Review: All the Devils Are Here
The Book: All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean & Joe Nocera, Portfolio, Hardcover, November 2010.
I know you might be thinking, "Another book on the financial crisis… really?" But this is the one that many have been waiting for, and after reading it for myself, I can safely say that Bethany McLean and Joe Nocera have delivered the most comprehensive documentation to-date of the many pieces that built the puzzle of our financial system over the decades. And from CEOs to politicians, government officials to mortgage lenders, borrowers, ratings agencies and traders, all the devils are truly in there.
The authors are a dream-team of reportage. A contributing editor to Vanity Fair, Bethany McLean may be most well known for coauthoring The Smartest Guys in the Room, which is the definitive work on the Enron scandal and an easy choice for us when picking The 100 Best Business Books of All Time. And Joe Nocera, a columnist for The New York Times, ranks with Michael Lewis as one of the best pure writers on business working today. His 2008 book, Good Guys and Bad Guys, is one of the best collections of business journalism—and study of American business personalities—ever put together.
Their new effort, All the Devils Are Here, is a complex tale, almost dizzying in scope, but is handled with such skill and so chock-full of magnificent and memorable stories that you'll know the full story inside-out by the time you put the book down. The tale of John Breit in the book's prologue will give you an idea of what I'm talking about.
Breit had once been the head of market risk management at Merrill Lynch, with easy access to the company's directors. But, over the past decade, Breit and all other significant risk management was basically relegated to a broom closet—which is why it was a surprise when Merrill CEO Stan O'Neal asked to see him in September of 2007 to get his calculations of Merrill's exposure to risk. McLean and Nocera recount the end of that meeting beautifully:
Listening to him, Breit realized that O'Neal seemed to have no idea that Merrill's risk management function had been sidelined.
The meeting finally cam to an end; Breit shook O'Neal's hand and wished him luck. "I hope we talk again," he said.
"I don't know," replied O'Neal. "I'm not sure how much longer I'll be around."
O'Neal went back to his desk to contemplate the disaster he now knew was unavoidable—not just for Merrill Lynch but for all of Wall Street. John Briet walked back to his office with a strange realization that he—a midlevel employee utterly out of the loop—had just informed one of the most powerful men on Wall Street that the party was over.
I would never use the words "if you're going to read one book on the financial crisis," because there are just too many must-reads in the category. And because its attention is so all encompassing, this book requires a good deal more patience than others. But McLean and Nocera have done something important, special and singular in All the Devils Are Here, and I really hope you all read it.
Reviewer Jack Covert is the founder of 800-CEO-READ, a leading bookseller to corporations and large organizations, based in Milwaukee.