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And Then the Roof Caved In: How Wall Street Greed and Stupidity Brought Capitalism to Its Knees |  | Author: David Faber
Publisher: Wiley
Category: eBooks
This item is no longer available
Rating:  68 reviews
Sales Rank: 46528
Format: Kindle Book
Media: Kindle Edition
Pages: 208
Number Of Items: 1
Dewey Decimal Number: 332.63240973
ASIN: B002EBDOWY
Publication Date: June 15, 2009
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Product Description
CNBC's David Faber takes an in-depth look at the causes and consequences of the recent financial collapse
And Then the Roof Caved In lays bare the truth of the credit crisis, whose defining emotion at every turn has been greed, and whose defining failure is the complicity of the U.S. government in letting that greed rule the day. Written by CNBC's David Faber, this book painstakingly details the truth of what really happened with compelling characters who offer their first-hand accounts of what they did and why they did it. Page by page, Faber explains the events of the previous seven years that planted the seeds for the worst economic crisis since the Great Depression. He begins in 2001, when the Federal Reserve embarked on an unprecedented effort to help the economy recover from the attacks of 9/11 by sending interest rates to all time lows. Faber also gives you an up-close look at where the crisis was incubated and unleashed upon the world-Wall Street-and introduces you to insiders from investment banks and mortgage lenders to ratings agencies, that unwittingly conspired to insure lending standards were abandoned in the head long rush for profits. - Based on two years of research, this book provides deep background into the current credit crisis
- Offers the insights of experienced professionals-from Alan Greenspan to prominent bankers and regulators-who were on the front lines
- Created by David Faber, the face of morning business news on CNBC, and host of the network's award winning documentaries
From regulators who tried to stop this problem before it swung out of control to hedge fund managers who correctly foresaw the coming housing crash and profited from it, And Then the Roof Caved In shows you how the crisis we currently face came to be.
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| Customer Reviews:
Showing reviews 1-5 of 68
 Good but incomplete May 31, 2010
merjet (IL)
I think this is a good book about part of the story about how the "roof caved in." It tells the personal stories of a few of the people involved in the housing boom and bust -- borrowers, brokers, the lenders, Wall Street, investors, the rating agencies, and a hedge fund manager.
The book starts with a sketch of the events of September 2008 when Lehman Brothers filed for bankruptcy, the credit market nearly froze and the federal government took ownership of 80% of AIG. Faber asks how it happened. He says it began with the burst of the tech stock bubble of 2000-2001, September 11, and the actions by the Federal Reserve -- led by Alan Greenspan - to try to contain the damage. Interest rates for home mortgages became quite low and Americans went on a home-buying binge.
Faber tells the story of an immigrant who bought a house way beyond what he could afford, with the help of a mortgage broker and probably fraud. He tells a similar story of a woman in the Los Angeles area. The story moves on to the brokers who sold these subprime loans and the Wall Street firms that bought the mortgages, packaged them into securities, and then sold them to investors around the world.
He tells how in earlier years Fannie Mae and Freddie Mac dominated the mortgage market with tight lending rules. Then scandals involving these GSEs (government sponsored enterprises) came to light, credit standards became very weak, with subprime brokers and Wall Street firms leading the way.
Faber seems eager to put most of the blame for the boom and bust on Wall Street. Note the book's subtitle. On page 66 he makes a bumbling attempt to absolve Fannie Mae and Freddie Mac of "promulgating" the financial crisis. Then on page 78 he notes that Freddie Mac's chief risk officer warned the CEO in 2004 about buying mortgages issued with lax lending rules. Faber adds that Fannie and Freddie plunged deep into the parts of the mortgage market they once avoided, as revealed by a congressional committee in 2005 chaired by Henry Waxman. Faber can't have it both ways. Fannie, Freddie, FHA, HUD and Congress were deeply involved in causing the crisis. For example, see Gasparino's book The Sellout or the Village Voice article by Wayne Barrett, August 05, 2008, available online.
Faber tells the story of a town in Norway that invested in CDOs (collateralized debt obligations) to try to bring in more revenue for its government. The folks did not know what they were buying and the CDOs plunged in value. These CDOs were not made from mortgages, but similar stories with mortgages are plentiful.
Faber tells the story of Kyle Bass, a hedge fund manager who predicted plummeting house prices and made a lot of money based on his predictions.
As other viewers have noted, there is a video, House of Cards, which can be seen online and tells the same story with a little less detail.
`No-one seemed to ask what would happen if housing prices started to fall.' March 30, 2010
J. Cameron-Smith (ACT, Australia)
1 out of 1 found this review helpful
This book, by CNBC's David Faber, provides an analysis of the global financial crisis that commenced in 2007. The cause of this crisis, as written by Mr Faber, is a combination of greed and regulatory failure.
David Faber traces the lineage of the subprime mortgage industry, and tracks it back to the aftermath of the September 11 2001 attacks when interest rates were lowered to try to help the American economy to recover. The lowering of the interest rate apparently enabled a drop in lending standards which allowed people to take on mortgages they couldn't afford.
