"Confidence Men" by Ron Suskind

Discussion in 'Reviews' started by Mustang, Jul 3, 2012.

  1. Mustang
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    Mustang Gold Member

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    The full title is:

    "Confidence Men: Wall Street, Washington, and the Education of a President"[FONT=Arial, Helvetica, sans-serif] by Ron Suskind


    This is Pulitzer Prize-winner, Suskind's latest book. The beginning of the book starts about a year before the financial meltdown and progresses through to the election of President Obama and his first 2 years in office. It details both the financial market collapse, the gov't response to it, as well as the push for health insurance reform (which originally started out as health care cost reform).

    The book includes quite a few insights into the workings of Wall St, the Obama WH, and Congress, and, of course, the powerful men and women who essentially run the country behind the scenes.

    It's not a stodgy, facts-only oriented book. In fact, it's written in story form, almost like a novel. I enjoyed the book because I learned a lot about the behind the scenes interpersonal relationships of the people involved, as well as many facts about the financial crisis I didn't know.

    For example, Obama had a heads up warning that the financial system was in trouble back in 2007 because he was friends with UBS-America president, Robert Wolf, who had access to people and information about derivatives and how out of control they were.

    Another thing I didn't know is one of the ways that American banks came back into profitability so quickly even though they were famously not loaning money again. Do you know what they did? They used essentially free gov't money to buy T-bills which paid an interest rate of about 3%. Imagine that! They brought down the economy. Then the gov't (the taxpayers) bail them out. Then they use taxpayer money to increase their earnings at taxpayers' expense. It boggles the mind.

    If that doesn't bother you, think about this. Many of the same practices that got our economy into this mess, are still going on, unabated. What's happening now with J. P. Morgan/Chase and their financial trading losses, first reported to be $2 Billion and now est. to be around $9 Billion, should be evidence that's true.

    I supposed I should include a couple of caveats about the book. They're not reasons to not read the book. They're just a couple of annoyances and a heads up about a possible problem.

    One annoyance is that the book was not a linear narrative. As such, the story shifted in time, and it wasn't always clear as to the date. As an example, sometimes the principals were remembering an earlier time in their lives. Another mild annoyance is the fact that stories would temporarily end in favor of another story arc, and they would reappear later, sometimes far later. It would have been helpful if their titles of the principals would have again been mentioned.

    A possible problem is that there isn't any attribution in the book. There are several times in the book that you would read about a conversation that only happened between two people, including President Obama and another person (President Obama was interviewed for the book). So, one criticism of the book might be that, without attribution, it's not completely clear if the recounted conversations aren't somehow self-serving to whomever the source was.

    And just in case anyone is worried that this book is a love fest of the president and the entire administration team, I can assure everyone that it is not.

    The people who emerge as the real bright spots and real heroes in the book are fairly unknown to the general public. One that stands out in my mind is Commodity Futures Trading Commission Chairman, Gary Gensler.

    Given the fact that the ACA has just passed a constitutional test in the US Supreme Court, this is a good book to get some insight into how the ACA was crafted in the first place.

    528 pages. Published Sept 2011
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  2. g5000
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    g5000 Diamond Member

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    Thank you, Mustang.

    And yeah, that deal with borrowing from the Fed and then buying Treasuries is what is called a "carry trade". That's exactly how the banks bounced back.

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