Roger LOWENSTEIN	Tess VIGELAND

Thursday, April 15, 2010

The End of Wall Street

Roger Lowenstein, Author and Bloomberg Columnist in conversation with Tess Vigeland, host of public radio's Marketplace Money
Co-Presented with KPCC

ROGER LOWENSTEIN is a best selling author and columnist for Bloomberg. He also writes for The New York Times Magazine. He is author of The End of Wall Street. His previous books include Buffet, When Genius Failed, Origins of the Crash and While America Aged. In 1979, he joined the Wall Street Journal as a staff reporter. From 1989-'91, he wrote the Journal's signature "Heard on the Street" stock market column. Later, he authored a new column for the Journal, "Intrinsic Value."

In The End of Wall Street Roger Lowenstein, author of When Genius Failed and Buffett, unfurls a gripping chronicle of the 2008 financial collapse. Lowenstein looks to the roots of the crisis to reveal how America yielded to the siren song of easy debt and speculative mortgages. He shatters the widespread belief that the crisis began or reached a critical mass only with the failure of Lehman Brothers; instead, he shows that American homeowners, banking and finance were in a numbing crisis for at least a year before the events of September 2008.

In Lowenstein’s telling, the crisis upended the central tenets of the new finance—notably, that Wall Street was capable of calibrating its risk and that markets were able to regulate themselves. As such illusions were exposed, Wall Street suffered its worst breakdown in modern times. Banks wouldn’t lend; companies could not refinance. Millions of Americans were threatened with losing their homes. The economy, when it fully caught Wall Street’s chill, re-trenched as it had not done since the Great Depression. Confidence in America’s market system, thought to have attained the pinnacle of laissez faire perfection, was shattered. The government interventions that followed evidenced both the failure of an ideology and the eclipse of Wall Street’s golden age.

His narrative begins with Angelo Mozilo, the Johnny Appleseed of subprime mortgages who spread toxic loans across the landscape. It moves on to the critical distinction (lost on Wall Street firms such as Lehman) between liquidity and capital, and to a damning explication of how rating agencies helped gift wrap suspect loans in the guise of triple-A paper and a takedown of the academic formulas that—once again—proved the ruin of investors and banks. The banks modeled future default rates (and everything else) as though history could provide the odds with scientific certainty—as precisely as in dice or cards. But markets--as the events of September 2008 made clear--are different from games of chance. This bitter lesson in the nature of risk ended the ideological reign of market infallibility, and closed the door on an era of unprecedented (and, as it turns out, unwarranted) optimism.

Drawing on 180 interviews, including sit-downs with top government officials and Wall Street CEOs. Lowenstein interweaves his analysis with profiles of banking CEOs such as Dick Fuld of Lehman and the Jamie Dimon of JPMorgan, of government officials from Hank Paulson to Ben Bernanke, and of a very few—notably, the mutual fund manager Bob Rodriguez—who sounded an early warning. He offers a trenchant look forward at the legacy of the bust and of the bailout.



Breakfast 7:45 A.M. TO 8:30 A.M.
Forum 8:30 A.M. TO 9:30 A.M.

Crawford Family Forum at KPCC, Pasadena
474 South Raymond Avenue Pasadena, CA 91105

Parking information • Free street parking west of Fair Oaks Avenue on Bellevue Drive • Free 2-hour parking on Raymond Ave. (strictly enforced) • Parking structure at the Del Mar Metro Station (at Del Mar and Raymond) • Parking lot at the Fillmore Metro Station (one block south of California Blvd. on Raymond Ave.

$20 RSVP by Wednesday, April 14 to: Ted Habte-Gabr at ted@druckerbusinessforum.org

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