by Charles Gasparino, 2009, Harper Business, New York

This book (lent to me by one of our friends in Florida) portrays the steps that led to the financial meltdown in the fall of 2008.  The tale is pretty fascinating as it traces the development of the original mortgage-backed securities back in the 1980′s to the crisis in the financial system they eventually caused.  The causes of the crisis, however, are complex and there is plenty of individuals who must share the blame.  What started out as a valid strategy using perfectly sound investment instruments eventually became what is now known as “toxic assets”.  How did this all happen?

Gasparino traces the greed and poor decisions of Wall Street executives, compounded by a well-meaning, but misplaced government policy (home ownership for everybody as a way to climb the economic ladder), that led to the meltdown.  What was surprising to me is that the big meltdown was preceded by many similar, but smaller meltdowns that seemed to occur with the Wall Street firms every few years.  As Gasparino cited the many instances of over leverage and poor decisions over the decades, the line from the song, “Where Have All the Flowers Gone?”, kept coming to mind: “When will they ever learn?”

In October of 2008 we were in Europe on a Danube River cruise.  I recall watching the TV at night as the meltdown went global.  This book, along with those memories, continue to remind me just how bad the situation was and how close we came to going into a deep depression, the likes of which we had never experienced.  I often wonder how there can be so many vocal critics of the “TARP” program, the bailouts, and the subsequent stimulus program.  There can be no question that some of these steps managed to avert a total meltdown.

I took over two months to read this book and it was tough read for me, not because of the actual writing, but, I think, due to the subject material.  It was just hard to read so much bad information and about such stupidity that led us into this situation.  If I had one criticism of the book, I would say that it was somewhat repetitive.  I felt as if I had already read some of the information several times before I finished the book.  Nevertheless, I would recommend this book to anyone who has an interest as to what caused the collapse of our financial systems.

By Thomas L. Friedman, 2005

Most of this book is an overview of the technological advances of the past few years which have allowed the world to collaborate on various types of work projects leading to a new globalization of trade.

As I was reading the book, I was already familiar with many of the tools that he described, but he filled in a lot of the blanks and provided some interesting history as to how these things evolved and gave some insight regarding the individuals who were responsible for their invention.  On the other hand, I thought that the author was overselling the benefits of the new technology in that he made it appear as if they were going to lead us all to some kind of utopian global trade situation.  I kept asking myself, if this is so, why is the world in such a mess?

Friedman redeemed himself in the last part of the book, however, when he outlined the reasons why a good part of the world, primarily the Islamic world, is not buying into the new globalization.  He correctly describes the sources of the cultural divide and is much less optimistic about whether it can ever be overcome.  Because of this more realistic and sobering view, I have much more respect for his overall assessment.