Crash of the Titans: Greed, Hubris, the Fall of Merrill Lynch, and the Near-Collapse of Bank of America

I wanted more detailed information on the 2008 meltdown. This book describes how the big guys failed to read the market correctly.

Great read, fell a bit short on long term implications.

So how to review a book with absolutely no redeeming characters? Where the only ones that look remotely ok were only such because they talked to the writer more than the others.The book itself is a worthy history of Merrill Lynch's last 18 months as independent company and it's rocky merger with Bank of America. It shows the management to be self-centered, myopic and completely incompetent. Amazingly everyone gets out alive. Stan O'Neil gets $160mm. John Thain is the CEO of CIT. Greg Flemming is one of the top executives at Morgan Stanley. Bob McCann similarly positioned at UBS. Ahmass Fakahany the former head of Risk and Co-President is now a NY restauranteur. Even the chief culprit Osman Semerci seems to be the CEO of a $2 billion Hedge Fund in London (Duet). Savings are wiped out. Thousands and thousands of people lose jobs and houses and strangely those at the center of the storm are doing just fine.The book is a page turner. There are moments of real drama. The firm, the banking business and the economy are all sinking. The key subjects at Merrill and BoA are well profiled. The conflicts and live timeline given a "novel" feel to the storyline. At certain points it feels oddly distant from the events of the day. For example it barely discusses the spring of 2008 which was a time of huge uncertainty. Instead of telling us again how certain people felt I think he could have tied more of what was going on around Merrill at that time. But still good pace throughout.The book lacks technical detail. Other reviewers have mentioned this. Given it's now 2011 there are probably enough books explaining the "what" of the crisis where perhaps this is the "who". But I'd say this suffers a bit as a result. In talking about Merrill's losses in the fall of 2008 there is scant detail on how it happened and yet this was the biggest loss by far - $18 billion and the CDO positions had already been sold. Michael Lewis showed in "The Big Short" that you can still write a great book and include some good details on what are the investments that when wrong without boring people.I thought the writer was also a bit soft on Thain. They talked about his expert handling of the LTCM wind down from 1998 but there are famous stories of Goldman front running that unwind from months before that fund crashed. Wouldn't it put Thain's character in a different light to be more skeptical of his role? I would also doubt that he was the key driver of Goldman's mortgage trading in the 1980's.Secondly he seems overly sympathetic to Greg Fleming. On at least a dozen occasions he talks about the 15 or 16 years that Flemming has put into the firm only to see it blow up. Come on. 16 years is not that long. Mentioning it once or twice is ok but it is not a badge or a special amount of time, particularly when you're making unbelievable amounts of money. Please remember everyone is in it for the money.His descriptions of Bank of America culture were fascinating. Clearly they had an inferiority complex overlayed with enormous bravado; seeing themselves as outside the New York banking scene and resentful of being seen as less sophisticated being based in Charlotte, North Carolina. They are not a bad bank by any means but clearly different from their major competitors. Given that Countrywide really buried that bank Farrell could have spent some time on it. It really was the Achilles heel that ruined Lewis' career. Ken Lewis probably could have survived the losses and ugly politics on closing the Merrill acquisition if his own bank were in better shape.In the end, this is a good book about the failure of Merrill Lynch and of how bad Stan O'Neil screwed up (repeatedly). There were colossal errors in judgement and a shocking misunderstanding of risk management. Risk management is 50% systems (which Merrill clearly did not have) and 50% honest dialogues with qualified practitioners which also did not exist. HOPEFULLY something is learned from it. If nothing else O'Neil should be kicked to the curb and stepped on (repeatedly).

Ever lose interest in a TV series because you grow to dislike all of the characters? That is how I ultimately reacted to this book. The book is interesting in describing the culture of both Merrill Lynch -- and modern investment banks generally -- and BofA. Contrast the obsession of all the Merrill people with their bonuses with the history of JP Morgan at the beginning of the industrial revolution. Morgan made his fortune and reputation by cobbling together many of the basic industries of the whole economy such as electricity and railroads, and imposing order and stability on those markets. He got wealthy by doing what he believed was good for the economy. Early Merrill built the company by bringing investments and financial planning to the ordinary people Morgan considered not worth his time. Modern Merrill became an all out cutthroat internal war for money and authority. The rest of the world was relevant only if it could further those ends. This deeply corrupt culture, which took hold throughout the capital markets, nearly crashed the economy in 2008 with short sighted fraudulent schemes to generate fees that even the most reputable companies sold to unsuspecting customers. It was a shock to the investment bankers when they realized nearly wrecking the whole economy might affect their bonuses. In contrast, BofA is portrayed as an impersonal, bureaucratic colossus whose main goal was growth and internal conformity. The book describes one memorable event involving a senior BofA attorney telling a Merrill attorney joining the BofA team that the Merrill attorney would only do what he was told and would not exercise any independent judgment even though that was required by his job. In the middle of this very tense meeting the BofA attorney gets called to a meeting with his boss only to find out he has been terminated after a career of several years and will be immediately escorted by security from the building, not because he was abusing his authority over the Merrill attorney but so he can be replaced by an executive who needs his job while waiting for another position to open. It is truly Orwellian.

Excellent.

The story is good, I just found the book physically not comfortable to read. In my copy not all pages were printed clearly, and the book is hard to keep open. The story is interesting

Until the many recent revelations on the causes of our financial institutions almost total capitulation when faced with difficult trading conditions, many, including myself, held those running these businesses in great respect bordering on awe, believing them to be superior to most other mortals. This conviction was reinforced by the fact that they were paid large basic salaries, were given huge annual bonuses almost as a matter of course, had pension funds of unimaginative magnitude, and were beneficiaries of a multitude of perks from chauffeured limousines, almost limitless expenses through to personal use of corporate aircraft. If these people were not outstanding business leaders surely the supposedly 'wise' members of the Remuneration Committees of these companies would not be irresponsible enough to rewards them so extravagantly?Wrong. It is quite evident from this outstanding book on the last desperate efforts of Merrill Lynch to avoid the ignominy of 'going down the tube' and the ill-conceived and clumsy efforts of The Bank of America when buying what was considered to be a 'trophy purchase' without exercising much care and due diligence, at a price that was at a considerable premium over its real value, that the senior executives of both companies were 'thrashing' around in the dark, displaying all the signs of 'lemming' management and not living up to the level of expertise that they were being paid for.Greg Farrell's account of these manic times is excellent. Although fairly long in terms of pages, it holds ones interest throughout and gives both the uninitiated and more financially experienced reader, a 'fly-on-the-wall' perspective into the dire repercussions of banks operating 'casino' type operations on their own accounts, and throwing the dice on the 'Credit Derivatives' Table especially as it transpires they had little or no appreciation of the risks involved.The 'players' in this shambolic commercial farce, like Zero Mostel in 'The Producers', might well ask the question "Where did we go right?" to which the resounding response would be "Nowhere!".A really good book which I believe is Mr Farrell's first and it is hoped not his last.

excellent value and service from this seller

Really good summary of Bank of America's acquisition of Merrill Lynch