Timeless Moon gI wrote this review about Dec 2017 and very briefly edited it several times the last being 23 Sept 2018This is onereat bookThere are so many misconceptions of what caused the 2008 financial crisis reat recession and subseuent long drawn out recovery that are carefully skewered in this book and alternatives made clear that I hardly know where to beginSo I will ive you a list of just some of the key elements in the financial tragedy that were totally preventable if sound economic policies as explained in the book were understood and followed Too loose then too tight monetary policy culprit The Federal Reserve Board Moral hazard for banks culprit FDIC Federal housing policiessubsidies culprit various Britain's War Machine government agencies Congressmen Presidency Rating agency oligopoly and change in payments structure culprit Federalovernment agencies policies Massive Government players in housing bubble culprit Freddie Mac and Fannie Mae with Congressional mandates Government regulations diverting bank managements limited attention away from key business risks to political risks culprit SEC Rule of Law in tatters Property Rights dismissed culprit TARP Congressional The Age of Light grant to unaccountableovernment officialsStarting to L'opticien de Lampedusa get the pictureNot only did Allison explain the causes of the crisis but he also detailed the policies that would cure the situation using the best most relevant historical facts and theoretical methods His predictions of how the actually implementedovernment policies would create a very very slow and weak recovery have played out just about exactly right THIS is very telling of the accuracy of his account Reading this book in tandem with listening to Michael Lewis best selling book The Big Short and seeing the movie too was a fascinating if infuriating experience The contrasts between the two different accounts could not be starkAllison s calm reasoned explanation of the historical theoretical and practical reasons behind the crisis and then ongoing Doomsday Men: The Real Dr. Strangelove and the Dream of the Superweapon great recession covered all the bases But Lewis dramatic focus on particular financial traders and his fixation on somereat but unaccounted for upwelling of private reed and incompetence how s that for an incongruent combination virtually totally ignoring the very real GOVERNMENT policies and depraved actions was just about too much to takeWas Lewis just incompetently ignorant of all the key facts and ideas that Allison patiently explained Or did he purposely leave them out of his narrative for some reasonsI urge you to read these two books and come to your own conclusions Started reading this book yesterday 1 aug 2017 finally It had been on my To Read list and bookshelf since it came out in 2013 The beginning is sooo ood Reminds me of the later book John Allison wrote just after this but which I read first The Leadership Crisis I reviewed that here am also listening to the audiobook The Big Short by Michael Lewis at the same time The contrast in understanding of the overall economic or even just financial system is night and day Lewis Whoops!: Why Everyone Owes Everyone and No One Can Pay gets into and highlights or makes a centerpiece many details about his take on personalities motivations personal morality values foibles etc much than Allison Allison deals with some of those issues too but much believably kindly and accurately as far as the big picture And Allison deals with the benefits for everyone of living an individual decent life Drama emphasis vs truth seeking emphasis which do you want to rely onAs I read and listen to of these two books I will try to compare and contrast them toive you a Michelangelo: His Epic Life good flavor of each But as of about 60 pages into Allison and also having read his other similar book and having listened to 3 chapters of the Lewis book and seen the movie based on it I can tell you if you care about the truth in how the world really works you will love Allison If you have a massiverudge against free markets and like an incredibly short sighted narrow biased view of descriptions of people financial products and organizations Lewis is your manThose initial observations held up throughout both books But don t take my word for it check out both yourself See who YOU think was describing the accurate picture of what actually happened and who is to blame for the crisis all the massive disruption of people s lives and lousy economy afterwards The author debated the topic of the cause of the 2008 crisis on 20 Feb 2019 The Financial Crisis and the Free Market Cure How Destructive Banking Reform Is Killing the Economyby John A Allison 2013 McGraw Hill a short book report by Ron Housley I had the ood fortune to hear John Allison deliver a lecture several years ago and I was stunned by the scope and detail he was able to bring together into one unified talkHe establishes his credibility right out of The Shute By Deftly shute by deftly varying aspects of his subject into a readily understandable whole He has total command of the tiniest detail and he at once has the total concomitant command
