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Crash of the Titans - review

Crash of the Titans by Greg Farrell dives into the people who ran Merrill Lynch and Bank of America in the crash of 2008.

The three main characters are Ken Lewis (BoA), Stanley O'Neal (Merrill), and John Thain (Goldman, NYSE, Merrill, BoA). It gives us fascinating background on all three, going back to their early days. However the detailed story begins in the early 00s, around the time O'Neal hired Osman Semerci to run something called 'fixed income'. Farrell takes us through this time, when Semerci almost singlehandedly plunges Merrill into the real estate market at the height of the bubble, through O'Neals firing, Thains hiring, his flailing efforts to save the bank, and it's sale to Ken Lewis, whose dream of defeating the New York banks at their own game leaves him frazzled to the point of retiring.

Where Ferrell really shines is the emotional snapshots of the characters, for example his descriptions of Fleming, worn out and devastated, are imho somewhat moving. This is the accomplishment of the book, to humanize these people, and to help us understand what happened. Not that I want to give any of them my tax money, but at least I have an inkling of where they were coming from; a knowledge essential to those who try not to repeat history.

In fact this is what made the book hard to get through. It is well written and edited, and for the most part flows very well, perhaps not rushed-out-the-door like some other Crash books (Ahem, The Sellout, by Charles Gasparino, excellent but full of grammatical "innovations"). But the emotional devastation, the wasteland of broken dreams, the mass firings by cold, unemotional mechanisms is hurting. It reminds me of the feeling one gets watching 'In The Air Up There', with George Clooney and Anna Kendrick walking into these half-emptied offices, cubicles ripped from the floor, skeleton crews standing around. If you have gone through this sort of thing at your workplace, it might remind you of some unpleasant times and some unfair treatments meted out for no apparent reason.

The scenes where one person's thoughts are described are fascinating... especially the cultural clashes. We have BoA, who views Investment bankers as too focused on bonuses, and New Yorkers who view the BoA guys as a top-down culture reminiscent of the military. And also as 'hillbillies', a sad phrase to be used by supposedly enlightened, educated dudes. But we also have the 'Mother Merrill' culture vs O'Neal, but also against Goldman Culture when Thain comes in. It is eminently worthwhile to read, if you are interested in this sort of thing.

I had difficulty getting through some of the more intricate passages, getting lost in the names. I have come to understand this as a sort of 'geekery of the human relationship web'. The complicated, intricate nature of the relationships at the top of a big bank like Merrill or BoA is as complicated as a diagram explaining a Synthetic CDO. In this it is reminiscent of William Cohan's writing about Bear Stearns or Lazard. Very interesting, but sometimes hard to wrap one's head around.

Finally, Farrell mercifully does not lambast us with 20+ pages of his prescriptions for a cure. He has instead focused tightly on trying to discover the psychological and social reasons that the system failed. He has given us a sort of cultural understanding of this corner of the financial industry. Farrell points out that the angry lawsuits that came out of Enron and Arthuer Anderson mostly failed in a court of law. The reader's mind may also wander to Sarbanes Oxley, and how they failed as well. Thus, our lack of comprehension is as damaging as a lack of action, when it comes to our oversight of the financial system.

The book has literary quality. You will watch these stars, hot shots, masters of the universe, the titans Thain, Lewis, and O'Neal, walk away battered, bruised, and wrenched, (but all still rich). If you want to understand the human aspect of the story, you would probably find value in Crash of the Titans.

Weirdest fact:

When Stan O'Neal found out his company was full of worthless toxic assets, he immediately tried to sell it to another bank (although without consulting his board first). His board fired him for this, and then hired John Thain to save the company. John Thain wound up doing exactly the same thing O'Neal wanted to do, selling the company, just a year later and at the last minute in a shotgun wedding.

who the heck is don regan?

timmy: hell i dunno, he wasnt mentioned in wikipedia

johnny: oh.. great. now i got a D on my report about Merrill Lynch

timmy: sucks to be you

johnny: im gonna sue that jimbo wales, and his silly smirking face

timmy: you cant he didnt write it

johnny: but he pays people to write stuff

timmy: no, he doesnt

johnny: so how does it have a listing of like every episode of Naruto ever, but not include this guy who was so important in 20th century history, according to my lameo professor?

timmy: uhm i hate to tell you this but,, hollywood pays people to edit wikipedia articles about pop culture

johnny: so why doesnt merril lynch pay anyone to write about them?

timmy: they might,, just look at the article on life settlements ..

johnny: but that article is total crap, pure PR bull****!

timmy: yes, it would appear to be so

johnny: so youre saying that wikipedia wont ever pay anyone to write an article, but it has no problem allowing a bunch of PR flacks to pollute it with garbage?

timmy: well, if they did pay people, it would make them editors, and the shield law might come into question...

johnny: which would mean lawsuits ...

timmy: which means more legal fees...

johnny: which would mean more smirking jimmy banners..

timmy: yeah. so basically, no. do your own research. or wait till some bored 20 year old with nothing better to do decides to add a section about Don Regan to the ML article.

johnny: argh! curse you wales, curse you!