pdf Crashed: How a Decade of Financial Crises Changed the World Author Adam Tooze – Intimatenights.co.uk

Crashed: How a Decade of Financial Crises Changed the World Unlike the other two reviews that this follows, my review is of the book rather than other issues.The book is an incredibly good attempt at a contemporary history of the financial crisis and develops a style and approach common in Dr Tooze s other works This is not about trying to justify one position or another if you want emotional and politically laden account look elsewhere This is a work of history and much the stronger for it.Whilst I am sure that many will look to criticise what is not included, the history of the financial crisis is a history of our contemporary economy and our desire to try and beat our own nature The book is systematic and avoids being overly political in approach whilst highlighting the political and economic impacts which have shaped our world for over a decade.This is simply good history well researched, well written and based on a clear set of opinions it will not confirm your own theories or prejudices but will make you think again about a compelling period in our recent history. Winner of theLionel Gelber Prize Majestic, informative and often delightful insights on every page Yanis Varoufakis, ObserverThe definitive history of the Great Financial Crisis, from the acclaimed author of The Deluge and The Wages of Destruction In Septemberthe Great Financial Crisis, triggered by the collapse of Lehman brothers, shook the world A decade later its spectre still haunts us As the appalling scope and scale of the crash was revealed, the financial institutions that had symbolised the West s triumph since the end of the Cold War, seemed through greed, malice and incompetence to be about to bring the entire system to its knees Crashed is a brilliantly original and assured analysis of what happened and how we were rescued from something even worse but at a price which continues to undermine democracy across Europe and the United States Gnawing away at our institutions are the many billions of dollars which were conjured up to prevent complete collapse Over and over again, the end of the crisis has been announced, but it continues to hound us whether in Greece or Ukraine, whether through Brexit or Trump Adam Tooze follows the trail like no previous writer and has written a book compelling as history, as economic analysis and as political horror story This is an economic history, which distinguishes itself from most other books about the GFC and the EU crisis by placing events in a broader geopolitical and historical context And what a fascinating, superbly written and eye opening read it is I don t think it s entirely impartial the author is not shy about being judgemental and I sense that as he shares my own liberal sensibilities we might both be guilty of missing some useful perspectives But I highly recommend it, as a deeply researched analysis of how global politics and finance intersect, a beautifully marshalled series of complex arguments and a totally engrossing read. Da leggere e rileggere, un opera eccezionale, di grandissimo livello storico e documentale. Crashed has been timed to coincide with the ten year anniversary of the financial crisis of 2008.Most books about the crisis have been written by1 protagonists with a record to defend, such as Hank Paulson, Tim Geithner, Ben Bernanke, Neil Barofsky, Mervyn King, Adair Turner and Paul Tucker2 economists who watched from the sidelines, such as Joseph Stiglitz, Paul Krugman, Bob Shiller, Atif Mian not only that, but they were massive holders of BTp and Bono junk, hence the sudden stop, hence MF Global, hence the LTRO he fails to mention most of this, let alone make the connections on p 241, I came across the following gem Everyone wanted safety Treasury prices were rising, yields soaring, so too was the dollar It does not work that way, does it And yet, he s written a book that s well worth reading, for the following three reasons 1 He makes a decent fist of looking at the crisis globally US, Europe, EM, China and Russia2 He s not afraid to make some very strong judgements that go against the grain3 He lays it all out so well that even if you disagree with his conclusions, by dint of having read his book you will be transported to a place you could not have reached on your own.His first controversial insight is that the crisis caught the great and the good napping The Stephen Roaches of our world could not get enough of telling us about the dangers lurking in the Chimerica structure s imbalances and our leaders from Larry Summers to a young Illinois senator called Barack Obama could not get enough of telling the US to borrow less and the Chinese to spend , when of course the danger was lurking at home.His second controversial insight is that Paulson 1 made an explicit choice to look principled and teach everybody a lesson and let Lehman go, 2 was driven to this decision by a miscalculation regarding the impact the Lehman bankruptcy would have and 3 was quick to reverse gears and go down on his knees and ask Congress for the necessary funds to clean up his mess after he realized he d miscalculated.Three cheers for Adam Tooze His third controversial insight is that the biggest financial mess was in Europe, rather than the US The boldest and stupidest trade of all bold and stupid trades entailed the cr me de la cr me of the European banking establishment holding trillions of dollar denominated questionable US assets, which they funded by issuing short term dollar liabilities He calls out Steinbrueck and Sarkozy for being showboaters and liars in calling the crisis American, basically, and pays tribute to the Fed that stepped in with gigantic dollar swap lines to the ECB and the SNB, who covertly passed on literally unfeasible amounts of funding to the BNPs, Deutsches and UBSs of this world.On the other hand, you distinctly get the impression that somebody told all this to Adam Tooze, that he did not dig it out on his own His deep throat has left out some big stuff.So nobody seems to have informed the author that a trillion dollar swapline is three orders of magnitude smaller than the quadrillion dollars of derivatives that s a million billion dollars of derivatives for those sitting in the back that the authorities could have wiped out by going Swedish on the banking system and thereby making all those arrows start and end in the same place He talks about how the banks were forced to beg for billions and how that was all for show because the losses were in the single digit trillions, but somebody should show him the 100 odd trillion with a T of derivatives each of Bank of America Merrill Lynch, Barclays etc had on their books that nobody did anything to remove when there was a genuine opportunity to do so.Nobody other than the Swiss, that is again, nobody seems to have informed the author that the SNB found an amazing way to shrink UBS and CSFB they quite simply told them any amount you re up on a derivative you now need to