of all theall the principles He may very well be the Steve Jobs of banking And now he has written a book Stop and catch your breath for a moment An early chapter the one entitled What Happened will ive you a Boy Soldiers of the Great War: Their Own Stories for the First Time great example of Allison s rapid fire but sweepingly comprehensive style of sharing his account He does it with no teleprompter You will witness the perspective of a player Allison himself who is able to assess the contribution to a problem of a vast myriad of input factorsTake for instance the 2008 financial crisis where the Fannie Freddy story reads like a thriller with tones from The Big Short at every turn In spite of all the New York Times stories during the housing bust of 2008 an important but obscure and largely unaccepted fact remained Freddy and Fanny had amassed liabilities in excess of 55 Trillion they had practically no assets at times they operated at a 1000 to 1 leverage ratio It was 100% aovernment creation and the NYT blamed free market capitalism for the bust When the Wall Street "Reform Act was signed into law in July 2010 we saw a frightening spectacle the authors of " Act was signed into law in July 2010 we saw a frightening spectacle the authors of reform bill were the SAME politicians most responsible for the bubble in the first place Dodd and Frank themselves It is a delight to witness how Allison assembles the relevant facts together in support of a point he is a master And one of the primary points that he makes is that systemic failure of the financial markets can occur ONLY as the result of Making Sense of Leadership: Exploring the Five Key Roles Used by Effective Leaders government policy FANNY AND FREDDY Did you knowFanny Freddyot into the subprime business under pressure from the Clinton administration They were created to support the mortgage industry s loan origination business but wound up taking over that business for themselves It is one story of how an enormous enterprise rew up right under the noses of clueless Americans and ultimately contributed to the destruction of wealth of those many clueless millions from coast to coast Even today most American voters do not know what happened or is happening to their life savings MARK TO MARKET Did you knowAllison s is the only clear explanation I ve ever heard of mark to market accounting which was the subject of endless sound byte reporting back a few years ago Allison s punch line is Fair value accounting is inconsistent with this concept that business be valued as oing concerns because it effectively assumes that the businesses s assets are being liuidated under stress p104 I had not realized how important the forced accounting methods were in contributing to the 2007 2009 economic downturn the bureaucrats in charge finally relaxed their irrationality in April 2009 allowing the downward spiral to endMr Allison s own experiences with BBT are sprinkled in for us a common theme turning out to be How could we know what random and destructive policy actions Gandhi Churchill: The Epic Rivalry that Destroyed an Empire and Forged Our Age government policy makers would take next pertinent at nearly every level of economic decision makingAs a corollary to the mark to market accounting debacle there is the story of how it came to be that stock optons were expensed even though they never represented an expense at all It is on par with the attempt of the Indiana State Legislature in the 1930s to legislate pi to be an even 3 point zero 30 When politicians attempt to trump reality reality always wins THE SHADOW BANKING SYSTEM Did you knowNow comes the fascinating chapter about derivitives and what is known as the shadow banking system The MainStreet Media has treated this subject with the same superficiality and misapprehension as they did when reporting on mark to market accounting Among the points entirely evaded are these funding left the commercial banking system due toovernment rules and regulations that made commercial banking less competitive The Fed bailed out the money funds creating the illusion that they are not a risky investment Freddy and Fanny basically drove commercial banks out of the traditional prime home mortgage business Derivitives which the MainStreet Media loves to decry are mostly instruments to reduce risk and their use as speculation is seen only on the fringes when a company prepares itself for bankruptcy the process can be handled without crashing the financial system but Lehman Brothers. John A Allison is the longest serving CEO of a top 25 financial institution having served as Chairman of BBT for twenty years He currently serves as President and CEO of the Cato Institute and as a distingui.
John A. Allison è 0 DownloadHich heretofore comprised our understanding We Les Innocents get to see just how close we are tolobal upheaval to a US decline into 3rd world status to civil unrest to union violence like in Greece to barbarians at the ate Allison dares us to look at 1920 Argentina which at the time had a standard of living eual to the US Then it plunged itself into statism via taxation redistribution and loss of individual rights It became a 3rd world economy for decades all mediated by the morality which condemns selfish America s own decline may have developed slowly starting with Teddy Roosevelt s and Woodrow Wilson s progressive disrespect for the Constitution But today it has accelerated to a frightening pace the incredible march of the regulatory state p 259The teachers the journalists and the politicians have attained a frenzy of utopian idealism destroying individual rights expropriating wealth oblivious to the cost in prosperity and standard of living Our intellectuals and politicians are willing to sink a nation into 3rd world status if that s what it takes to achieve the evil of making everyone eual Why do they do it They do it because they have bought into the philosophy of altruism reuiring us to sacrifice ourselves until everyone is reduced to euality That is what they mean by social justice Mr Allison s book demonstrates that they do not have economic ideas on their side but they are winning because of their promotion of philosophic pragmatism along with altruism Their philosophy is winning on the national stage And since the Republicans mostly agree with their basic philosophic positions about what is needed for social justice a reversal of direction back toward freedom and individual rights does not seem likely to come from the Republicans The real challenges are philosophical not economic p252 but in order for better philosophic ideas to et a hearing the bad economic ideas must be swept awayBrace yourself and arm yourself with