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

Fool s Gold How the Bold Dream of a Small Tribe at J P Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe From award winning Financial Times journalist Gillian Tett who enraged Wall Street leaders with her newsbreaking warnings of a credit crisis than a year ahead of the curve Fool s Gold tells the asto

  • Title: Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe
  • Author: Gillian Tett
  • ISBN: 9781416598572
  • Page: 110
  • Format: Hardcover
  • From award winning Financial Times journalist Gillian Tett, who enraged Wall Street leaders with her newsbreaking warnings of a credit crisis than a year ahead of the curve, Fool s Gold tells the astonishing unknown story at the heart of the 2008 meltdown.

    One thought on “Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe”

    1. This is one of the drier accounts of the 2008 financial meltdown. Journalist Tett begins in the 1990s with the invention of the credit derivatives at J.P. Morgan that would fuel the massive buildup of toxic leverage a decade later. Somewhat paradoxically, by that time the venerable J.P. Morgan had merged with the commercial bank Chase to become JPMorgan Chase (the periods vanished in order to disassociate from the idea of Morgan, the man), led by the risk-averse Jamie Dimon. Dimon was never will [...]

    2. I've done a fair amount of reading about the Panic of 2008, and Gillian Tett's "Fools Gold" explains the exotic investment instruments at the heart of the panic better than any other work I've read. A group of derivatives traders at J.P. Morgan created commoditized credit default swaps in the early 1990s as a way to move risk off the company's books, freeing up capital for lending and investment that otherwise would need to be held in reserve. Morgan made payments to AIG, which assumed the risk [...]

    3. This is yet another book about the credit crunch and the Crash of '08, but it's one of the best. Gillian Tett tells the story of the crisis from the point of view of JP Morgan. Morgan was an early innovator in the derivatives market. Indeed Tett credits Morgan with creating the credit default swap market which eventually overwhelmed the financial world. But, having created the market, Morgan walked away from it when it was unable to develop any sort of reliable risk modeling. As a result, Morgan [...]

    4. Another crisis/bailout book, this one told mostly from the point-of-view of J.P. Morgan, which came out slightly less dirty than most everyone else once the dust settled. It’s interesting to learn how derivatives became the Frankenstein’s monsters of the financial industry – the Morgan folks who thought them up meant well, and to an extent they make a kind of sense (spreading risk around to lessen its negative effects), but when misused, they brought the house down. Also, Jamie Dimon must [...]

    5. Well-done account of the Global Economic Meltdown of the Year Eight as seen from inside J.P. Morgan. Tett focuses on the rise and collapse of the credit derivative market--- she is the FT's specialist on that ---and not on the subprime mortgages that attract so many other authors. Her angle here is that CDS and derivatives were designed by her main characters not as "financial weapons of mass destruction" but as perfectly legitimate instruments for dispersing risk and were employed with no clear [...]

    6. Excellent read. Good focus on the evolution of credit derivatives and how a small coterie of bankers at JP Morgan changed the world. I found this book a much more enjoyable read than Ms. Tett's columns at the FT. Given a chance to tell a story in depth and paint idiosyncratic portraits of eccentric bankers at work and at play, Ms. Tett's writing style and skills are given more space. Reading this book, one gets the sense of a Dr. Frankenstein type scenario where some financial engineers with goo [...]

    7. Good sketch of some of the structural factors behind the GFC. Chief factors appear to be: (i) Excessive securitisation of inappropriate underlying assets, with risk retained on bank balance sheets -- key word is excessive, not derivatives -- with the residual super-senior risk being taken up by banks themselves onto balance sheet, without due recognition of fact that CDOs were not meant to be written on mortgages in the first place but on diversified corporate loans, let alone to the extent that [...]

    8. If you're like me, making sense of the economic implosion has been difficult. I am lucky if I can manage to keep my checking account balance. So, the whole world of "derivatives" and "complex investment vehicles" generally soars right above my head. That is, until I stumbled upon Gillian Tett's book, Fool's Gold. Now, I am still no economic expert, but I feel like Tett has provided me with a primer to sort through the mess brought about by a small band of investment bankers that left a devastati [...]

