WASHINGTON -- If you're looking to bone up on the causes of and solutions for the global financial crisis, you're in luck. A bevy of new books on the crisis -- from fly-on-the-wall accounts to those that point a way forward -- will keep you busy through the long nights of winter.
Here's a sampling:
ON WALL STREET:
"Too Big to Fail" -- This thick book by New York Times financial columnist Andrew Ross Sorkin is a captivating fly-on-the-wall account of the turbulent days that surrounded the collapse of Lehman Brothers in September 2008, a month like no other in U.S. economic history. Written for a nontechnical audience with clear explanatory prose, the book's personal details about Wall Street and Washington actors could be more about insiders than some readers like.
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"House of Cards" -- By William D. Cohan, a former trader turned journalist. Offers a behind-the-scenes look at how investment bank Bear Stearns came to be a titan and why it collapsed. A fascinating look at how outsized egos and their seeming lack of interest in mounting risks played a huge role in bringing about the financial crisis.
"A Colossal Failure of Common Sense" -- By former Lehman Brothers executive Lawrence G. McDonald. Not an easy read, and chock full of opinions. Offers a unique view into how non-bank lenders such as New Century Financial Corp. and their investment-bank facilitators such as Lehman and its competitors made bad decisions. This book pulls no punches.
"It Takes a Pillage" -- Nomi Prins, former managing director at Goldman Sachs, wins the prize for the cleverest title. Covers a broad area of what went wrong on Wall Street, with a decidedly political view. Opinionated chapter titles such as "Big Banks Mean Big Trouble" and "Change, Really?" You don't need a Ph.D. to enjoy her book.
ON THE HOUSING CRISIS:
"Financial Shock" -- Author Mark Zandi is the frequently quoted chief economist for Moody's Economy.com. His short and easily understandable book examines how problems in the market for subprime mortgages given to the least creditworthy borrowers snowballed into a global financial crisis. If you don't read beyond his eight-page introduction, you'll still have learned what went wrong.
"The Subprime Solution" -- By Yale economist Robert J. Shiller. Another short and direct book on what went wrong in mortgage finance. Shiller coined the famous Wall Street phrase "irrational exuberance." He proposes new kinds of mortgages that can withstand the current shocks. A bit technical for average readers.
ON THE FEDERAL RESERVE:
"In Fed We Trust" -- By David Wessel, Wall Street Journal economics editor. Examines how the Fed performed before and during the crisis, and is of great interest to those who follow the central bank.
"End the Fed" -- Texas Republican U.S. Rep. Ron Paul is on a personal crusade to abolish the Federal Reserve. If conspiracy is your thing, this is your book and Paul, a former Republican presidential candidate, is your guy.
"Too Big to Save?" -- As the chairman of MFS Investment Management, author Robert Pozen has a keen sense of global finance. The subtitle explains his mission, "How to Fix the U.S. Financial System." Tackles all things technical, from insurance-like credit default swaps to money markets and short selling of stocks. Pozen tries to explain complex issues for average readers, but in the end complex matters are, well, complex. A tough but valuable read for anyone who's interested in how America gets out of its financial mess. Should be required reading on Capitol Hill.
"This Time Is Different" -- Economists Carmen S. Reinhart and Kenneth S. Rogoff offer an exhaustive look at what they call "eight centuries of financial folly." Their point is that what's happening now has happened before. Nations and investors repeat mistakes by convincing themselves that, as the title suggests, things are different this time. This book -- full of charts, graphs and tables -- may be too technical for the average reader, but it's of value to anyone who's interested in economic history.
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