the knowledge in this book It was a decent read but ot a little meandering and unfocused at about 23 in If you re looking for a reat technical analysis of what happened I recommend Meltdown by Thomas Woods The book does a very The Lives of Stay-at-Home Fathers: Masculinity, Carework and Fatherhood in the United States good job in explaining the advantages of the free market model as opposed to crony capitalism Goldman Citi et alIt dispels a lot of myths related to the supposed deregulation of the financial markets On the contrary finance and banking are one of the most regulated industries in Western Europe and the US And indeed it was regulation and state intervention that caused the Great Recession I amiving it 45 because the author has the unfortunate tendency to o into long rants against leftist elites environmentalism liberal education and the usual scapegoats one usually sees on Drudge Nevertheless a solid book Having been in business for 25 years much of which was in senior management I found this book the most credible explanation of the financial crisis I ve seen This is the kind of description you ll et from someone with first hand experience but not wedded to some political agenda Well done rating 365This book provides a Gone: The Disappearance of Claudia Lawrence and Her Father's Desperate Search for the Truth great discussion on the topics of regulation and how politics and naive intentions influence banking It sreat to read an insider s view of what went wrong in the banking industry during the crisis Allison was a super successful banker who also studied a lot on the topic of free enterprise and capitalism His criticisms of the industry are very insightful even if too simplified at times I specially enjoyed the real life examples of how regulation distorted the market and ave a crony advantage to the unhealthy banksAlso I stand with the author in his claim that the main problem is philosophical This is one of the most important points one has to realize before action can be put in place The main problem with our economy is the lack of self reliance self esteem and this whole collectivist mentality the eualitarian mentality Even if I don t agree with all of the author s points or if I would put them in another way I must congratulate him for bringing this to the tableI recommend this book to everybody My main upsets were that sometimes it ets a little repetitive and it definitely is a simplified book which can be a Moonrise (Snowfall, good thing for starters but mayet to the nerves of cynical leftists I don t always enjoy his fundamental view of banking even though I favor free banking I don t always agree with his view of the economy and of economic rowth and I don t always agree with his policy recommendations The book ets a little bit too disperse towards the endOverall I mostly value it for the real life examples of bad regulation and for the priviledge of reading a former banking CEO who has a pure capitalistic mentality This book was written by John Allison who served as the CEO of BBT Bank for many years and helped that company to Hello, Snow! grow into one of the largest and most successful financial institutions in the country His knowledge insights and years of experience working within the financial industry and with theovernment agencies financial industry and with the A Little Dinner Before the Play government agencies and bure I read 90% of the free sample which I think is enough to review the book based on the author s main idea as stated in the first chapter and what he blatantly left out Based on what I read very early in the book the author basically blames the entire financial crisis on the US Government I admit that the US Government has done some really stupid and harmful things and is still doing such things and in fact nearly all of the stupid and harmful federal laws are still on the books I would say that probably half the blame for the financial crisis should be on the US Government I would say the other half of the blame should be on the banks For a 20 year chairman of aigantic bank to ignore that is basically self serving nonsense It is beyond the pale I can think of at least four reasons right off the bat why the banks are to blame liar loans illegal alien loans subprime mortgages and ARMsIn case the author is not familiar with the term liar loans he knows the term no doc loans That was where the bank wanted to make as big a loan as the borrower wanted in order to make as much profit as possible The bank would basically say to the borrower how much money would you like to borrow tell us that and what you think your income should be to ualify for that or whatever your income actually is whichever is higher and we will pretend that is your income with a wink and a nod and without any documentation of your actual income I have spoken to people who took out liar loans so I know they existed and I know many of them defaultedAs for illegal alien loans whatever you think of illegal aliens it is probably not a Mastering the Art of Saying No Without Feeling Guilty: Tips, Techniques and Strategies good idea to make a 30 year loan to someone who can be deported at any time No doubt many of those loans defaultedWe all know what happened to subprime mortgages They turned into an unmitigated disaster of courseAs for ARMs the bankers wereung ho to push those onto any borrowers who would take them without explaining the complex terms They basically had three payment options maximum minimum and somewhere in between The in between payment was an interest only payment If you paid that all your payment options would be the same amount next month The maximum payment was interest and principle If you paid that all your payment options would be a lower amount next month because the principle decreased The minimum payment was like an interest and negative principle payment and was only supposed to be used for temporary financial emergencies because it would cause next month s payment options
