The Sellout

How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System

 
3.5 based on 19 reviews.

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Hardcover Book, 576 pages

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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

  • Subtitle: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System
  • Media: Hardcover Book, 576 pages
  • Publisher: HarperBusiness (November 01, 2009)
  • ISBN-10: 0061697168
  • ISBN-13: 9780061697166
  • Dimensions: 6.4 x 8.9 x 1.5 inches
  • Shipping Weight: 1.65 lbs
  • Note: Some of this information came from Amazon.com

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Customer Reviews

  • Rating Perfectly adequate  Nov 16, 2009 (14 of 18 found this helpful)

    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.

  • Rating Excellent insight into the reasons for the crisis  Nov 6, 2009 (24 of 33 found this helpful)

    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 banker

  • Rating A modern-day Pecora Report  Nov 10, 2009 (6 of 9 found this helpful)

    In the wake of the stock market crash of 1929 the Pecora Commission investigated Wall Street, and detailed many outrageous practices in the "Pecora Report" that led directly to the establishment of the SEC and other regulatory structures. Gasparino is trying to do something similar in this book: show us the long, tangled, enormously complicated underpinnings of a Wall Street culture and decision-making apparatus that seems completely disconnected from reality and "Main Street" logic. Would that this were a modern-day Pecora Report--would that this book and others like it could lead one day to new, well-crafted regulatory oversight!

    I also recommend Andrew Ross Sorkin's Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System---and Themselves and Paul Krugman's The Return of Depression Economics and the Crisis of 2008 as well as the Pecora commission report from the Great Depression: The Pecora Report: The 1934 Report on the Practices of Stock Exchanges from the "Pecora Commission"

  • Rating Zero Stars Not an Option?  Nov 15, 2009 (19 of 30 found this helpful)

    With this book, did Gasparino become one of the few authors to have written more books than he has read? While one previous review called it a "good paperweight," I would argue that it is for the person who did not care what his visitors thought of him, as the second they saw this on a coffee table, any educated person would wince. An easy read, yes. Pandering and superficial, of course. The introduction alludes to the book being "written in the spirit of Bonfire of the Vanities" and "Liars Poker" - pathetic attempt to elevate this book that is not 1/1000th the power of Bonfire or 1/500th Liars Poker. Journalistically, this is as credible and well written as any of the 20 Obama biographies that came out three days after the election - opportunistic and superficial. For anyone without a newspaper this will be mildly interesting, for anyone else this should be on your "Do Not Buy" list. Pugilist Gasparino may have taken too many to the head, as no where to be found is the culpability of financial journalists that repeat rumors, get things fed to them by investor relations people and spin-meisters, and reporters that throw out conjecture that makes no sense - all things that licensed professionals in the financial services industry are forbidden from doing. More sensationalist tv journalists can hide behind freedom of the press. One wonders as reading this book, where were the responsible financial journalists during this? There were many, but I do not recall Gasparino blowing any horns ahead of time. The reader can come away thinking that with all of Charlie's insider references - and there are tons, like cell phone calls and chatting over Chinese food with Bear Stearns CEO's and the like, that perhaps the author was incapable of sounding the alarm ahead of time as he was too intertwined in their world, too dependent on their giving him information and ideas to turn on them - and could only do so now when there is no one left to risk offending. The insider name-dropping in the book is obtrusive and an obvious attempt to make the book an appealing financial industry version of an US magazine. Readers might be led to believe that the author was somehow an inside the circle of what was going on, and not simply being brought into some conversations just to be used to achieve the goals of the very people he is now criticizing. The actions of Madoff and others are horrendous and this review is not to suggest that horrific crimes were not taking place or that greed has not corrupted the system, but missing is any serious exploration of some of the root causes and some of the potential solutions, or how the problems continue now with simply different players. Chronicling the debacle is fine, but doing it well with some insight appears either beyond the slapdash deadline the author had or his capabilities.

  • Rating Brave voice on a vital topic  Nov 5, 2009 (15 of 24 found this helpful)

    Thank goodness there is someone willing to thoroughly investigate and clearly articulate these issues that are so vital to the future of our economy. Don't listen to the haters who want to keep someone like Garparino from peering behind the curtain and letting the American public know what's really going on. "Blood on the Streets" was an amazing expose and "The Sellout" is more of the same-- just what we need.

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