Fool's Gold by Gillian Tett
How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe

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Synopsis

From award-winning Financial Times journalist Gillian Tett, who enraged Wall Street leaders with her newsbreaking warnings of a crisis more than a year ahead of the curve, Fool's Gold tells the astonishing unknown story at the heart of the 2008 meltdown.

Drawing on exclusive access to J.P. Morgan CEO Jamie Dimon and a tightly bonded team of bankers known on Wall Street as the "Morgan Mafia," as well as in-depth interviews with dozens of other key players, including Treasury Secretary Timothy Geithner, Tett brings to life in gripping detail how the Morgan team's bold ideas for a whole new kind of financial alchemy helped to ignite a revolution in banking, and how that revolution escalated wildly out of control.

The deeply reported and lively narrative takes readers behind the scenes, to the inner sanctums of elite finance and to the secretive reaches of what came to be known as the "shadow banking" world. The story begins with the intense Morgan brainstorming session in 1994 beside a pool in Boca Raton, where the team cooked up a dazzling new idea for the exotic financial product known as credit derivatives. That idea would rip around the banking world, catapult Morgan to the top of the turbocharged derivatives trade, and fuel an extraordinary banking boom that seemed to have unleashed banks from ages-old constraints of risk.

But when the Morgan team's derivatives dream collided with the housing boom, and was perverted -- through hubris, delusion, and sheer greed -- by titans of banking that included Citigroup, UBS, Deutsche Bank, and the thundering herd at Merrill Lynch -- even as J.P. Morgan itself stayed well away from the risky concoctions others were peddling -- catastrophe followed. Tett's access to Dimon and the J.P. Morgan leaders who so skillfully steered their bank away from the wild excesses of others sheds invaluable light not only on the untold story of how they engineered their bank's escape from carnage but also on how possible it was for the larger banking world, regulators, and rating agencies to have spotted, and heeded, the terrible risks of a meltdown.

A tale of blistering brilliance and willfully blind ambition, Fool's Gold is both a rare journey deep inside the arcane and wildly competitive world of high finance and a vital contribution to understanding how the worst economic crisis since the Great Depression was perpetrated.
 

About Gillian Tett

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Gillian Tett oversees global markets coverage for the Financial Times. She was named Business and Finance Journalist of the Year at the 2009 British Press Awards, and she has also won the Wincott Prize, the premier British award for financial journalism. She holds a Ph.D. in social anthropology from Cambridge University. Stephen Hoye has won thirteen AudioFile Earphones Awards and two prestigious APA Audie Awards, including one for the New York Times bestseller Rich Dad, Poor Dad by Robert T. Kiyosaki. A graduate of London's Guildhall and a veteran of London's West End, Stephen has recorded many other notable titles, such as Every Second Counts by Lance Armstrong and The Google Story by David A. Vise and Mark Malseed.
 
Published June 9, 2009 by Free Press. 305 pages
Genres: Business & Economics, Professional & Technical, History, Biographies & Memoirs, Political & Social Sciences. Non-fiction

Unrated Critic Reviews for Fool's Gold

Publishers Weekly

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At once a gripping narrative, an education in derivatives, and a most lucid origin-story for the current financial meltdown, it's no surprise the author of this volume is an award-winning Financi

May 04 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

The New York Times

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Two new books illuminate the groupthink blindness that came to afflict much of Wall Street and Washington.

Jun 16 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

The New York Times

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“As with most intellectual breakthroughs, the exact origin of the concept of credit derivatives is hard to pinpoint.”

Jun 14 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

The New York Times

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An account of how J. P. Morgan bankers invented dangerous new ways of dispersing risk that contributed to the present financial crisis.

Jun 14 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

The Guardian

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Chasing Alpha: How Reckless Growth and Unchecked Ambition Ruined the City's Golden Decade by Philip Augar 272pp, Bodley Head, £20 Fool's Gold: How an Ingenious Tribe of Bankers Rewrote the Rules of Finance, Made a Fortune and Survived a Catastrophe by Gillian Tett 352pp, Little, Brown, £18.99 M...

May 02 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

The Guardian

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The first was held in June 1994, in Boca Raton, Florida, when a dozen young bankers from JP Morgan in London, Tokyo and New York descended on a hotel where they got drunk, threw the bosses into the pool and discussed how they would grow the derivatives business.

Jun 07 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

Publishers Weekly

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Ignoring the tacked-on, preachy epilogue (in which Tett advocates her specialty, social anthropology, as a way to avert future such crises), Tett's explosive, illuminating narrative is the one to read for anyone confused by the present financial mess.

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The Washington Post

Morgan investment bankers, employees of the firm's swaps department, were among the smartest and most creative proponents of the new financial tool called derivatives, defined prophetically in 2003 by the investor Warren Buffett as "financial weapons of mass destruction."

Aug 09 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

Business Week

It means that while the bank may still engage in trading of commodities contracts for profit, it will no longer be in the business of owning actual oil, natural gas, and metals such as copper and steel as part of its trading strategy.

Apr 03 2014 | Read Full Review of Fool's Gold: How the Bold Dre...

Seeking Alpha

This book review is my fourth, in a series of reviews on the financial crisis.

Jan 04 2010 | Read Full Review of Fool's Gold: How the Bold Dre...

Seeking Alpha

PRO Deehena Deehena ...

| Read Full Review of Fool's Gold: How the Bold Dre...

Seeking Alpha

This book review is my fourth, in a series of reviews on the financial crisis.

Jan 04 2010 | Read Full Review of Fool's Gold: How the Bold Dre...

Seeking Alpha

In financial markets the barriers to entry into a new market are extremely low and so once a successful new product is brought to market it can be easily duplicated or enhanced upon.

Jun 13 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

The Finance Professional's Post

New innovations in credit derivatives were now combined with innovations in consumer credit such as subprime mortgages, option ARMs (adjustable-rate mortgages), interestonly mortgages, and other forms of lending that layered risk factor on risk factor.

Jan 11 2011 | Read Full Review of Fool's Gold: How the Bold Dre...

The Finance Professional's Post

The Finance Professionals' Post educates readers in the finance and banking sectors on the forces that shape their business.

Aug 30 2010 | Read Full Review of Fool's Gold: How the Bold Dre...

Spectator Book Club

The idea developed into the bank bundling up several of its loans and then selling investors slices of the bundle.

May 09 2009 | Read Full Review of Fool's Gold: How the Bold Dre...

Reader Rating for Fool's Gold
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