to increase inincrease in The bankers never explained that They just basically said you can make any one of these three payments so of course most people just paid the minimum and their payments increased every month That turned into another unmitigated disasterBecause the bankers just wanted to originate as many loans as possible and then dump ie sell them bad loans became the problem of whoever bought them ie everyone else John Allison does an impressive job of explaining the complex issues surrounding the United States financial crisis He uses everyday examples to help explain banking the monetary system and how politics have come to play such an enormous role in what used to be a free market It s a long book but it s so worth the effort It really helped me to fill the Yuganta, The End Of An Epoch gaps on my understanding of the financial crisis and where we ought too from here Allison s Once a Wicked Lady: A Biography of Margaret Lockwood garbled and rambling prose freuent non seuiturs and maddening red herringset pretty Forbidden Reading grating after about two chapters As someone who isn t all that savvy about intricate financial systems and derivatives and what not his frustratingly confused and jerky writing style really detracted from my understanding of his arguments Iet that Allison is discussing complex issues and is trying to boil these issues down for the layman but you can t really do that effectively if your writing isn t worth a damn Which is uite sad because the insights of someone directly involved in the financial and banking industries before and during the crisis could be immensely valuable And sure there are diamond in the rough moments sprinkle. Ing on the board of directors of the Ayn Rand Institute He received a Lifetime Achievement Award from American Banker and was named one of the decade’s top 100 most successful CEOs by Harvard Business Revi. Did not so plan because it expected to be bailed out those in charge of bailouts were mostly from Goldman eg Sec Treas Hank Paulson is a large Goldman shareholder and they hated Lehman Brothers an organized bankruptcy of eg AIG parent company could proceed without disrupting financial markets the AIG bailout was essentially a redistribution of wealth from taxpayers to holders of Credit Default Swaps essentially Goldman Sachs the contribution to the crisis of Bernanke inverting the yield curve is almost never discussed by the MainStreet Media instead the media keep telling us that Bernanke is an expert BAILOUTS Did you knowIn the end Allison asks Was saving Goldman and AIG about SYSTEMIC risk or about crony capitalism p129 I don t recall the Wall Street Journal or the New York Times framing the uestion uite that way at the time Instead they kept telling us that our A Northern Line Minute: The Northern Line government had to infuse billions in order to prevent total economic catastrophe and so Americans swallowed hard and accepted it but they did not understand itAllison laments that Goldman is an advocate of special deals from Washington and is not an advocate of free markets If the USConstitution were enforced crony capitalism would not work because the politicians and bureaucrats would hot have the authority to hand out favors to their friends p129 REGULATION Did you knowThe conseuences of the Dodd Frank bill are clear ait makes US firms less competitive bit drives resources out of the US cit reduces job creation dit lowers US standard of living Nowhere in the press do we see any such analysis Again Americans swallowed hard and accepted it but they have not understood it In his final lament about the bailouts Allison shares with us The reward for running aood business is to have your worst competitors bailed out by the US Future Focus government and then to have massive new regulations that punish your company for sins it did not commit p130 Mr Allison uncovers the MYTH that deregulation caused the financial crisis that myth is put to bed once and for all MARKET CORRECTION Did you knowOften an UNDERSTANDING comes about as the specific result of how an explanation is framed In his discussion of MARKET CORRECTIONS Allison frames another view of what happened in 2007 09 He says p159 that instead of accumulating capital to invest in technology or manufacturing that the US was CONSUMING residential real estate on arand scale At the same time the massive federal Stimulus spending allocated on consumption vs production While citizens tried to save the politicians dramatically reduced savings for investment by spending on consumption This is said to be the real tragedy of the 16 trillion debt WHAT HAPPENED Did you knowWe are treated to a devastating indictment of Bernanke and Paulson their decisions were random and dishonest p 164 Even a 60 Minutes expos would be hard pressed to design a presentation capable of engaging the average American citizen the average American appears to have issues with basic thinking skills on far less complex issues Their verdict on Bernanke and Paulson should have been they are incompetent and dishonest a perfect storm for a financial crisis It seems that a nearly total absence of honesty and objectivity lay behind the financial crisis but since an underlying understanding is several abstraction layers deep most people eg the Average American voter do not take the trouble to Major Problems in American Urban and Suburban History: Documents and Essays grasp what happened Instead they have been taught too along with what the authority figures say with the pronouncements of regulators and politicians This is an IMPORTANT book which answers ALL of the false and misleading rationalizations that we hear to justify what the overnment policy makers have done to us It is a treasure troveHow many Americans believed BushBernankePaulson when they asserted that not passing TARP would lead to another Great Depression They injected