    9. Is Wall Street motivated solely by greed, or do its bankers have humanity’s interests at heart? In this revealing account of the events leading up to the Global Financial Crisis, Gillian Tett sheds light on how investment bankers think, why they made the decisions they did, and how it all came unstuck. Tett, anthropologist and editor of the Financial Times, explains how a small team at J.P. Morgan believed they were developing financial products that would reduce risk and help stabilise the gl [...]

    10. A very interesting read, with lots of details and a good flow; however, Tett's writing doesn't allow for the drama to come through, like in other contemporary business (failure) books. Worth a read.

    11. British voters paid little attention to Jamie Dimon’s threat to relocate 4,000 JP Morgan jobs from London in the event of Brexit. But underneath the small print they might have missed the real concern – the world’s most prestigious bank relies on its London offshoot to nurture its Derivatives operations. In reality, England’s capital has been a welcome centre for American retail banks hoping to blur the lines between commercial and investment banking for the last five decades. Will that [...]

    12. I was pleasantly surprised by this book, as the rather hysterical sub-title had me worried. But the book is actually a balanced account of aspects of the development of markets that led to the crisis. In particular, it focuses on the J.P.Morgan team that played a pivotal role in the development of credit derivatives and the picture painted of that bank and that team is far from what I had expected from said sub-title. It's a well-written book and one of the best I've read in explaining in simple [...]

    13. While I admit I am a bit behind on my current event reading (this book was published in 2009), the effect of the mortgage meltdown is still with us and we are being set up again for another, similar situation. I have read multiple books on this time period, including Paulson's autobiography. I continue to believe not enough people went to prison for mortgage fraud. I also continue to believe Iceland did the right thing in letting their banks fail rather than bail them out (as we did, effectively [...]

    14. This is a fantastic book about the creation of financial instruments that was misused, mainly due to greed, and resulted in the Global Financial Crisis of 2008. The book gives the background of the people involved and the decisions made by staff at J.P. Morgan from the 1990s until 2008. I found the book to be a good read, well paced although I knew what was coming at the end. It's that wreck just ahead but you still want to see it.I did find the book to be pro J.P. Morgan so not too sure whether [...]

    15. If anyone doubts the value of a social anthropology PhD, then this book offers a great answer and rebuke. Tett, a financial journalist, had completed a PhD in anthropology and used those skills to understand the 'on the ground' culture of the bankers and financiers in the derivatives market. Tett probed a culture of extreme risk taking, excess and ridicule of regulators. Fascinating, she also probed the consequences of disconnecting finance capitalism - money exchange - from the people it is mea [...]

    16. It was interesting to read this dry, financial reporter's account after having read the Big Short. This one focuses on what the pros were doing. Big Short was what the idiots were doing. Main point of both books is that it was hard to tell the idiots from the pros so it fooled most everyone. In the end, caution won the day for JP Morgan, PNC and a few others. Sounds good to me.

    17. avadhutrecommends.wordpress/Summary –Fool’s Gold is a narrative expose’ of the financial crisis that walks us through the 15 year journey of the J P Morgan Investment bankers team instrumental in innovation of credit default swaps on corporate loans (CDS) and how the innovation led to its perversion resulting into the ultimate disaster.Review –Gillian Tett is an Assistant Editor at the Financial Times and one of the very few journalists who took interest in the credit market as early as [...]

    18. My 3rd book on the financial and economic crisis of 2008. This book starts very slow, going way back 20 years into the history of JP Morgan (Chase) bank. I felt Tett spent too much time on the history and then crammed the current events at the ending.And I didn't like the reader - Stephen Hoye. His british accent came and went seemingly at random instead of using voices for the different characters, especially women. I guess to Hoye all women sound British? One thing I did really like about Fool [...]

    19. In Fool's Gold, Gillian Tett, a reporter for the Financial Times, tells the story of how esoteric credit derivatives were developed and championed by a small group of independent thinkers at J. P. Morgan and how these derivatives came to ran amok among other banks causing the financial crisis from which we currently suffer. She details how a small close-knit group at J. P. Morgan developed and championed credit derivative swaps (CDS). J. P. Morgan was quite careful with these derivatives. It is [...]

