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 enlarge | Authors: Paul Muolo, Mathew Padilla
Publisher: Wiley
Category: Book
List Price: $27.95
Buy New: $15.51
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Rating:  27 reviews
Sales Rank: 10880
Media: Hardcover
Number Of Items: 1
Pages: 352
Shipping Weight (lbs): 1.2
Dimensions (in): 9.1 x 6.3 x 1.2
ISBN: 0470292776
Dewey Decimal Number: 332.720973
EAN: 9780470292778
ASIN: 0470292776
Publication Date: July 8, 2008
Availability: Usually ships in 1-2 business days
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| Customer Reviews:
 An eye-opening and clearly written report July 23, 2008
3 out of 3 found this review helpful
We can better understand our mortgage and financial crisis by understanding human error. Muolo's and Padilla's story unfolds from the point of view of the actual participants. They show us that what we thought was a vibrant financial system was actually a flimsy stack of cards created by irresponsible people, so that when those at the bottom, the borrowers, stopped paying their mortgages, the house of cards collapsed.
Who's to blame? Everyone, especially the proponents of deregulation.
Who are the biggest losers? Taxpayers, who will bail out those who are deregulated.
 Financial Deregulation and Privatization leads to Speculation and Securitization which leads to Recession July 23, 2008
10 out of 12 found this review helpful
The authors of this book present a detailed study of the nexus that existed between the unregulated(the Securities and Exchange Commission(SEC)hasn't been doing its regulatory job ever since Bill Casey left) Wall Street investment banks(Bear Stearns,Merrill Lynch,Morgan Stanley,Goldman Sachs,Lehman Brothers,Credit Suisse,Deutsche bank,etc.),commercial banks(Free market believers Alan Greenspan and Ben Bernanke,Milton Friedman's best student,were supposed to be regulating the commercial bankers when they were chairman of the Federal Reserve Board.They were doing nothing of the sort because they believed that the financial markets would regulate themselves)like Wachovia and Bank of America,Savings and Loans like Washington Mutual,mortgage brokers, bond rating agencies, underwriters ,and mortgage lenders like Mozilo's Countrywide, were able to peddle some 6 trillion dollars worth of highly speculative and extremely risky bonds backed by sub prime mortgages all over the globe .It provides another view into this problem that is similar to the very recent books by Morris(The Trillion Dollar Meltdown)and Phillips
(Bad Money).Warren Brussee's 2004 book,though mistitled,is the first full scale treatment of the sub prime loan problem.
I have deducted 1 star because the authors do not provide any historical overview that would enable the reader to see that this problem is a systemic one that repeatedly occurs over and over again throughout history whenever financial ,short run, profit maximizing(sales maximizing)companies are allowed to engage in speculative activity that is financed by the banks themselves.It is the private ,profit maximizing commercial banking system that supplies the loans that enable operators like Mozilo to leverage their debt position in the financial markets and create bubbles.These bubbles are then pumped up and inflated by the banks.This leads to manias(crowd and herd cascading impacts),panics,crashes,and recessions,as well as inflation and/or stagflation.
Adam Smith warned about this in his The Wealth of Nations(1776;see pp.339-340 of The Modern Library(Cannan)edition for Smith's conclusions.His entire discuusion of banking on pp.250-340 is the best ever written).The purpose of an independent central bank is to PREVENT the private commercial bankers from making loans to projectors(the speculators and rentiers of Keynes's General Theory(1936)) ,imprudent risk takers,and prodigals.Loans are to be made only to the sober people who will use the loans to create businesses and jobs,as opposed to speculation and bubbles that must eventually collapse, creating great social costs for society as a whole.
An entire stealth banking system has come into existence over the last 30 years since Jimmy Carter started his ill advised deregulation and privatization policies of the financial system.These policies were speeded up during the Reagan -Bush administration .This book exposes what the inevitable result of such a deregulated financial system ends up requiring-massive tax payer bailouts and/or special loans made available to speculator bankers at very low rates of interest .
Two Thumbs Way Up July 22, 2008
1 out of 3 found this review helpful
I started reading Chain of Blame in mid-July 2008, which makes it among close to ten books on the broader subject so far on my night table. Muolo and Padilla are superb investigative reporters, and have a wonderful way of bringing both the story and characters to life. After reading chapter one, I only have this to say about Angelo Mozilo (to borrow a colorful descriptive phrase Mozilo was fond of using): "Angelo did not know what the "F" he was doing or talking about when it came to managing Countrywide." A wonderfully written opening chapter, two thumbs way up.
Sorting it all Out July 15, 2008
5 out of 7 found this review helpful
A new book documents the house of financial cards that continues to come tumbling down all around us in the mortgage and real estate industries.
Chain of Blame, co-authored by Paul Muolo and Orange County Register reporter Matthew Padilla, offers a comprehensive view of the mortgage debacle but concentrates on the subprime lenders and their Wall Street allies (and in some cases, owners) who pooled and packaged subprime loans into securities without due care for credit quality, greedily booking billions in fees while hoping that real estate prices would accelerate upwards forever to make up for their lack of underwriting.
The book's analysis of the mortgage mess shows how the contagion didn't just halt at our own borders, like the savings and loan scandal of a generation ago did, but flared up worldwide through the overseas sale of poorly-understood and poorly-underwritten collateralized debt obligations containing the worst tranches of a bad book of business.
Chain of Blame also lucidly points out how the creative financing of many lenders, which led to an over-reliance on interest-only and payment-option mortgages, fed the superheated real estate market by putting thousands of new borrowers into the market, creating a demand that sent RE prices zooming to unsustainable increases of up to 33% a year in some markets.
An Indispensable Read July 13, 2008
2 out of 6 found this review helpful
Whether you agree with the authors' conclusions or not, you cannot really understand how we got into our current financial crisis without reading this book.
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