fear and the masses went along with it But what really happenedTARP Did you knowOr take a peak at an insider s view of the TARP scandal TARP as with Dodd Frank proves harmful to healthy banks than to companies that should have failed TARP was a curse for the healthy companies because it kept irrational competition in business A notable example Citigroup a company which malinvested itself into bankruptcy THREE 3 times and each time was bailed out by the overnment allowing it to become bigger and worse next time That s so basic a point but I don t recall the discussion ever racing the pages or airwaves dominated by the MainStreet MediaHISTORY Did you knowThe other discussion that we don t hear about is the history of the 1920s vs the 1930s In the early 1920s there was a severe economic correction which was over uickly because the overnment did not interfere the correction was deep but it ended uickly By contrast in the early 1930s the severe economic contraction then was sustained for an entire decade because the Devil's Red Nickel government implemented massive regulations massive taxes and massive spending TARP turned out to be just another way forovernment to do all threeWe are reminded of another historical comparisona one result of the Great Depression was to scare Americans away from stocks for a uarter of a century stocks didn "t regain 1929 levels until 1954b today s crash happened as Americans " regain 1929 levels until 1954b today s crash happened as Americans realized that housing is consumption and not investment will it similarly be a uarter of a century before housing returns to the pre crash pre 2008 levelsBANKING SYSTEM CURES Did you know We Social Class in Contemporary Japan: Structures, Sorting and Strategies get alimpse of an entire culture in its death throes Then Mr Allison lays out the prescription for our return to economic health but sadly we can expect NONE of his recommendations to ever ain the attention or respect of those in power conseuently we can brace ourselves for an incredibly destructive crisis in the next decade or two Those in power
are smart enough to rasp that Allison s achievable set of steps would work but they want tosmart enough to John Flynn's Double Wedding Ring Step-by-Step Workbook grasp that Allison s achievable set of steps would work but they want to on to their power instead The American voter not only won trasp Allison s assessment he won t even try to The Book of Tapas grasp it ever The Dodd Frank reform bill offered by those in power as a solution actually worsens the situation aitives overnment protection to the too big to fail companies virtually ensuring their ongoing risky behaviors bits Durbin amendment is little than overnment mandated redistribution of wealth from bank shareholders and customers to large retailers and cit Love Is A Four Letter Word gives power to the Fed and bank regulators power to the very entities that created the crisis in the first place In the end what it comes down to is stable money is the foundation for long term prosperity p 189 But what the current crop of policy makersives us the exact opposite Their every decision takes aim at our long term prosperity their ever increasing regulations their ever increasing taxes their ever increasing spending The scope and breath of Mr Allison s coverage paints the terrifying picture of how fast our country is moving from two and a half centuries of prosperity into the uagmire of a regulatory welfare state where we must brace ourselves for unprecedented hardships and unprecedented loss of personal freedomsWhy are Americans so content when the rule of law is jettisoned as long as it is to benefit a union Why are most Americans so comfortable with implementing policies which have always failed in the pastHow can all this be you ask It is all possible says Allison because of philosophic ideas at play here As with Yaron Brook s book Allison also makes the case that what we really face here is a philosophic moralethical battle he contends that the financial Crisis Is Most Basically The Result Of is most basically the result of ideas not economic ideas He speaks of the ideas which predominate in American universities today and which are responsible for the creation of our teachers our journalists our politicians Even today s indoctrinated students might concede that we cannot indefinitely consume than we produce But hampered by today s philosophic pragmatism they are never able to develop an action plan based on such a principle because the dominant philosophy denies that there is any permanent truth ie principles to o by In today s universities it is acceptable even fashionable to be thought of as pragmatic Students in the humanities are proud to be pragmatic proud to claim no principles When a whole nation of voters is pragmatic they will vote for a candidate pledging not to reform entitlements even when those entitlements are leading directly to bankruptcyWhen we combine philosophic pragmatism with altruism we et a veritable witch s brew We et a uest for euality of outcome along with the Orwellian notion that justice means etting what we do NOT deserve We The Magic of Thinking Big get an entire Administration that thinks that justice consists in creating euality by hobbling the most ableWeet a Congress blithely shepherding the country into the nightmare of a utopian tyranny where monetary stability is sacrificed so that the hoards can have free stuff We A Lucid Dreamer: The Life of Peter Redgrove get a country on the brink but where the citizenry is unable to see what s happening to them Weet a citizenry voting to move faster in the same direction In Allison s book we Peas Book of Best Friends get a dose of clarity to clear the fog Shed professor at the Wake Forest University Schools of Business He is also one of the lead spokespersons for banking and policy reform today appearing at universities and businessroups nationwide and serv. .