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    Unavailable
    Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon
    Unavailable
    Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon
    Unavailable
    Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon
    Ebook442 pages7 hours

    Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon

    By Gretchen Morgenson and Joshua Rosner

    4/5

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    Currently unavailable

    About this ebook

    A Washington Post Notable Nonfiction Book for 2011
    One of The Economist's 2011 Books of the Year

    The New York Times's Pulitzer Prize-winning columnist reveals how the financial meltdown emerged from the toxic interplay of Washington, Wall Street, and corrupt mortgage lenders

    In Reckless Endangerment, Gretchen Morgenson, the star business columnist of The New York Times, exposes how the watchdogs who were supposed to protect the country from financial harm were actually complicit in the actions that finally blew up the American economy.

    Drawing on previously untapped sources and building on original research from coauthor Joshua Rosner—who himself raised early warnings with the public and investors, and kept detailed records—Morgenson connects the dots that led to this fiasco.

    Morgenson and Rosner draw back the curtain on Fannie Mae, the mortgage-finance giant that grew, with the support of the Clinton administration, through the 1990s, becoming a major opponent of government oversight even as it was benefiting from public subsidies. They expose the role played not only by Fannie Mae executives but also by enablers at Countrywide Financial, Goldman Sachs, the Federal Reserve, HUD, Congress, the FDIC, and the biggest players on Wall Street, to show how greed, aggression, and fear led countless officials to ignore warning signs of an imminent disaster.

    Character-rich and definitive in its analysis, this is the one account of the financial crisis you must read.

    LanguageEnglish
    PublisherMacmillan Publishers
    Release dateMay 24, 2011
    ISBN9781429965774
    Unavailable
    Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon
    Author

    Gretchen Morgenson

    Gretchen Morgenson is an assistant business and financial editor and a columnist at the New York Times, where she has covered the world financial markets since 1998 and won the Pulitzer Prize for her "trenchant and incisive" coverage of Wall Street. Having worked as a stockbroker at Dean Witter Reynolds in the early 1980s, Morgenson lends her reporting a depth of knowledge and skepticism uncommon in financial journalism.

    Read more from Gretchen Morgenson

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    Reviews for Reckless Endangerment

    4/5

    51 ratings4 reviews

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    • 5/5
      A very readable account of the lead up to the housing bubble and 2007 mortgage melt down that led to the 2008 collapse of the financial markets. The sad thing is that so many of the individuals involved/responsible for the fiasco are still in positions of power. One of the few books about the crisis that goes back to its origins and names names.
    • 4/5
      This is a quality account of how the 2008 market collapse occurred and demonstrates, without question, that our government is unable to protect it's people. There are multiple instances laid out in the book where well intentioned politicians tried to enact legislation to protect the population from sub-prime predators, only to be carefully eviscerated by lobbyists and the people who know people in higher places. It's truly amazing to see how economic bubbles continue to rise and be defended by our most powerful politicians (who know nothing of economics) with a standard belief that "this time, it's different."

      I came to this book from an article in the Wall Street Journal. If you plan to read this, you should also purchase a copy of The Wall Street Money Machine as that presents additional information on this topic.