treat as an asset and any amount you re down you need to treat as a liability And that was that Until last year there were fantastic jobs to be had killing the derivatives books of those behemoths Deutsche, on the other hand, is still very much in the news The author does seem to comprehend that a hero in year 2005 was not a guy who had funds, but a guy who could source product However, Tooze cannot connect the dots too well from there 1 He somehow gets it into his head that your objective as a maker of CDO is to seek crappy product, in order to maximize the difference between what the meat s worth and what you sell the sausage for No, not really all you want is to charge the borrower the rate that you charge to crappy borrowers, but you don t care at all if he s a good borrower or not If it turns out he can pay, that s a small bonus, actually Indeed, some of the biggest fraud perpetrated was against African Americans who were high credit borrowers but were pushed into costlier subprime anyway.2 More importantly, the biggest implication of this fact is that it was incumbent upon America to police the creation of assets and that this was something the US singularly failed to accomplish Steinbrueck and Sarkozy were not all that off piste to say the crisis of their banks was American in origin The US is where the lax lending rules were to be found.Much as I m ecstatic that the current go to book about the crisis boldly states that Paulson was a hypocrite, basically, the author gets a B from me on all his revelations He isn t knowledgeable enough, bottom line Sorry Fortunately, his account is not the biggest contribution From reading Crashed I took away two big messages one intended by the author and one probably unintended The first message Adam Tooze managed to hammer into my head is that, once they had picked up their socks and dusted themselves off following the Lehman bankruptcy, to use Obama s parlance the American authorities, from the President, the Fed and the Treasury all the way to the courts and the diplomatic service, resolved to fully restore the status quo no bankruptcies anywhere, ever became the mantra and the entire might of the state was put behind that goal No banking bankruptcies, US or otherwise No losses to Chinese investors in bad American paper No losses to anybody else who holds paper either bondholders rights trump homeowners No European Government defaults No Grexit No breaking of ranks even on the method you, the rest of the world, had better also printTooze does not argue that this was some type of plan When you read his account, rather, you understand that there s no turning back from Shock and Awe So there wasn t one You look at it that way and you understand there was no way the subprime borrower was ever going to get any help to stay in his home The moment his money was pledged to the Chinese, his goose was cooked Similarly, and Tooze says this explicitly, my country s government was never going to default to the French and German banks that held its paper, because the system came first I ve always blamed Trichet for this, but with the wisdom I ve now acquired I must now acknowledge he was but a first line of defense And that the hegemon pushing this agenda was indeed the US, with Obama himself putting in the important phone calls.The second major takeaway I took from reading Crashed is a dividend of its universal approach to setting the scene The author takes you on a tour of the US, Europe, Eastern Europe, China and Russia And you sit down, you do the graph and you come to a realization a single country is connected to every node of the graph The ECB was set up on the model of the Bundesbank German banks were up to their gills in American paper German investors of all stripes were up to their gills in BTp, Bono and GGB paper German industry had set up production across Poland and Hungary and the Czech Republic The former German Chancellor sits on the board of the Russian gas pipeline The current German Chancellor traded blows with Putin in their days in East Berlin Germany is by some margin the biggest exporter to ChinaI don t know why I d never made all those connections So Angela Merkel is a villain in this book, but not at all from my angle The way I see it, under Angela Merkel German Landesbanken were forced to sell all their mortgage junk right away German investors, uniquely among their European peers, were forced to hold on to their GGBs till the bitter end, in a show of solidarity they never got any credit for The BuBa and the Laender were browbeaten into passing on banking supervision to the ECB Germany accepted refugees than everybody else put together Real sanctions were imposed on Russia post the Ukraine Crimean fiasco, with the French, the Italians and swathes of German business firmly in opposition Europe made direct loans to a large number of insolvent nations, a policy that was extremely unpopular with the German public Yes, there are things that Merkel could have done better But she was literally in the eye of the storm and is amazing enough a politician that she managed to steer through three elections and always deliver the goods with both her country and Europe in mind I read this book and it reinforced my belief that no politician in history could possibly have played her awful hand as well as she did.The book closes with two very strong chapters one on Trump and the concluding chapter which lays out the author s main thesis politics trumps economics Amen.A couple last observations grumbles from me Grumble 1 Crashed was advertised as the book that draws the line from the bailouts to Brexit and Trump It really isn t.Grumble 2 I hope somebody somewhere writes a book an article a Tweet whatever that exposes Draghi s whatever it takes moment for what it actually was one half of a bargain whereby i on one hand Germany allowed the ECB to lend money to Southern European governments via the printing press ii on the other hand under the false pretenses that this is to do with NPLs, rather than the suppression of hard money creation south of some parallel no loan will be given ever again by a bank in Italy, Portugal or Greece.Tooze does not grasp this at all and has been fed the story that Target 2 blew up when northern investors withdrew What s really happened is Germany regrets allowing Southern banks to create hard Euros and it won t happen again They will fund the governments instead, where at least you have some clue what happened to the money Grumble 3My country s young, charismatic radical left prime minister is no different from any of his predecessors Stop romanticising him.Anyway, enough from me Go buy the book, for Blinder s reign as the best author about the crisis has ended.Step forward, Adam Tooze


About the Author: Adam Tooze

Is a well known author, some of his books are a fascination for readers like in the Crashed: How a Decade of Financial Crises Changed the World book, this is one of the most wanted Adam Tooze author readers around the world.


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