The Wall Street Journal Guide to the End of Wall Street as We Know It: What You Need to Know about the Greatest Financial Crisis of Our Time--And How

by Dave Kansas

Book Overview

The definitive guide for Main Street readers who want to make sense of what's happening on Wall Street, and better understand how we got here and what we need to know to in days to come. Written by... This description may be from another edition of this product.

• Format: Paperback
• Language: English
• ISBN: 0061788406
• ISBN13: 9780061788406
• Release Date: January 2009
• Publisher: Harper Business
• Length: 224 Pages
• Weight: 0.45 lbs.
• Dimensions: 0.5" x 5.5" x 8.0"

Customer Reviews

A very good guide.

I have read many books on the topic and have a basic idea of what really happened, though we may never fully understand why. I find this book to be concise, yet very comprehensive. David kansas explains the cause of the financial crisis in simple terms and give you a breakdown of how Wall Street and the housing market, as well as other financial institutions are tightly intertwined; thus resulting in a domino effect when things go awry. Many of us hear about the Economic Crisis on the news or just in everyday conversation, and unless you're directly affiliated or familiar with the industry, you do not fully understand the cause and effects. This book is a good place to start.

Making Sense of What Has Happened to Our economy

Great book to read if you want get an understanding of the current state of affairs with our economy. I strongly urge everyone to read the facts and don't necessarily rely on the hype you get from the main stream media.

Learn from this Crisis and make it Your Opportunity

I stopped cold when I saw "The Wall Street Journal Guide to the End of Wall Street as We Know It" on a bookstand in the Pittsburgh Airport in January 2009. Browsing through it, not only could I scarcely believe how quickly it was written and brought to market, I could barely believe how clearly it outlined our current economic environment. Another thing became clear - that Dave Kansas, from his perch as a journalist with The Wall Street Journal, TheStreet.com, and FiLife is one of the few writers who could have written this book. Kansas captures the historical background to the cataclysmic month of October 2008 using the recent examples of the Asian financial crisis of 1997, the Russian crisis of 1998, the U.S. internet and technology bubble of 2000-2001. More pointedly, he delves into the implosion of hedge fund Long Term Capital Management (LTCM), the shortsighted policies of Fannie Mae and Freddie Mac, and the creation of, and dependence on, credit-default swaps (CDSs), collateralized debt obligations (CDOs), and collateralized mortgage obligations (CMOs). Kansas's conclusion: October 2008 was predictable. In fact, many of the firms swirling at the epicenter of the current crisis knew they had serious trouble brewing, but couldn't, or wouldn't, take action to avert their fate. In early 2009, nothing can hide how much our world and our financial markets have changed. Venerable financial firms have either ceased to exist or been swallowed up by stronger, more prudent, players. We are all left to deal with the aftermath. We've got to deal with the aftermath as we deal with our individual and collective behavior. I say that because most of us have scant knowledge of the role that complex financial products played in this mess and, to a large degree, that's okay. What's not okay is our intimate, yet often unrecognized or unacknowledged, knowledge of our human frailties. Human frailties that Kansas intimates underlie the real problem. As human beings, we do chase returns. We do act on our greed and overconfidence. We are often guilty of employing hope rather than sound strategy. And, if human beings approach the financial market in this way, what does that portend for a financial system run by human beings? I learned a great deal from "The Wall Street Journal Guide to the End of Wall Street as We Know It." I found it as important as a chronicle of the human frailties that led to our current crisis as it is an explanation of the nuts and bolts of how it happened. It cut through the hype and explained very complex terms in a straight forward and easily understood manner. But, it went even further by aiming to arm me with usable information. The bottom line is it's a true feat to produce a book this good so quickly. My only question is: Will we, individually and collectively, learn from it just as quickly?

Interesting and Timely!

The political push for increased home ownership from both parties led Fannie Mae and Freddie Mac, aided by Greenspan's low rates at the Fed, to surge ahead with loans at lower and lower rates. This, in turn, created increasing home prices where lenders cared less and less about the creditworthiness of borrowers - just hang on long enough until the price went up - then refinance or sell. Wall Street bankers, under pressure to increase earnings, developed a bundling approach to minimize the risks of investing in home mortgages, and passed them on to those who didn't know what they were buying. Any scintilla of perceived risk was supposedly eliminated by credit default swaps (CDS) developed by J.P. Morgan in the late 1990s - supposed guarantees against failure. Unfortunately, those selling CDS were not regulated, and the requisite financial backing was not provided. Nonetheless, the confidence these CDS provided, along with sophisticated computer risk models, easily convinced banks and others to leverage to the hilt and load up on these new products. Regulators did not take action - they were led by Bush II appointees who simply believed that regulations stood in the way of efficient markets. This was "confirmed" by no less an authority than Alan Greenspan. Credit ratings agencies did no better, oblivious to realizing that "whatever cannot continue forever, won't." (Herb Stein, former Fed Chairman) Then two hedge funds managed by Bear Stearns collapsed, investors panicked and wanted their money back, the CDS were quickly exposed as worthless paper, and banks stopped lending as a result of needing to write down their investments and prepare for any possible runs. The computer risk models had once again forgotten about correlated risk - it was Long Term Capital deja vu all over again. The economy basically stopped. Clearly, our financial and regulatory systems failed us. That does not stop some from continuing to live in the past - CNBC continues to announce their NYC location as "the financial capital of the world." Not likely, given the American financial assets now held in Asia (Treasuries, corporate bonds, U.S. stocks), and the anger of many at the economic collapse that has ensued in this collapse. What do we learn from this? Once again, it pays to be too big to fail; better yet, overly complex AND too big to fail. Thus, the $700 billion taxpayer-funded bank bailout and $780 billion stimulus bills, so far. Thrift is back in - consumers have no other choice as their favorite ATM (home, sweet home) is probably "underwater," and their second-favorite ATM (401ks) have fallen in value by close to half. Worse yet, the fear of layoffs is mushrooming with no end in sight. And the Asians continue to invade with their millions of cargo containers. What to do now? Invest in real estate, stocks, under one's mattress? Hopefully readers are not near or past retirement age - those are the most seriously affected. One would hope that "b

A concise and unbiased look at what happened to our economy

This is the first book I have read on my new Kindle. The author, Dave Kansas, is a former editor of the Wall Street Journal. The book is a concise and unbiased examination of what exactly has happened to the economy as well as a brief discussion on what an individual should currently do to protect their investments. The book starts by giving a brief history of risk - specifically examining how changes in investment strategies created new risk markets and thus new avenues for profit, leading to the bundling and selling of high risk mortgages that largely kicked off the economic decline. From there proceeds a discussion of derivatives, private-equity, and leverage. Chapter three deals with the 'canaries in the coal mine' that should have been taken note of before the collapse of Bear Stearns. Chapter four deals with the cascading impacts such as the takeover of Fannie and Freddie and the death of Lehman Brothers. Chapter five is about where we go from here. Chapter six shifts to the individual and which types of investments are protected. Chapter seven is about debt and Chapter eight provides advice for the individual, based on their age. Scattered throughout the book are mini-biographies of the names and faces involved, such as Timothy Geithner, Warren Buffett, and Alan Greenspan. At the end of each chapter is a summary in the form of an FAQ. I found the book very interesting and well written. What to many would sound like a rather dry subject is given in a fast paced narrative.