Since 2008, the whole world has become versed in Credit Default Swaps, Collateralised Debt Obligations and plethora of other Credit Derivatives but how much do we actually know about these "financial weapons of mass destruction". Gillian Tett's book uncovers the origins of these clever products and provides true insight into thier original purpose. The book, in essense, is the story of a team of young individuals, the Morgan Mafia, who set out to revolutionise how financial institutions manage thier risk whilst staying within regulatory guidelines.
To those not up on their Credit Derivative markets the findings will shock, appaul and sadden you as you read how the work of some the world financial elite has been dragged through the mud since thier ingenious inception in the 1990's.
There is no doubt, in my mind, that the first half of the book is in a different class to the second. Having read my fair share of books on the financial collapse, I have got to a point where I have heard many of the details before and the topic feels a little staid when compared to some of the more recent books I have read. However, Fool's Gold was written in 2008-2009 so I am potentially being a little harsh on the author.
At a number of points in the book, Tett dives into the world of Financial Regulation and the lobbying of both financial regulators and government leading up to the crisis. Although crucial to the story, and particularly relevant as the world cautiously waits for the Dodd Frank act to come into force, Tett drags her heels through what is essentially a mind numbing subject. At points, this really lets the book down as it breaks the readers rythm from the easy flow that Tett has worked so hard to build.
There is no doubt that Gillian Tett is a very credular author and her work at the FT continues to inspire and guide the minds of many. However, her first attempt at a financial masterpiece remains a few brush strokes short of the standard delivered by competing authors. If you are yet to read a book on the credit crunch, this would be a great read as it puts particularly complex subject matter into context whilst telling the story of greed and innovation with energy and vigour.