Bailout Nation, with New Post-Crisis Update: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy

Amazon Review

Long story short: After Bill Fleckenstein’s GREENSPAN’S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE McGraw Hill asked him to do a follow up to that book. He (wisely) said no.

However, Bill suggested they contact me.

Which the publisher did. I turned them down (several times). Who had time to write a book? Besides, I did not want to do a fast rush-to-judgment type of thing. But they were tenacious in their pursuit, and I eventually succumbed to their flattery — but on my terms, including having final edit on the manuscript. (This becomes important later on, as you will soon see).

Because of the way events played out, I ended up writing three separate Bailout Nation books over the next 15 months. The first version was a history of bailouts. This overview covered an arc from Lockheed (1971) to Bear Stearns (March 2008). Around the time this book was due (~Labor Day 2008), something was in the air . . . you could smell the leading edge of the approaching storm. I convinced the publisher to hold off a few weeks.

Boom! Fannie Mae blew up. Then Freddie Mac, Lehman Brothers, AIG, Citigroup, Bank of America. Soon Merrill was on the ropes, followed by Morgan Stanley, Goldman Sachs, GM and GE. All hell was breaking loose. Well, I thought, at least I had an ending. The expanded version of the manuscript, with greater emphasis on the latter part of 2008, was finished in December ‘08.

Or so I thought.

After I handed the book into the publisher (McGraw Hill), they let me know they had problems with my assessment of the Ratings Agencies. They were unhappy with my calling them “Pimps & Hos”, or describing their business model of rating junk bonds as AAA for big fees as “Payola.” (What would you call it?)

Not coincidentally, McGraw Hill owns of the largest Rating Agencies, Standard & Poor’s.

The compromise was to remove the reference to Pimps, but using publicly available data and congressional testimony, to add more detailed analysis and quotations from experts. When it was finished, I found the revised section to be much more even handed — and far more devastating — to S&P. They (along with fellow rating agencies Moody’s and Fitch’s) were key enablers to the entire crisis. There were many other guilty parties, but I simply could not under-emphasize the ratings agencies.

When McGH rejected it again, I exercised my right to buy the manuscript back from them in January 2009. Numerous publishers were interested, but I went with Wiley — they have a great deal of experience publishing business/investing related books, and as a publisher, had no conflicts of interest that would interfere with telling the full story.

The third version was the charm.

By this time, the amount of bailout money going to mismanaged companies, reckless speculators, and incompetent corporate executives had skyrocketed to 14 trillion dollars. This was infuriating to anyone paying attention.

Astonishing things happened as the book progresses. The more I researched and wrote, the more it was apparent we were witnessing the greatest heist ever made. By the last section of the book, history’s biggest transfer of wealth — from the taxpayer to the Banksters — was taking place. Trillions were being shifted from the responsible to the reckless, from the prudent to the incompetent. It was infuriating — and you will see as the book progresses my initial academic tone gets replaced with greater snark and anger.

I not only had my ending, I had a new cause — exposing those who caused this mess, be they Democrat or Republican, Corporate CEO or derivatives trader. I hope the end result is something that will inform and illuminate, while entertaining you along the way . . .

Rating: 5 / 5

Mr Ritholtz does an excellent job drawing a trendline from the first bailout in 70’s to the latest bailouts of 2009. He illustrates how our own government cheer-led us into the Next Great Depression.

What makes this book different from books of other numerous authors?

* The book is written in a plain language an average person can understand

* The book is well-structured and sticks to historical events which led us into the mess

* For all government bailouts, Mr Ritholtz brings focus to their long-term effects rather than short-term ones

* Mr Ritholtz does not try to predict future or give investment advice (thank you)

* Illustrations are hilariously funny

I enjoyed every page, it is very well worth time and money.

Rating: 5 / 5

It has been said that ‘if you can’t explain something in simple terms that anyone can understand, you don’t understand it well enough yourself.’ From the standpoint of that axiom, it is clear that Barry Ritholtz understands well the causes of the Great Financial Crisis of 2008. In plain terms, Ritholtz explains not only what directly led to the Crisis, but the events of the last 30 years which laid the groundwork of moral hazard which allowed the Crisis to occur as it did. Indeed, the events of the last two years were the result of a confluence of things gone wrong, and all sides of the political aisle are culpable, which Ritholtz makes clear in Bailout Nation.

If you are looking for a clear, concise, bias-free explanation in layman’s terms of the Financial Crisis and, most importantly, the myriad events which led up to it, then you should read this book. Actually, I think that EVERYONE should read this book, because if the warnings implicit in the book are not heeded very soon, the US will find itself in a situation that will be impossible to recover from intact. Indeed, we may already be there…
Rating: 5 / 5

I will admit I am an outsider to the financial world. However Bailout Nation clarified current financial issues into a format that was hilarious and easy to follow. I am an avid reader of Barry Ritholtz’s blog “The Big Picture,” and this book showcases his ability to streamline all the best sources out there in a very comprehensive yet succinct manner. The clever artwork on the cover and between chapters proves very entertaining. I also enjoyed the section towards the end in which Ritholtz’s respected contemporaries offered advice to President Obama.

Rating: 5 / 5

Barry Ritholtz was a contrarian when it wasn’t cool. He called it early and called it right. Now he deserves the praise that this great book is earning. We need more cool-headed analysts like Barry.
Rating: 5 / 5