Abigail Hofman: Too Big to Fail, or, hissy fits and enormous egos
I am reading another inside the room account of the recent financial crisis: Too Big to Fail by Andrew Ross Sorkin. If you are interested in financial markets, and I imagine most readers of this column fall into this category, buy or borrow a copy. Initially, I resisted reading the 539-page tome because the subject matter was too closely associated with my work. However, now that I have picked it up I am captivated. Sorkin’s book is not as gripping as other behind the scenes financial narratives, such as Liar’s Poker or Barbarians at the Gate but it is none the less delightful. No one comes out well: Tim Geithner, then head of the New York Fed, is revealed as a serial swearer who throws a hissy fit when his driver fails to appear, Erin Callan, Lehman’s former CFO, is portrayed as vain and materialistic (she kept a model of a private jet on her desk), and Larry Fink, the smug chief executive of BlackRock, is shown incandescent with rage, ranting down the phone to Greg Fleming, president of Merrill Lynch.
The book has editing errors and inaccuracies that are jarring but because of the abundance of enormous egos it is laugh-out-loud amusing. I loved the sequence that describes how, in the summer of 2008, as the share prices of Fannie Mae and Freddie Mac were performing a death spiral, Treasury secretary Hank Paulson sought advice from Alan Greenspan, the former chairman of the Federal Reserve. Greenspan droned on about housing data and mused that the current crisis was a once-in-a-hundred-year event before proffering a practical suggestion. As there was too much housing supply, the best way to fix the problem would be for the government to buy up vacant homes and burn them! I’m sure that conversation made Paulson’s day!
And finally February riddles for the discerning reader: which co-heads of a European outpost of a top US bank are known as "little and large" because of their contrasting heights? Which chairman of a major European bank is given to bouts of pomposity and murmuring sanctimoniously such peanuts of wisdom as: "If we do this, we must make sure to do it right!"?
More Abigail with attitude:
How was your month? Please send news and views to Abigail@euromoney.com