who became convinced they could afford mansions on blue-collar wages. The ongoing tumult in financial markets and the global economy began when some of our most esteemed financial institutions, our government, and even average citizens abdicated their collective responsibilities, eventually selling out investors and selling off the American Dream itself.

In the spirit of classics such as Barbarians at the Gate and Liar's Poker, this page-turning narrative captures how avarice, arrogance, and sheer stupidity eroded Wall Street's dominance and profoundly weakened the financial security of millions of middle-class Americans. Eye-opening and engrossing, The Sellout provides the most thorough investigation to date of this latest gilded era.

Product Details

• Amazon Sales Rank: #260 in Books
• Published on: 2009-11-01
• Released on: 2009-11-03
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 576 pages

Features

• ISBN13: 9780061697166
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.
• Click here to view our Condition Guide and Shipping Prices

Review
"Gasparino describes, in page-turning detail, a Wall Street world of ruthless financial titans.. No collection of courtroom documents will ever tell the story.as well as Mr. Gasparino does." (Wall Street Journal, on King of the Club )

"An especially aggressive reporter." (Vanity Fair )

"[A] splendid account of the financial meltdown." (Wall Street Journal )

"A tough outsider willing to go to battle with anyone--colleague or contact-in pursuit of the story." (Financial Times )

"Gasparino is credited with breaking some of the more titillating tales of Wall Street misconduct." (New York Post )

"Born in the Bronx to a construction worker and a housewife, Gasparino has risen from his working-class roots to become one of the most influential business reporters at work today." (PR Week )

"Gasparino has consistently broken news on some of the biggest financial scandals of recent years, including the fall of Martha Stewart, Henry Blodget, and Jack Grubman. As anyone who reads the business pages knows, Charlie is one of the best reporters in the field." (Mark Whitaker, former editor, Newsweek )

About the Author

Charles Gasparino is an on-air editor for CNBC, a columnist for the Daily Beast and the New York Post, and a freelance writer for Forbes and other publications. He previously wrote for Newsweek and the Wall Street Journal, where he covered issues on Wall Street, including pension funds, mutual funds, and regulatory issues. Gasparino has won numerous business journalism awards, and he is the author of Blood on the Street, which was a BusinessWeek bestseller and was listed by Barron's as one of the best business books of 2005, and King of the Club, which was named one of the best business books of 2007 by Library Journal.

Customer Reviews

Excellent insight into the reasons for the crisis
Rated 4.5 stars; rounded up.

It's almost impossible to understand what happened on Wall Street in 2007 and 2008 without going back in time to the 1970s, the era in which investment banking changed forever. And that's what Gasparino does in this book, making it one of the most valuable books about the financial crisis published so far that the general reader is likely to find. Its nature is likely to come as a surprise to anyone who is familiar with the author only from his television appearances; while it has all the gossipy insights into Wall Street that Gasparino has always delivered (including Jimmy Cayne, the former CEO of Bear Stearns, offering him what Cayne described as a joint in an elevator one day...), it thankfully goes well beyond that. The scandalous tales about daily life on the Street are there to entertain and amuse us, sure, (along with a reasonable degree of self-promotion) but the author combines that with solid analysis and insight into the role played by the evolution of structured finance and the failures of risk management.

Most significantly, Gasparino pays attention to history, specifically to the way that a handful of bond market honchos transformed the mortgage lending market from a local business into a Wall Street affair. He weaves together the strands of the narrative deftly, showing how politics in Washington and greed on Wall Street combined to turbo-charge the level of risk-taking and then a series of risk-management failures. Andrew Ross Sorkin's book,[...] is more elegantly written and works as a great chronicle of the months that lay between the collapse of Bear Stearns and the near-apocalypse of September 2008, six months later, but a lot of the historical context needed to understand why those events unfolded as they did is missing. In contrast, Gasparino tries to accomplish something more ambitious, explaining how risk moved from becoming a way to boost profits on Wall Street to being the heart of Wall Street's business. What happened to Wall Street wasn't just about subprime lending or leverage -- it's about why the creation of mortgage-backed securities and leverage became the heart of what Wall Street is all about.

So far, the only books I've seen to have shed light on this issue aren't easily read by a general reader without a knowledge of finance or a high tolerance for jargon. [...] What Gasparino does is to present some of the same concepts in a gossipy, chatty book that should appeal to those on Main Street who are striving to understand just what happened and how it could happen.

