Wall Street Financial Mumbo Jumbo=Recession

By Stephen

The talking head economists tell the American public the worst of the recession is over.  Yet the world financial crisis does not seem be abating with Greece, Ireland, and Spain all needing cash infusions to save their economies from tanking.  Meanwhile in the United States the debate still rages over what started the whole mess to begin with. Anyone who watches tv talk shows and/or listens to NPR can’t help but see and hear authors discussing their books about the recent financial meltdown.  Bail outs, plunging stock prices, Wall Street executives’ excesses, and Bernie Madoff’s rip-off  have fueled the debate on the cable news channels as well as giving rise to the Tea Party movement.

Let’s start with Madoff, since he is now a resident of North Carolina.    (He is incarcerated  in the Federal Correctional Institution Butner Medium near Raleigh.)   The most recent book on Madoff’s Ponzi scheme which ruined a number of people’s plans for retirement,  is No One Would Listen:  a True Financial Thriller.    Harry Markopolos is critical of the United States Securities and Exchange Commission for not investigating Madoff,  despite the author’s repeated complaints over a ten-year period.  Another author who questioned  the validy of Madoff’s profits early on was Erin Arvedlund.  She published an article on the financier in Barrons in 1991 and continued her interest in Madoff  with her book Too Good  To Be Truth: the Rise and Fall of Bernie Madoff.  Andrew Kirtsman’s biography, Betrayal : the life and lies of Bernie Madoff,  focuses on Madoff’s life and origins of his scheme.

Madoff’s Ponzi scheme was just the icing the cake of the recession.  Investors were sold worthless securities made up of packages of mortgages in danger of being foreclosed.    When these so-called “toxic”  mortgages were added to a real estate bubble that burst, the recipe was just right for a recession that some economists thought might equal the depression of the 1930s.

Lawrence McDonald’s  book A Colossal Failure of Common Sense outlines the events leading to the failure of Lehman Brothers from the point of view of an insider.  This books traces the story of  how Lehman Brothers traders saw disaster coming  and tried to warn the company executives, who ignored them at their own peril.

Andrew Ross Sorkin writes the story from a different point of  view in Too Big To Fail  His reporter’s skills allow him to present the reader with the inside scoop on how the financial crisis started and  quickly spread around the world.

Micheal Lewis  gives a more informal and humor filled review of the sub-prime mortgage scandal in The Big Short: Inside the Doomsday MachineHe argues the greed of Wall Street higher ups  (not only at Lehman Brothers)  caused them to dimiss the warnings about the coming real estate bubble bursting.

Simon Johnson and James Kwak, in their book, 13 Bankers, argues financial institutions must be made smaller and both Republican and Democrat adminstrations must divorce themselves from Wall Street.

Rep. Ron Paul takes a Libertarian view of the Federal Reserve System in his book, End the FedThe title speaks for itself.

Book TV on C-Span has aired many of these authors talking about their books.  You can access these at  their archive.

Some other books on the financial collapse:

William D. Cohan, House of Cards

Roger Lowenstein, The End of Wall Street

Charles R. Morris, The Million Dollar Meltdown

Kevin Phillips,   Bad Money: Reckless Finance, Failed Politics, The Global Crisis of American Capitalism


2 thoughts on “Wall Street Financial Mumbo Jumbo=Recession

  1. Stephen,
    Great write up. Can’t wait to hear how the econamy is going absorb all the oil that is being spilled at this very moment. Is it too much to ask for one crisis at a time? “I know I’m a dreamer”.


    • May I say Congrats to you both.
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