Fool's Gold

With the worst of the credit crisis behind us, journalists continue to work to explain to Joe Public what went wrong. Gillian Tett of the UK's FINANCIAL TIMES has made a fine contribution with her account of J.P. Morgan's, mostly unwitting, role in the disaster. Stephen Hoye deftly navigates a text filled with finance jargon and acronyms, and by the end listeners may understand more about CDOs, CDSs and SIVs than the bankers who bought them. Hoye's decision to use accents--always dubious when reading a work of journalism--is regrettable, but this is a quibble as there's little dialogue in the text. And one has to admit--his Bronx accent is not too bad. D.B. (c) AudioFile 2009, Portland, Maine

Starred review from May 4, 2009
At once a gripping narrative, an education in derivatives, and a most lucid origin-story for the current financial meltdown, it's no surprise the author of this volume is an award-winning Financial Times journalist. Taking readers back to the invention of credit-derivative obligations (CDOs) at J. P. Morgan in 1994, and the subsequent exponential growth of that market, Tett (Saving the Sun) deploys a remarkable sense of pacing, generating real suspense over rapidly inflating debt on bank balance sheets; by the time Lehman Brothers fails, the book has become a bonafide page-turner. Tett explains how credit derivatives seemed a win-win for the financial world, freeing up capital, increasing profits, and diversifying risk, but makes the missteps equally clear as the industry hurtles toward a largely-unforeseen wave of loan defaults (the worst since the Great Depression). Interestingly, J.P. Morgan was one of a handful of banks sufficiently prescient to imagine this "perfect storm" of simultaneous defaults, and so never became over-reliant on CDOs. Ignoring the tacked-on, preachy epilogue (in which Tett advocates her specialty, social anthropology, as a way to avert future such crises), Tett's explosive, illuminating narrative is the one to read for anyone confused by the present financial mess.