New York’s financiers are enjoying seeing their names in print, says Rob Cox, if the glamorous launches for books on the 2008 crisis are to be believed
LAST FALL BROUGHT the financial panic. This fall brings the season of mending reputations on Wall Street. Every banker and heavyweight of finance involved even peripherally in the credit crisis has made an effort to help correct the historical record. Indeed nary a week passed between September and the Thanksgiving holiday without a book party filling up the Outlook calendars of the financial industry’s titans.
Given the vast amounts of wealth that vanished over the preceding twelve months — and the ten per cent unemployment afflicting the nation — one might expect these occasions to be dirge-like affairs. Journalists would present their indictments of the monied class, and the big players themselves would use their memoirs to lament the great many mistakes they and their colleagues made in fanning the credit bubble and then attempting to put out the fires that succeeded it. But that’s not the way Wall Street is celebrating the anniversary of chaos that followed from the bankruptcy of Lehman Brothers.
On the contrary, the financial industry and its chroniclers in the fourth estate are rather partying like it’s, er, September 2006. Take the book launch of Too Big to Fail (BUY IT HERE) — the most celebrated tell-all yet to sprout from the crisis, written by New York Times mergers reporter Andrew Ross Sorkin. Graydon Carter, Vanity Fair’s editor, threw the party at the Monkey Bar, his storied midtown bar and dining establishment. Jamie Dimon, the CEO of JP Morgan Chase, walked triumphantly in among the earlier crowd, a not-so-subtle hint at his bank’s victorious emergence from the crisis.
His rival at Morgan Stanley, John Mack, was there — as were his top dogs Colm Kelleher, the chief financial officer; Paul Taubman, the M&A maestro; and Tom Nides, the firm’s top link to the powers that be in Washington. The hedge-fund and private-equity brigade was represented by Citadel’s Ken Griffin and Carlyle’s David Rubenstein. Warren Buffett could not make it but sent along a six-foot long facsimile of a telegram. And the crowd extended beyond Wall Street — also present was Brian Grazer, the spiky-haired Hollywood producer.
Moreover, Sorkin’s party was hardly atypical. Just a few weeks later the Monkey Bar played host to another soiree, this time for hedge-fund manager Bob Sloan’s defence of those who would bet against stocks, Don’t Blame the Shorts (BUY IT HERE). Normally a book like Sloan’s — given its ‘inside-baseball, talk your own book’ character — would struggle to fill a telephone booth, much less the Monkey Bar.
But, once again, a who’s who of the financial industry came out in force, from the banking analyst who predicted the meltdown, Meredith Whitney (and her professional wrestling hubby) to James Chanos, the bearish hedge-fund manager who also correctly called Enron’s demise in a previous market dislocation.
As with Sorkin’s book party, it was hard not to see the attendee list as something like a three-dimensional version of the author’s source list. And that gets to the heart of the matter —one year on from the crisis, Wall Street’s heavy hitters are spinning like mad. The reason is very simple: they are out to make sure their roles are recorded positively for posterity.
As Paulson’s chief of staff remarks in Sorkin’s book when the government is bailing out American International Group: ‘This would be extremely interesting from an analytical perspective if it wasn’t happening to us.’ Well, that point is moot. And while it’s an occasion for analysis, it’s also one for celebration — not just survival, but the return of the big bonus and burgeoning profits.
Of course, the continuing absence of a handful of the crisis’s most important figures has not gone unnoticed. Where has Hank Paulson been? The former Secretary of the Treasury and Goldman Sachs chief executive is a central figure in nearly every record of the events that transpired last year.
Much has been written about his role — and much of it in unflattering tones in relation to the government’s series of bailouts of American financial institutions. While Paulson doesn’t come across as mean or dimwitted in tomes like Sorkin’s, he certainly appears to have flown by the seat of his pants.
True, many of the details from tick-tocks like Sorkin’s and The Sellout (BUY IT HERE), a rival book from Charles Gasparino, the CNBC commentator, feel as if they’ve been massaged by some access to Paulson. But Paulson, too, will have his chance to set the record straight when his memoirs are published next year. Others, who have up until now been too bunker-bound or lawyer-encumbered to give their side of the picture, will have their chances too.
Lehman’s former chairman and chief executive Richard Fuld will almost certainly want to put his spin on the events that led to his firm’s collapse. Ken Lewis, the embattled chief executive of Bank of America, can be expected to follow. Happy holidays!
You can buy all the books mentioned here, as well as in the rest of Issue 14 and all other issues, in the Spear’s/Amazon store
Illustration by Giovanni Da Re