`Download ⇗ Why Wall Street Matters ✗ PDF eBook or Kindle ePUB free

This is the dumbest book I ve read in at least two years And I read Ben Carson s book I m not a huge Elizabeth Warren fan, but this is waaaaay too far in the other direction Basically, we don t need to regulate Wall Street if we make them personally liable for bank failures like back in the old days They re just so smart they won t cause any major problems We definitely never had major financial crises or depressions before big investment banks went public so no need to worry about that The amount of supporting evidence this guy provides for his arguments is so minimal, and in many cases completely absent, that this book would have a hard time getting above a D if it was turned in by a high schooler I get that he s trying to make this accessible, but I m not going to take your word for it. I think this is an important book for American liberals to read As someone with left leaning politics who was attracted to the economic policies of Bernie Sanders and Elizabeth Warren, I found this book informative and challenging.Cohan argues that the primary function of the global financial system Wall Street that is, moving capital from those who have it and want to invest it to those who need it to start businesses, invent things, etc is a necessity without which our modern society could not exist We have the flow of capital to thank for innovations that have changed the world and corporations that have deployed them.At the same time, he recognizes that there is a great deal wrong with how this core function of the financial system has been and still is being conducted in practice, especially in the years leading up to the financial crisis of 2008 He see the need for new regulations to stop the excesses and mismanagement that have characterized Wall Street, but does not support the rules and regulations that have been instituted by the Obama administration, and especially dislikes those proposed by Senators Sanders and Warren These regulations, he says, are motivated by anger and the urge to punish, and they curtail Wall Street s ability to perform its core, prosocial function while doing nothing to stop the greed and mismanagement of money.His proposal is to use regulation to change the incentive structure on Wall Street, to stop investment bankers from taking extravagant risks with other people s money, when they themselves stand to gain regardless of the outcome Wall Street bankers must stand to lose personally from risky practices, and stand to lose everything He also suggests, in agreement with Warren and Sanders this time, that criminal practices should be dealt with by the criminal justice system, something that was inexplicably absent in the aftermath of the 2008 crisis.In the end, I m not sure Cohan has completely convinced me When he was listing companies that would not be around if not for Wall Street, for example, I was not convinced that all of them had in fact made the world a better place He also seemd to have no expectation of ethical behavior from those working in finance, casting them almost as machines that will tend toward any financially incentivized behaviors Perhaps this is a wise assumption from a policy standpoint, but I cannot help but wonder if this portrayal of Wall Street acts as a license for bad behavior.The book did, however, lead me to rethink my basic stance toward the regulation of Wall Street I had been attracted to a punitive approach, but I think the forward looking, incentive correcting approach advocated by Cohan will probably beproductive and beneficial for society.I recommend this book to anyone who feels angry at Wall Street It is well worth the time. We Need To Return Wall Street to Days of Prudent Risk TakingA funny thing happened whilst I was reading WHY WALL STREET MATTERS I was partway through a chapter when I suddenly realized, Hmm, this guy seems to know what he s talking about I stopped reading, and read the author s bio At this point, I realized why the story seemed so vivid it s because the author has played a hands on role in the industry As I read , it became clear that William D Cohan is an expert in this field And of course, a best selling author as well Of course, that doesn t mean that the reader will agree with everything Cohan writes but the man knows what he is talking about, and writes with authority.The theme of this book is the big bank bailout why it happened, and what we should do to fix it Here s the essence of Cohan s argument The meltdown was due to a problem in INCENTIVES In years past, investment bankers had a personal stake in their firm s investments So, if the firm made a dumb bet, they would personally pay the price The risk taking was designed by its partners to be prudent In recent years, investment banks drastically changed This led to perverse incentives and risk taking that would never have occurred before Now, the bankers began to take huge risks with OTHER PEOPLE S MONEY The author likens this to Swinging for the fences Here s one nefarious example in 2015 alone thanks to Milken nearly 372 billion was raised globally for companies with less than stellar credit ratings So, yes, Cohan argues, we need to make changes in banking regulations, but not justrules we need to change the INCENTIVES so that bankers haveskin in the game Here s how Cohan sums it up The overarching necessity is to regulate Wall Street in such a way that preserves the things that it does right while also making sure that the people who work there have the correct incentives We should be careful, the author argues, before wrecking the world s most envied banking system, by applying a fix that has nothing to do with the crisis A really fascinating part of the book is the history of New York banking, and even the Wall I had no idea that Wall Street came from a real wall, composed of twelve foot high wooden logs that the Dutch inhabitants started building in April 1653, with the help of African slaves It was a massive wall almost half a mile.To my dismay, I also learned that the New Amsterdam later renamed New York colony was the largest slave holding city in the northern colonies For fifty one years, between 1711 and 1762, Wall Street housed the colony s well established slave market At any one time, fifty slaves could be found being bought and sold in the structure Alas, what a tragic part of New York history that we should know about I wish it wasn t true, but it is.The author spends much time explaining how and why the bailouts of 2008 happened Cohan reminds us that the government made money out of the bailout to the tune of 15.3 billion I confess I didn t know that The banks that received