Weak end to the crisis sagas

The economic recession that the world stumbled into seems to have caused larger damage to the forests than banks. Add Maria Bartiromo’s The Weekend That Changed Wall Street to the “recession literature” shelf that is already packed to the rafters. Aided by Catherine Whitney, the CNBC anchor recalls the tumultuous weekend of September 12-14, 2008 when Lehman Brothers went under, Merrill Lynch sold itself to Bank of America, the stock market was in the toilet and AIG became a ward of the federal government.

Bartiromo has been reporting from the New York Stock Exchange for 17 years and this book is a testament to the contacts she made over the years. Her face is after all that launched, literally, a thousand shows (Closing Bell with Maria Bartiromo) and according To Gordon Gekko of Wall Street 2, she’s a huge hit even among Gekko’s prison inmates.

The Weekend is mostly a blow-by-blow account of “the major-league powwow” between the Wall Street elite (except Lehman) and the then Treasury Secretary Hank Paulson, Federal Reserve Chairman Tim Geithner and their associates, who had their nuts against a cheese grater over Lehman Brothers future. In March 2008, the government provided an emergency loan to Bear Stearns to orchestrate a fire sale to JP Morgan. But bailing out Lehman Brothers would surely have raised the bogey of “moral hazard” and thus a repeat of Bear Stearns was ruled out. This book is an unwitting ode to the master brinkmanship of Bank of America and Barclays, who pulled out of a near-emerging deal at the nth hour. It was a rare moment of selflessness among the other investment banks that were willing to stump up a substantial amount to keep Lehman’s head above water at least for a while. It’s another thing that it never fructified.

The other part of this slim book is dedicated to the ripple effects that were seen in other countries and how the financial world might pan out post-recession. Bartiromo’s reporting is to be seen all over the book and it adds the necessary colour to an event that has been chronicled ad nauseam. Sample her description of Paulson: “Hank Paulson, I had learned from experience, was very good at talking lots and saying little.” Sometimes the same colour turns garish. Maria quotes a Lehman source as telling her, “Look, I’ve got to run. Talk to you later.” I would like to meet any reader who gives a toss about that.

The Weekend is one of those books that are written so that the writer isn’t accused of a dereliction of duty. What is supposed to be a massive takedown of the financial experts instead turns into an exercise of self-aggrandisement. The implicit message throughout this rudderless book is that no one can afford to snub Bartiromo. It must be true that former Lehman CEO Dick Fuld apologised to her for the “chilly reception” he gave to her at a party in 2009 but that fact didn’t contribute to the book’s narrative in any way.

And frankly, I didn’t give a monkey about the glorious mayhem Wall Street kingmaker Steve Scharzman wrought on Bartiromo’s former apartment after buying it. “Gayfryd Steinberg (Bartiromo’s mother-in-law), a woman of impeccable taste, had remodeled the apartment… and her work had been, in my opinion, sheer perfection. Christine (Steve’s wife) gutted the place and spent a year on multimillion-year overhaul.” I empathised with Bartiromo as much as with the bankers who were crying themselves hoarse over lower compensation during the recession: zilch.

A book of this magnitude needs a gripping narrative and to be better than the best Dashiel Hammet or Chandler, “unputdownable”, like Andrew Ross Sorkin’s Too Big To Fail and Michael Lewis’s The Big Short. Bartiromo falls flat on that account. Seventeen years of television experience is to be seen in staccato sentences, superfluous exclamations and a semi-cliché in every sentence.

There are some flashes of brilliance in this overwrought book. Like the lesser-known fact that Wachovia’s Achilles heel was a California-based mortgage company called Golden West Financial, which was acquired by the former for $24 billion. The company’s “Pick-a-Pay” programme “allowed borrowers to pay low monthly amounts, delaying what they owed by adding to the loan principal. People ended up owing far more than their properties were actually worth.”

Vikram Pandit, the Citibank chief, displayed rare candour when he was speaking with Bartiromo about the Basel liquidity requirements for banks that called for $3-5 trillion in liquidity. “Where do you think that money will come from?” he asked rhetorically, “The lending pool.”

This good work was undone by what looked like a wishy-washy approach to the book. With the benefit of hindsight, Bartiromo could have delved deeper as to why Lehman was denied a bailout after which troubled banks were given $767 billion in the name of Troubled Asset Relief Programme. Insinuating personal rancour between Fuld and Paulson is a classic case of barking up the wrong tree. She should have built up on this particular Paulson quote: “There is a difference between a capital problem and a liquidity problem.” To think of it, if she wasn’t painting by numbers she might have turned out a more rigorous book.

THE WEEKEND THAT CHANGED WALL STREET
Maria Bartiromo with Catherine Whitney
Portfolio/Penguin
Pages 232; Rs 958