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the Complete Review
the complete review - business

The End of Wall Street

Roger Lowenstein

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To purchase The End of Wall Street

Title: The End of Wall Street
Author: Roger Lowenstein
Genre: Non-fiction
Written: 2010
Length: 303 pages
Availability: The End of Wall Street - US
The End of Wall Street - UK
The End of Wall Street - Canada

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Our Assessment:

B : fine, readable summary-account of the 2008+ financial crisis in the US

See our review for fuller assessment.

Review Summaries
Source Rating Date Reviewer
The NY Times . 1/4/2010 Janet Maslin
The NY Times Book Rev. . 18/4/2010 Daniel Gross
Publishers Weekly . 8/2/2010 .
Wall St. Journal . 10/4/2010 Dennis K. Berman

  From the Reviews:
  • "The End of Wall Street offers one expert reporter’s domino theory about Wall Street’s collapse. It is a complex but imaginative book, an especially useful piece of the jigsaw puzzle that current Wall Street books are busy creating. (...) His is not a story of blowhard personalities, even if it is filled with C.E.O.’s and financial regulators who arguably control the future of global finance. Instead it is a coherently issue-oriented book that frames each stage of the crisis in terms of the real world’s ability to confound theorists, number-crunching quants, economic historians and other putative experts, many of whom have seen their most cherished ideas destroyed by the events of the last few years." - Janet Maslin, The New York Times

  • "Careful and meticulous, The End of Wall Street covers a lot of well-trodden ground. Still, there’s plenty of telling detail." - Daniel Gross, The New York Times Book Review

  • "The insider knowledge lends flavor and context to many of these stories (.....) Lowenstein’s strong knowledge of the source material and flair for the dramatic -- and doomsday title -- should draw readers who still wonder what went wrong and how." - Publishers Weekly

  • "Mr. Lowenstein is at his best showing the farcical interplay between government and Wall Street. (...) Like any near-contemporary account of a major event, The End of Wall Street is stuck somewhere between history and journalism. It has neither the personal drama of Michael Lewis's recent The Big Short nor the perspective that time affords." - Dennis K. Berman, Wall Street Journal

Please note that these ratings solely represent the complete review's biased interpretation and subjective opinion of the actual reviews and do not claim to accurately reflect or represent the views of the reviewers. Similarly the illustrative quotes chosen here are merely those the complete review subjectively believes represent the tenor and judgment of the review as a whole. We acknowledge (and remind and warn you) that they may, in fact, be entirely unrepresentative of the actual reviews by any other measure.

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The complete review's Review:

       The End of Wall Street is an account of how Wall Street got itself -- and America -- into the financial mess it did in 2008, with the collapse of the subprime mortgage market and the ensuing capital and liquidity crisis, and how the government tried to avert what threatened to be a complete collapse of the economy.
       Lowenstein was a reporter for the Wall Street Journal, and this is a reporter's book: the events and facts carefully spelled out, a few 'personal' touches showing the main actors as human/fallible/etc., and relatively little personal bias (i.e. the finger-pointing, accusations, and ranting are kept to a minimum -- hard though that at times that proves to be, given some of the outrageous behavior and missteps).
       Lowenstein makes a half-hearted stab at using one figure as a sort of unifying thread that goes through the book, considering events as they unfold through his eyes. The person is the manager of a mutual fund (FPA New Income Fund), Bob Rodriguez, and the book opens and closes with him and what's on his mind. It's not a bad idea, but Lowenstein was unwilling to fully commit to that, and so throughout the book Bob just pops up every so often -- and then disappears again. It doesn't wind up adding much to the book, and there are times when it is certainly distracting.
       In twenty chapters Lowenstein goes through the crisis piece by piece, beginning with the over-heating American housing market and then the subprime collapse, and then looking at each of the next major stumbling and fumbling blocks, from various institutional collapses (complete and partial) to the federal government bailout(s). Much of this is familiar material, but Lowenstein's step-by-step progression through it all is fairly useful. His focus on the major players -- from Wall Street as well as the Fed and the Treasury -- and what they were doing is useful and interesting, though the focus on behind-the-scenes action means the fall-out and how it affected Main Street are largely presented only in (stark) numbers and very broad generalizations.
       It's a huge jigsaw puzzle Lowenstein assembles, but he presents all the pieces -- from subprime mortgages to the role of the rating agencies to collateralized debt obligations, as well as the major companies and the approaches they took (and which got them in such messes) -- fairly well. The collapses and near-misses -- Lehmann, Bear Stearns, AIG, Citigroup, Fannie Mae and Freddie Mac -- make up the heart of the book, and it's fascinating to see what happened under such great time pressure. Unfortunately, Lowenstein can't go into much depth, so the accounts only cover the basics. So The End of Wall Street is good as an overview, but can only offer so much detail and analysis -- it's useful, perhaps, as a basic history-text for future generations, but for all who have lived through it it feels a bit thin on detail. Not that Lowenstein doesn't provide a few juicy behind-the-scenes nuggets and scenes; still, for those who lived through the drama, even simply vicariously, through TV reports (or watching their 401(k) holdings collapse ...) there isn't much that doesn't seem familiar.
       Lowenstein chooses not to judge, or at least not too much -- there are some obvious mistakes (borrowing short and lending long ...) that even he can't help but point out, emphatically and repeatedly. And he does occasionally point to some things that he seems to feel have been largely overlooked, as for example regarding money market funds:

     Although the money funds were for the moment safe, the failure to inform investors, save for in some hard-to-decipher fine print, was a huge failing, of which the SEC was strangely tolerant. With fuller disclosure, Wall Street would have realized a sobering truth: the financial system had dodged a bullet. Had investors realized how narrowly they had averted danger, the market would have forced the Street to rein in risk and start raising capital.
       As Lowenstein points out, the crisis made those who believed in an efficient free market look fairly foolish; of course, a main reason why the efficient market didn't turn out to be very efficient was because of a lack of transparency and disclosure (and all that wonderful off-book trickery) -- of which there are any number of horrifying examples in the book. It's amazing what regulators -- including that "strangely tolerant" SEC -- let the financial industry get away with .....
       Among other issues Lowenstein raises is the Goldman Sachs-connection -- how (far too ?) many of the government and other actors had a Goldman link -- and the fact that public outrage focused on things like executive compensation rather than the heart of the matter. (Not that executive compensation wasn't and isn't outrageous -- Lowenstein gives a fill of jaw-dropping examples --, but it's only part of many much larger problems with Wall Street.) Congress' role in the bail-out is discussed fairly summarily (and President Bush barely rates a mention ...); the account is very much focused on what happened in Manhattan, not Washington D.C.
       Lehman head Dick Fuld is quoted as moaning:
Here we go again, perception trumping reality once more.
       But, as Lowenstein shows, in finance perception is reality -- and all these over-leveraged financial institutions had built their houses of cards on it. Lowenstein shows how it came to that -- how easy it was to do (and how hard it was not to get caught up in it, since there was so much easy money to be made). Unfortunately, by the end of his account, early in the Obama administration, perceptions still seems to be what counts most.
       A solid account, The End of Wall Street is a handy little summary that will serve as a useful quick reference book one day. Whether it's of much interest now -- when America is still in the thick of sorting these messes out -- is debatable. While the title promises 'The End of Wall Street' there's little real-life evidence that the players have changed their ways -- and so more critical works pointing out more specifically what went wrong and suggesting how to avoid repeating these mistakes and missteps might be more useful.

- M.A.Orthofer, 6 March 2010

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The End of Wall Street: Reviews: Other books of interest under review:

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About the Author:

       Roger Lowenstein has written several books on business and financial crises.

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© 2010 the complete review

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