    20. I don't often read books for work (I prefer to keep reading an enjoyable hobby) but every once in a while my love of reading and desire to learn more about the industry I work in collide. The reading of this book was the result of one such collision! I was in search of a book that described step by step the way in which the burgeoning credit derivatives industry of the late 1990s and early 2000s helped set the stage for the financial crisis of 2008. Tett is a journalist who educated herself in t [...]

    21. Not too bad, despite my strong misgivings over the breathless subtitle. This book is a short, casual history of the CDS and CDO market, particularly as seen through the eyes of the employees of JP Morgan. It reads like a piece of journalism; author Gillian Tett is a Financial Times columnist. In the play-by-play aspects is very good. Although she is sometimes given to over-dramatization, she definitely keeps things exciting and reports events like a seasoned pro. If you get a kick out of "adrena [...]

    22. Despite a couple of borderline hagiographical chapters (in the middle of the book) talking up some of the senior staff involved with J.P. Morgan, this book is truly riveting. Despite the rather over-egged title, the book is actually a case study of a company (J.P. Morgan) which was right there at the start of the process of financial innovation which later tipped into something uncontrollable. The author’s access to key figures in the crisis is somewhat fortuitous but she does seem to make the [...]

    23. Review of the financial crisis that concentrates on the role of CDSs based specifically around the team at JP Morgan which designed and evangelically sold them but who spotted two issues with their subsequent use (the limit on issuance due to the impossibility of insuring the super senior tranches at reasonable rates - they were later shocked to find other banks either not insuring the risk or shipping to SIVs with liquidity puts - and the impossibility of assessing tail correlation if they were [...]

    24. Gillian Tett, a reporter for the FT, lays out clearly in long monograph form what she has reported on for the past half-decade in the FT - the wild rise and cataclysmic fall of new-fangled credit derivatives, and all the obscure financial instruments related to them. These, along with mortgage backed securities, and the willingness of lenders in the US to loan on increasingly favorable terms, to increasingly risky homebuyers, fueled the massive growth of securities that nobody could really value [...]

    25. Well researched and written, the author shows a real understanding of the complexities of credit derivatives and many components that went into the GFC. I am not sure that the wording on front cover accurately reflects the content of the book.

    26. In 1994, J.P. Morgan, looking to create a market for credit derivatives, provided $4.8 billion of credit to Exxon and sold the credit risk to the European Bank of Reconstruction and Development. Thus, the modern Credit Default Swap was born. Gillian Tett's "Fool's Gold" traces the history of credit derivatives through the lives of the bankers at J.P. Morgan who created them and ends with their incredible destruction of financial markets in 2008."Fool's Gold" is divided in three parts entitled- I [...]

    27. "In later years, [J.P. Morgan derivatives head Peter] Hancock pushed his experimentation to unusual extremes. He hired a social anthropologist to study the corporate dynamics at the bank. He conducted firm-wide polls to ascertain which employees interacted most effectively with those from other departments, and then used that data as a benchmark for assessing employee compensation, plotting it on complex, color-coded computer models. He was convinced that departments needed to interact closely w [...]

    28. Far more balanced than its terrible UK cover suggests, I've been using this as my 'primer' for understanding some of the recent crash, and the wider financial world. It starts with the inception of Credit Default Swaps back in 1994 (at the marvellously named Boca Raton hotel, or 'Rat Mouth' if you prefer ;)) and runs up to Jan 2009. Despite being stuffed with all the acronyms and insider terminology you'd expect, Tett has a good way with language, and brings a humanising angle having met some of [...]

    29. Decent, but hardly essential. Since most of Tett's material is based on interviews with bank employees and insiders, J.P. Morgan tends to look better than it probably deserves; while it's impossible for Tett to ignore the bank's role in the crisis or its own massive losses, a lot of this is glossed over with quick subject changes to how much worse it was at some of the larger banks. Since I'm reading this a mere week after J.P. Morgan agreed to a $13 billion settlement for all kinds of shennanig [...]

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