Book Review: 'Too Big to Fail' by Andrew Ross Sorkin

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 |  Includes: AIG, BAC, BCS, C, GS, JPM, LEH, LEHMQ, MS, WFC, XLF
by: Jacob Wolinsky

This is my sixth book review on a series of books on the financial crisis. To see my previous reviews check out my previous articles. The book this time is Too Big to Fail by Andrew Ross Sorkin (Viking, 2009), a financial columnist for the New York Times. After reading the book, I am not surprised the book has become a best seller.

Too Big to Fail gives an extremely comprehensive account of the events that begin with the collapse of Bear Sterns, and end around the time TARP is passed. The author does an excellent job of providing a brief history of many of the characters who played a major role in the events surrounding the collapse of the financial system, including well known figures like Ben Bernanke, Henry Paulson, Tim Geithner, Lloyd Blankenfein, Jamie Dimon, John Mack and Ken Lewis. The author also provides some background on those who played a major in the crisis but are less known to the public, including John Varley (CEO Barclays), Walid Chammah (President Morgan Stanley) and Steven Black (Head, Investment Bank JP Morgan).

I normally like to list something new I learned from reading a book, but with Too Big to Fail there are so many new facts I cannot begin to know where to start. As someone who followed the events surrounding the collapse of Lehman Brothers and subsequent news coverage since, I thought I had read everything. However, I learned so many details from the book that I never picked up in the financial news. Some of these new facts I learned were numerous mergers that Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C) and Wachovia tried to pursue after the collapse of Lehman Brothers.

There will be people who will be disappointed by this book. Henry Paulson is painted in a very positive light by the author. (We will soon get the story from Paulson’s side, as he is releasing a book on his perspective of the financial crisis that I will be reviewing in the coming weeks). Even Dick Fuld is portrayed as someone who was trying his best to save his firm. The author also rejects the popular conspiracy theories about Goldman Sachs bringing down other firms or controlling the Government. The only evidence of this are unsubstantiated rumors by Fuld that David Einhorn, other short sellers and Goldman Sachs were spreading rumors to bring down Lehman Brothers. This may disappoint people who do not like Henry Paulson, Goldman Sachs or Dick Fuld, though the author is most critical toward Sheila Bair, Christopher Cox, Vikram Pandit and Charles Gasparino (CNBC)

However, regardless of what one’s opinions are of Goldman Sachs or the former Treasury Secretary and Former CEO of Lehman Brothers, the book is a masterpiece. The author does an excellent job of explaining in detail what really happened in the several weeks in September and October 2008 when it appeared the financial system was on the verge of collapse. One cannot ask for more detail as the author devotes over 200 pages towards this critical time period alone. Sorkin clearly had extensive access to many of the key people in the book. The book is entertaining and could be enjoyed by someone with or without a degree in finance.

To purchase this book on Amazon click here.

For anyone following my series of book reviews on the financial crisis my next book will be 'More Mortgage Meltdown' by Whitney Tilson or 'This Time is Different' by Kenneth Rogoff.

Disclosure: New FTC guidelines require me to disclose I have a material connection because I received a free copy of the book to review.