Fatal Risk (eBook)

Roddy Boyd is an investigative reporter who has been uncovering financial market shenanigans for more than a decade. Most recently at Fortune magazine, he also worked at the New York Post's business desk, the New York Sun and Institutional Investor News, and has written for Slate's "The Big Money." In addition to founding the financial investigative reporting website TheFinancialInvestigator.com, he has worked on both the buy- and sell-sides of Wall Street.

Cast of Characters ix

Introduction 1

Chapter 1 The (Noncorrelated) Dream Team 7

Chapter 2 Who Dares, Wins 31

Chapter 3 The Man with the Plan 47

Chapter 4 Changes 77

Chapter 5 The Dirt Below 99

Chapter 6 War by Another Name 121

Chapter 7 The Kids Are Alright 149

Chapter 8 In the Shipping Business 181

Chapter 9 The Preservation Instinct 203

Chapter 10 The Down Staircase 235

Chapter 11 Midnight in September 251

Epilogue 291

Notes 313

Acknowledgments 335

Index 343

Fatal Risk: A Cautionary Tale of AIG's Corporate Suicideby Roddy Boyd has been longlisted for The FT & GoldmanSachs Business Book Of The Year Award 2011

Members of the seven strong judging panel will decide on ashortlist of up to six finalists in the middle ofSeptember.

'If there is a theme that links most of the 14 titleson the longlist..it is their authors' quest to work out howand why companies, governments and their leaders fail - andhow not to go wrong in the future'

"A vivid portrait of the giant insurer at the center of the 2008financial crisis."
(The Wall Street Journal)

"The best book of the crisis is Fatal Risk. This is a fabulousbook - but it deals with complex subjects without shying away fromtheir complexity and it assumes you have enough knowledge andintelligence to cope. . . This is the best book yet written aboutany specific episode of the crisis. Buy multiple copies. Give themto your friends. They will be grateful too."
(Bronte Capital)

"A sober work that appears to have been researched extremelythoroughly. . . more convincing on the mechanics of AIG's Suicidethan it is on any of the deeper motivations."
(The Financial Times)

"Through superb reporting, Boyd has written one of the financialcrisis genre's most important works."
(Bloomberg BusinessWeek)

"As Roddy Boyd demonstrates in his well-written study of AIG'sfall, it was the very solidity of the company's credit rating thatled it astray. Painstakingly built over the course of 40 years byan army veteran, Hank Greenberg, AIG was the ideal counterparty forWall Street. . . For some, the demise of AIG was not the suicidedescribed in the book's title, but an act of murder by Goldman. MrBoyd argues that the investment bank was acting only as any prudentcounterparty would. But the author's analysis is unlikely to dentthe conviction of conspiracy theorists that AIG was rescued by HankPaulson, the former Goldman chief executive turned treasurysecretary, to prop up Goldman." (The Economist)

"Engaging and balanced account . . . Many books on the financialmeltdown that began in 2007 treat AIG as a plot point in a widerdrama. Yet valuable lessons can be gleaned from the narroweraccount that Boyd lays out here -- lessons about theresponsibilities of leaders and regulators as well as the hazardsof financial engineering. . . The story of AIG's demise has manymoving pieces, large and small, which Boyd meshes into a smoothnarrative. . . Boyd is good with dialogue and knows how to keep thestory going. His reporting is thorough and fair, even when it comesto Timothy F. Geithner's risible assertions that it wasn't theFederal Reserve's job to pop bubbles."
(Bloomberg)

The best book on the financial crisis, and . . . favorite pieceof non-fiction work since Michael Lewis' The Big Short. . . Thereporting here is incredible."
(Distressed Debt Investing)

"A 10 best finance book.
Does the ongoing financial turmoil leave you scratching your head?Worry not, here's our pick of the finest - and most readable -books about Big Money..."
(The Independent)

'Fatal Risk is must reading for market insiders, investors,business leaders, and anyone who's wondered what really happened in2008.' (Hereisthecity.com, April 2011).

'researched extremely thoroughly' (Financial Times,April 2011).

'...a vivid portrait of the giant -insurer at thecenter of the 2008 financial crisis.' (Wall Street JournalEurope, April 2011).

'A cautionary tale of corporate hubris.' (EthicalCorporation Magazine, May 2011).

'...Boyd is good with dialogue and knows how to keepthe story going'. (Bloomberg.com, June2011).