Catalogue


Infectious greed : how deceit and risk corrupted the financial markets /
Frank Partnoy.
edition
1st. ed.
imprint
New York : Times Books, 2003.
description
xii, 464 p.
ISBN
0805072675
format(s)
Book
Holdings
More Details
imprint
New York : Times Books, 2003.
isbn
0805072675
catalogue key
4825834
 
Includes bibliographical references and index.
A Look Inside
Excerpts
Excerpt from Book
FromInfectious Greed: By 2002, the closing bell of the New York Stock Exchange was barely relevant, as securities traded 24 hours a day, around the world. The largest markets were private, and didn't involve regulated exchanges at all. Financial derivatives were as prevalent as stocks and bonds, and nearly as many assets and liabilities were off balance sheets as on. Companies' reported earnings were a fiction, and financial reports were chock full of disclosures that would shock the average investor if she ever even glanced at them, not that anyoneincluding financial journalists and analystsever did. Trading volatilities were sky high, with historically unrelated markets moving in lock step, increasing the risk of systemic collapse. In just a few years, regulators had lost what limited control they had over market intermediaries, market intermediaries had lost what limited control they had over corporate managers, and corporate managers had lost what limited control they had over employees. This loss-of-control daisy chain had led to exponential risk-taking at many companies, largely hidden from public view. Simply put, the appearance of control in financial markets was a fiction.
First Chapter
From Infectious Greed:

By 2002, the closing bell of the New York Stock Exchange was barely relevant, as securities traded 24 hours a day, around the world. The largest markets were private, and didn't involve regulated exchanges at all. Financial derivatives were as prevalent as stocks and bonds, and nearly as many assets and liabilities were off balance sheets as on. Companies' reported earnings were a fiction, and financial reports were chock full of disclosures that would shock the average investor if she ever even glanced at them, not that anyone—including financial journalists and analysts—ever did. Trading volatilities were sky high, with historically unrelated markets moving in lock step, increasing the risk of systemic collapse.