    • 5/5
      Just when I thought there was nothing more I needed to know about the 2008 financial meltdown, I read Reckless Endangerment. Although there are plenty of bad apples in this book, the main baddie is probably James Johnson, the former CEO of Federal National Mortgage Association, affectionately (or not) known as Fannie Mae. I remember with no fondness the night I learned about the US government’s taking over the reins at Fannie Mae (and Freddie Mac, its sibling company) during the financial crisis. My first thought was, “this can’t be a good thing,” and it gave me a sick feeling in the pit of my stomach. Fannie and Freddie are government-sponsored enterprises (GSEs), even though they are publicly traded companies. For years and years, both entities took advantage of a widely shared perception that if they got in too much trouble the government would bail them out, while denying that vociferously. They had plenty of other advantages over other publicly traded companies – and their executives used them to enrich themselves, while spinning tales that they were operating in the best interest of the country and the people they helped buy a piece of American dream—their own homes. Well, we know how that worked out. Why we didn’t see Mr. Johnson and some of his cronies doing a “perp walk” on national television I’ll never understand.Heroes are few and far between in Reckless Endangerment and what’s particularly maddening is that most of those the villains made out like bandits while the little guys took it in the shorts. It’s easy to see why the Occupy Wall Street protestors are so pissed off. Readers will appreciate the irony that the re-regulation of Wall Street banks comes under the Dodd-Frank Act – when Messrs Dodd and Frank were both relentless defenders of Fannie and Freddie until they weren’t. This is an ugly story, beautifully told.
    • 4/5
      For anyone puzzling over where blame lies for the financial meltdown of the late summer of 2008, this is a book to read. The answer might be surprising. Gretchen Morgenson, the principal author, is a business and financial editor and a columnist for The New York Times. The book is a detailed account of what, who, how, and why behind the financial meltdown which nearly plunged the country into a second great depression in the waning days of the George W. Bush presidency. The general assumption of many, especially partisans with no love for President Bush, is that because it happened toward the end of his eight year presidency his policies must have been at fault. President Obama rarely lets a week go by without blaming the current economic problems on President Bush, or only slightly more subtly, “the situation which we inherited.” Yet the problem runs far deeper than blame of the Republican administration during which it occurred.The 2008 financial crisis can be traced directly to the early years of the presidency of Bill Clinton. President Clinton in 1994 proclaimed the need for more Americans to be homeowners. He set the goal of 70% of the populace living in homes they own. He relentlessly pursued that policy by causing his young secretary of Housing and Urban Development, Andrew Cuomo, to have his bureaucracy issue regulations which encouraged banks and other lending institutions to drop the standards for home mortgages. That included a virtual elimination of the 20% down payment which homeowners needed to qualify for a mortgage, and the age old wisdom enshrined in the banking industry that the homeowner’s monthly mortgage payment should not exceed 25% of his take home pay. With a few regulation changes, and accusations that banks were engaging in “redlining” discrimination against inner city neighborhoods, the nation’s traditional banks were quickly persuaded to make mortgage loans which a few years earlier would have resulted in a quick mortgage rejection letter. New lenders came to prominence such as Countrywide Financial, United Companies Financial, NovaStar, and Fremont Investment & Loan. They made billions of dollars on these newly minted mortgages to borrowers who traditionally could not have gotten a mortgage to buy a house. Bankers called the good mortgage prospects, prime candidates. This new class of borrowers became known as sub-prime. These sub-prime mortgages were issued by the lenders and then sold in huge blocks to Fannie Mae and Freddie Mac. These two private corporations are “government-sponsored enterprises,” meaning that they were in 1994 private corporations, but ones which the public largely perceived to be guaranteed by the full faith and credit of the United States government. During the Clinton years Fannie Mae, the larger of the two, was run by James A. Johnson. Johnson successfully lobbied congress to see that his agency was never effectively regulated. Johnson and the executives of his organization and the lenders made millions each year in salaries and bonuses. But Fannie Mae and the many lenders which sold their mortgages to Fannie Mae were undercapitalized. They made risky loans to people who could not afford them. When these sub-prime homeowners started defaulting in large numbers, the whole house of cards came down, and voila, the financial crisis of 2008. Most of those lenders are now in bankruptcy and Fannie Mae and Freddy Mac are now under government control and bailout. Johnson and his fellow executives got off while the American taxpayers pay the bills. While all of this was unfolding the congress, mostly run by the Democrats, was asleep at the switch. Senate Finance Committee Chairman Christopher Dodd, Democrat from Connecticut, and House Financial Services Chairman Barney Frank, Democrat from Massachusetts are mentioned prominently in this book as being cosy with Johnson and Fannie Mae. Perhaps the ultimate insult added to injury is when these two powerful Democrats devised the congressional response to the crisis. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to supposedly insure that such a financial crisis could never happed again. But the new law, despite its massive size and scope, utterly failed to address the to-big-to fail institutions such as Fannie Mae. The law did nothing to increase accountability of those running these huge financial institution, nor did it even address the issues of how to resolve the insolvent Fannie and Freddy situation. When such behemoth unmanageable financial institutions get in trouble in the future, the government (meaning the taxpayers) will have no alternative but to again bail them out, or alternatively to let them fail and then face national financial collapse as we did in the summer of 2008.If one expects partisan reasons given from the left side of the political spectrum from this New York Times reporter, they will be greatly disappointed by this book. As for many of the cast of characters who were responsible for allowing all of this to happen on their watch, many are in the Obama Administration or with close ties to the current president. So much for the penchant of the current administration to blame today’s financial problems on “the situation which we inherited.” To a great degree, the people who allowed the current mess to happen on their watch are now serving in the current administration.