Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a CatastropheFrom award-winning Financial Times journalist Gillian Tett, who enraged Wall Street leaders with her news-breaking 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. |
Contents
3 | |
DANCING AroUND THe reGULATorS | 25 |
THe DreAM TeAM | 41 |
THe CUFFS CoMe | 59 |
MerGer MANIA 3 | 72 |
PerverSIoN 6 7 8 9 | 87 |
INNovATIoN UNLeASHeD | 89 |
Mr DIMoN TAkeS CHArGe | 104 |
DISASTer | 165 |
FIrST FAILUreS | 167 |
PANIC TAkeS HoLD | 180 |
BANk | 192 |
BeAr BLoWS | 214 |
Free FALL ix | 227 |
23 | 245 |
281 | |
rISkY BUSINeSS | 117 |
LeverAGING LUNACY | 129 |
TreMorS | 143 |
Other editions - View all
Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was ... Gillian Tett No preview available - 2009 |
Fool's Gold: The Inside Story of J.P. Morgan and How Wall St. Greed ... Gillian Tett No preview available - 2010 |
Common terms and phrases
American analysts assets balance sheet Bank of england bank’s Basel Bear Stearns Bear’s billion BISTro bonds boom Brickell Cairn capital CDo of ABS Citi Citigroup clients collapse colleagues commercial paper companies corporate Corrigan created credit default swaps credit derivatives credit risk crisis deals debt decade default Demchak derivatives world Duhon early enron equity Feldstein financial system Geithner global Goldman Sachs Greenspan Hancock hedge funds Henry Paulson housing idea innovation investment bank investors ISDA issued J.P. Morgan J.P. Morgan bankers Jamie Dimon JPMorgan Chase Lehman Brothers lender leverage loans London losses Masters merger Merrill Lynch models money-market funds Moody’s needed officials percent problem profits ratings agencies regulators sector securitization sell senior shadow banks shock SIvs started subprime mortgage super-senior risk swaps told trading tranches Treasury trillion Wall Street wanted Weatherstone York