In just a few years, regulators had lost what limited control they had over market intermediaries, market intermediaries had lost what limited control they had over corporate managers, and corporate managers had lost what limited control they had over employees. This loss-of-control daisy chain had led to exponential risk-taking at many companies, largely hidden from public view. Simply put, the appearance of control in financial markets was a fiction.
Full Text Reviews
Appeared in Publishers Weekly on 2003-02-10:
Partnoy's previous book, F.I.A.S.C.O., was an inside story of a Wall Street derivatives trader. It argued that recklessness and lack of regulation made derivatives trading (trading financial instruments that have no intrinsic value) a threat to the financial system. Turning from autobiography to history, this new work makes the same points by examining financial disasters caused by derivatives of the last 15 years. "Patient Zero" is Andy Krieger, whose $80 million mismarking of currency options embarrassed Bankers Trust in 1988. Partnoy profiles other derivatives abusers, too, including Nick Leeson, who bankrupted Barings Bank; Robert Citron, who did the same for Orange County; and Joseph Jett, whose "forward recon" trades helped end the independent existence of Kidder Peabody and Long Term Capital Management. These accounts of 20th-century disasters are neither original nor deep, but readers interested in the subject will be pleased to see the links among them. Taken together, common features emerge that are hard to see in detailed accounts of individual collapses. For example, Partnoy makes a revisionist case that credit rating agencies and federal regulators, including Alan Greenspan and Arthur Levitt, bear most of the blame. The author carries his story into mid-2002, evaluating Enron, WorldCom and Global Crossing. His analysis here is more original, reversing the popular perception by claiming Enron was a profitable company that should have survived, while WorldCom and Global Crossing had no economic substance. (Apr. 14) (c) Copyright PWxyz, LLC. All rights reserved
Appeared in Library Journal on 2002-12-01:
Why the economy is so unstable; from law professor Partnoy. (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
Reviews
This item was reviewed in:
Kirkus Reviews,
Library Journal, December 2002
Publishers Weekly, February 2003
Booklist, March 2003
Library Journal, March 2003
New York Times Book Review, April 2003
To find out how to look for other reviews, please see our guides to finding book reviews in the Sciences or Social Sciences and Humanities.
Summaries
Unpaid Annotation
The bestselling author of "F.I.A.S.C.O." presents a riveting chronicle of the rise of dangerous financial instruments and the growing crisis in American business. Partnoy recounts the rise of the trading instruments and corporate financial structures that now imperil the economic health of the country. Author speaking tour.
Main Description
The still-unfolding financial story is terrifying. One by one, major corporations such as Enron, Global Crossing, and Worldcom are imploding all around us, prey to a greed-driven culture and dubious or illegal corporate finance and accounting. Our financial system has suddenly reached a perilous crossroads. In a compelling and disturbing narrative, Frank Partnoy brings to bear all of his skills and experience as a securities attorney, financial analyst, law professor, and bestselling author to tell the story of the rise of the trading instruments and corporate financial structures that now imperil the economic health of the country. Starting in the mid-1980s with the introduction of the first proto-derivatives, and taking us through such high-profile disasters as Barings Bank and Long Term Capital Management, Partnoy traces a seamless progression to today's dangerous manipulations. He documents how each new level of financial risk and complexity obscured the sickness of the company in question, and required ever more ingenious deceptions. The story becomes more alarming with each passing day, but Partnoy offers a clear vision of how we can step back from the precipice.
Main Description
From the bestselling author ofF.I.A.S.C.O., a riveting chronicle of the rise of dangerous financial instruments and the growing crisis in American business The still-unfolding financial story is terrifying. One by one, major corporations such as Enron, Global Crossing, and Worldcom are imploding all around us, prey to a greed-driven culture and dubious or illegal corporate finance and accounting. Our financial system has suddenly reached a perilous crossroads. In a compelling and disturbing narrative, Frank Partnoy brings to bear all of his skills and experience as a securities attorney, financial analyst, law professor, and bestselling author to tell the story of the rise of the trading instruments and corporate financial structures that now imperil the economic health of the country. Starting in the mid-1980s with the introduction of the first proto-derivatives, and taking us through such high-profile disasters as Barings Bank and Long Term Capital Management, Partnoy traces a seamless progression to today's dangerous manipulations. He documents how each new level of financial risk and complexity obscured the sickness of the company in question, and required ever more ingenious deceptions. The story becomes more alarming with each passing day, but Partnoy offers a clear vision of how we can step back from the precipice.
Main Description
From the bestselling author of F.I.A.S.C.O. , a riveting chronicle of the rise of dangerous financial instruments and the growing crisis in American business The still-unfolding financial story is terrifying. One by one, major corporations such as Enron, Global Crossing, and Worldcom are imploding all around us, prey to a greed-driven culture and dubious or illegal corporate finance and accounting. Our financial system has suddenly reached a perilous crossroads. In a compelling and disturbing narrative, Frank Partnoy brings to bear all of his skills and experience as a securities attorney, financial analyst, law professor, and bestselling author to tell the story of the rise of the trading instruments and corporate financial structures that now imperil the economic health of the country. Starting in the mid-1980s with the introduction of the first proto-derivatives, and taking us through such high-profile disasters as Barings Bank and Long Term Capital Management, Partnoy traces a seamless progression to today's dangerous manipulations. He documents how each new level of financial risk and complexity obscured the sickness of the company in question, and required ever more ingenious deceptions. The story becomes more alarming with each passing day, but Partnoy offers a clear vision of how we can step back from the precipice.
Table of Contents
Introductionp. 1
Patient Zerop. 9
Monkeys on Their Backsp. 36
Wheat First Securitiesp. 62
Unreconciled Balancesp. 84
A New Breed of Speculatorp. 112
Morals of the Marketplacep. 141
Messages Receivedp. 187
The Domino Effectp. 227
The Last One to the Partyp. 267
The World's Greatest Companyp. 296
Hot Potatop. 350
Epiloguep. 393
Notesp. 413
Acknowledgmentsp. 447
Indexp. 449
Table of Contents provided by Blackwell. All Rights Reserved.

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