The causes and consequences of this collapse are covered in this book. While reading ex post analysis may be cold comfort to many, seeking to understand the various factors involved is important in order to try to prevent such an occurrence in future. I think that this book provides a good starting point for those of us who seek to better understand what went wrong, and why. The subprime mortgage industry failure may have originated in the USA, but its impacts are global.
Jennifer Cameron-Smith
 Credit Crisis 2008 LITE January 19, 2010
C. V. Waldorf (Aix En Provence, France)
This book reads like a personal memoir of the credit crisis, and as such lends color and depth to several episodes that Faber witnessed from his front row seat at his network. It provides a timeline and touches on most of the issues central to the crisis. The book is an entertaining and very quick read or listen. Credit to the author for a cogent and concise description of credit default swaps(CDS's), collateralized debt obligations(CDO's), and, most importantly, synthetic CDO's. I like David Faber. I think he has maintained a high degree of journalistic integrity even as his `Old Guard' network colleagues have gone in a different direction and that integrity is evident in this book.
This book is, however, disappointing on a number of important points:
Alan Greenspan. Every crisis needs a culprit and the more neat and tidy the assignation of blame, the more popular the scapegoat will be. I do not get the sense in reading this book that Faber is among the most rabid of Greenspan bashers, but as a reporter, I expected a more thoughtful account of his unique encounters with the former Fed Chair. `The muffin encounter' , Chapter 4, illustrates well the cult of Greenspan that arose during the heady years of his tenure. The investigative reporter might have questioned the reasonableness of this cult of worshipers turning into an angry mob calling for the chairman's head, maybe identifying an overshoot of negative sentiment just as there had been an excess of enthusiasm in the boom years.
Were he to do so, Faber might see beyond the pat reasoning where the fed's failure to regulate an out of control mortgage market distribution system is the proximate cause of the bubble. This view is naïve in the extreme and one of the more disappointing aspects of an otherwise comprehensive survey. There is room for a substantial debate on the reasonableness of how tighter regulation might have helped the US avoid the crisis--Faber lays out many of the reasons why this would not have worked--but a nagging question presents itself, If tighter regulation of the mortgage market was the fix as Faber suggests, why has it not been implemented since the crash. Moreover, why is the current chief regulators and politicians not only not enacting tighter mortgage market regulation, preferring, as Greenspan did, to allow the markets to self regulate this issue, but instead moving in tandem to urge banks to lend and lend some more. Greenspan is getting a bad rap for not doing what his successor is not willing to do now, and that is because it would not have worked then and it would be counter productive now. As Faber recounts of his interview with Greenspan, and I paraphrase, `Is it really necessary to legislate against practices which are decidedly contrary to sound business practices?' And if the answer is yes, even in retrospect, then the real story lies in identifying the source of this paradox and the moral hazard it implies. Faber's treatment of this truth is downright derisory.
Faber describes the evaporation of risk premium in the market, but not in the context of the dilemma facing the fed in the years leading up to the crisis. Greenspan's "conundrum", the once famous now forgotten phenomenon does not figure into Faber's presentation, and nothing could be more central to the story. Current rationale a reduction of risk premium as measured by yield spreads are symptomatic of that deflationary forces, which in turn are best combated through an easing of monetary policy and general liquidity suggest the Greenspan's approach was correct or at least in keeping with the mode, and that his mistake was in not appreciating the scale of the problem. Faber should have at least given him credit for that.
AIG and Hank Greenberg. This treatment was a little disappointing particularly since Faber spent so much time reporting on this story. Spitzer made sure that Greenberg would be punished for his misdemeanors, while his successors Sullivan and Willemsted, as well as all of the shareholders of AIG, would be punished for his felonies. I kept hoping Faber some of the more salient issues surrounding AIG and their role in the early stages of the crisis. When did AIG begin writing credit default swaps? What was the total liability of these contracts, real or notional, at the time Greenspan departed? How were the premiums booked? How were the reserves established before mark to market was implemented? Did these contracts and the accounting have anything to do with AIG's superior performance over the period of time leading up to Greenberg's departure, particularly given the low interest rate environment and the soft insurance rate environment? There is a story there and Faber seems to have left that for another book.
I recommend this book as a very accessible, at times colloquial review of the credit crisis of 2008. More comprehensive and academic accounts include When Markets Collide by Mohammed El Arian and Animal Spirits by George A. Akerlof and Robert Shiller.
 Any business library needs this October 15, 2009
Midwest Book Review (Oregon, WI USA)
AND THEN THE ROOF CAVED IN: HOW WALL STREET'S GREED AND STUPIDITY BROUGHT CAPITALISM TO ITS KNEES tells of the realities behind the current economic crisis, detailing what happened to cause the greatest economic collapse since the Depression. It comes from an award-winning correspondent who has covered Wall Street for over two decades and is packed with firsthand accounts of the bankers who have contributed so heavily to this disaster. Any business library needs this.
GREAT, GREAT BOOK! DAVID FABER IS GENIUS! October 9, 2009
INVESTOR IN OC (ORANGE COUNTY CA.)
The BEST book EVER written on how and why the real estate market collapsed. Easy to read and understand. David Faber made it a pleasure to read about such a high stakes and difficult subject. Worth it at any price.
Showing reviews 1-5 of 68
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