Gasparino's thesis is that government policy encouraged that risk-taking to reach extreme levels -- in the great debate over whether Washington or Wall Street is more to blame with the mess, he comes down on the side of blaming Wall Street. (I'm not sure I agree, but his argument is thoughtful, logical and well-supported by the facts that he musters.) He correctly identifies the 1998 collapse of Long-Term Capital Management as a turning point in the process; after that point, it became politically impossible to let a large financial institution fail (and the CEOs of the large investment banks came to realize that.) After seeing just how urgently regulators pursued a bailout style solution to that conundrum, followed by the efforts to prevent Bear Stearns bankruptcy in early 2008, why would Dick Fuld take seriously the suggestion that he take urgent steps to bolster his balance sheet? Long before the critical events of September 2008, which culminated in a bailout of Fannie Mae, Freddie Mac and AIG (not to mention the TARP program that has left the US taxpayer owning stakes in B of A and Citigroup), `moral hazard' was alive and well on Wall Street. In Gasparino's view, misbegotten government policies designed to make home ownership possible for all Americans (even those not in a position to afford it) should shoulder most of the blame. But the bankers aren't let off the hook, either. Their errors of judgment and oversights are placed in the spotlight and held up to scorn.

It helps that Gasparino has been covering Wall Street and all its doings for the better part of two decades, starting on the ground floor (the guys doing the bond deals) and working his way up to writing about Wall Street CEOs like Cayne, Fuld and John Mack. Sure, he's self-promotional, but he also has access to a network on Wall Street that is both broad and deep. And in this case, he's pulled off a book that is as much analytical and anecdotal. That combination could make it stand as one of the best books about the crisis, despite the rather glib conclusions about what needs to happen next. Gasparino is good at tackling what happened, and identifying villains across the landscape, but the reason this gets 4.5 stars instead of 5 (and came close to being rounded down instead of up) was that the forward-looking analysis fell rather flat. Gasparino comes up with some rather predictable recommendations -- ditch the SEC, for instance -- but doesn't have the insight of, say, a Niall Ferguson when it comes to imagining a future shape for what he acknowledges is a deeply-flawed financial system.

Recommended for anyone looking for insight into what we have just been through and why we have had to go through it. Gasparino, always a tenacious scoop-hound, has gone beyond his traditional strengths as a reporter and produced a book that is far better-written and more thoughtful/analytical than his two previous offerings. If you're looking for other reading material on the crisis, Andrew Ross Sorkin's book will take you deeper into the chronology of the critical months (including who ate what, when and where, and the jogging paths of key players in the crisis), but I found the historical context was more perfunctory and the book emphasized the day-to-day drama at the expense of the reasons for the debacle. There are several more detailed books available about both Bear Stearns and Lehman Brothers; [...]

Full disclosure: Gasparino is a former colleague, although we haven't worked at the same organization in about eight years and we're not in touch regularly. I usually don't review books by people I know; I'm making an exception for this one because I think it's both a lively read and one that will help those who aren't on Wall Street get a handle on what happened, and because it provides the kind of historical context that has been largely lacking.

Perfectly adequate
This is a perfectly adequate description of the recent meltdown. It certainly does not rank as one of the better books on the subject. A reader would do better to read Sorkin's "Too Big to Fail" or Wessel's "In Fed We Trust" or Cohan's book about Bear Stearn's collapse. These are all superior to Mr. Gasparino's view of what happened. One comes away from this book with a sense that Mr. Gasparino is full of himself and his view of what has happened is distorted because of it.

technically could be stronger but gets the essence
First off, I worked with or for many of the major characters (especially at Merrill, but also at Morgan Stanley). In particular I was at Merrill during the LTCM debacle and can say that amazingly Gasparino got the character of O'Neal, Kronthal, Kim, Semerci and Latannzio generally correct even in the earlier crisis. I remember O'Neal ripping a new orifice in Connie Voldstadt who headed European fixed income on a conference call in the fall of 1998, without O'Neal really even understanding the actual essence of the problem. Semerci was a salesguy who nearly blew up Turkish accounts with mis-sold derivative transactions in 1997-98, yet i can see O'Neal being enamoured with him and unbelievably putting him into a position that people 10 times smarter than him held 10 years earlier. Charlie goes soft on Osman. Dow Kim is another character that gets off relatively easy. Kronthal (and especially Bobby McCann ) comes off as better than he was, still considering the vast number of issues Gasparino got them fairly right.

I think Gasparino covered most of the major issues, the lack of mark-to-market accounting, the hubris, and most importantly stupid assumption that many of us tried to warn various financial institutions was incorreect (that house prices can and do go down, but in 2004-2007 most mortgage involved people had almost a Jonestown belief that it couldn't happen and anyone who thought it could was defective). He gets it right that many of us were of the belief that Greenspans last act of integrity was in 1995 when he made his irrational exhuberance speach. He shows correctly that Robert Rubin was one of the most critical people involved in making the mess, though he doesn't talk about Rubin making a fortune at Goldman on Latin American Debt and then becoming Treasury Secretary under Clinton and bailing out the then exploding latin americans in 1994, effectively covering over his first involvement in a financial blow-up, which should have disqualified him from the further involvement he had in the latest fiancial disaster.

On a technical level the book gets certain trades wrong (as almost every book on derivatives written by non-derivatives people i have ever read has done this - especially another generally good book, "When Genius Fails"). Still it doesn't detract from the generally accurate chronology and causality of the still evolving credit bubble.