the billions of dollars in cash infusions from the government not only paid the loans back with interest but also paid billionsto the government WHY WALL STREET MATTERS is a well organized book, and a fairly easy read You don t have to be an economist to appreciate this book My favorite part is the history of Wall Street especially the infamous Wall I learned a lot about the history of our stock exchange, the U.S banking system and even the history of slave trading.I think Mr Cohan makes a lot of good points The author writes very clearly, and makes a strong case for changing the incentives for Wall Street investment banks, to remove the crazy incentives to swing for the fences I m afraid, however, that the public animus against Wall Street is currently so strong, that the author s arguments might well be overlooked.I thought this one sentence summed up the author s theme The fix for Wall Street should be directed at its compensation system, not at the functioning of Wall Street itself It s really as simple as that Advance Review Copy courtesy of the publisher. The first thing that struck me about this book was the title Why Wall Street Matters Who doesn t agree with that The Occupy Movement, however much author William D Cohan probably disagrees with their rhetoric, wouldn t for an instant say Wall Street doesn t matter Neither would Elizabeth Warren, John McCain or Bernie Sanders, politicians he routinely dismisses as bumbling and inept when it comes to financial reform Even Donald Trump would probably raise an eyebrow at the presumption that we need to be reminded about America s financial spinal column, as Hillary Clinton labeled it in one of her infamous Goldman Sachs speeches And yet, whoever this book is for apparently doesn t know that America is capitalist at least, in theory , or that Wall Street serves this capitalism.Let me go further and postulate that Cohan s ideal reader seems to be someone who hates Wall Street Really, really hates it Like, wants to see it pulled apart, brick by metaphorical brick Like, would be happy to have no big banks, no hedge funds, no securities trading His ideal reader has no idea what these things actually are, nor does his reader understand how important and necessary Wall Street really is to the 21st century Indeed, the way he tells it, criticism of Wall Street has simply gone too far We ve been demonizing them for years, he argues, and that s not going to get anything constructive done We need Wall Street, because otherwise, we d be totally screwed Senators Sanders and Warren haven t a clue when it comes to understanding Wall Street, he admonishes early in the book They, and the very people who call for breaking up the banks, wouldn t want to live in the world without those very banks, even if their rhetoric implies that they would Nor would the people they claim to speak for millions of middle class and working class Americans want to live in that world, either And if our most powerful elected leaders are woefully undereducated about the importance of Wall Street and the role that it play in keeping our economy humming, well, then, it s not the least bit surprising that the American people have virtually no clue about how Wall Street works either Cohan is quick to point out that he agrees with much of the progressive agenda, and his most forceful prescription for fixing Wall Street is to do away with the perverse incentives bankers have to take excessive, ill considered gambles with other people s money The bonus system has to go as well But most of the book is devoted to a brief but interesting history of Wall Street and financial crises and a contemptuous brushoff of Washington s regulatory actions Dodd Frank has got to go, he declares, because it is too cumbersome and thwarts economic growth Ditto efforts to reinstate Glass Steagall Ditto all the regulatory mechanisms and agents littering the financial sector Ditto higher capital requirements and efforts to break up the banks Cohan argues that this wouldn t prevent another crisis indeed, nothing can prevent another financial crisis, since there will be one somewhere at some point whether you obliterate Wall Street or not Besides, if we get rid of Wall Street, we d be miserable We wouldn t have iPhones and cheeseburgers today without it, and you like your iPhone, don t you Of course you do So enough with all of this nonsense I m not exaggerating the tone by much here Cohan keeps throwing up the straw man of the angry, disaffected but entirely ignorant hater and then switches to a glorification of modern day capitalism, over and over again It s frustrating because I don t think he means all of this the way it sounds it sounds like an apologia for the philosophy behind Wall Street s utterly boneheaded wrongdoings that tanked our economy His enthymemes are consistently one part Look, I hear you and two parts but still, we need these guys for the life we live For example, about halfway through the book, Cohan discusses the current political climate concerning the financial sector The 2008 bailouts of Wall Street left the American people fuming But should they have been so upset Would it have been better to have Wall Street collapse completely, with one leading firm after another cascading into bankruptcy and then somehow emerging in new forms, free from worthless assets and from financial obligations owed to others It s impossible, of course, to try to surmise what would have happenedbecause the Fed and the Treasury did bail out Wall Street in 2008 And by the way, though people may forget, that is exactly why the Federal Reserve was set up in the first place a century earlier to bail out Wall Street if needed and to save capitalism from itself, the seeds of its own destruction having been sown from the start Got that Good, because I have a few questions for Mr Cohan here 1 Do you think I have amnesia, or do you think I m a complete imbecile Like I didn t know about the bailout already Like you need to remind me that it actually happened two or three times in one paragraph 2 Arguing that the FDIC was set up for bailouts, so what are you so angry about completely misses the point The fire department was set up to put out fires If all my neighbors torch their homes smoking in bed and I get pissed off that the fire department has to keep coming to my neighborhood to put them all out, don t sit on your own stoop saying What are you so mad about That s what fire departments are for 3 Do you truly think Wall Street would have collasped, absent a bailout I only ask because a few chapters later, you report extensively on hedge fund manager John Fichthorn and transcribe his rage about Daniel Tarullo, the Fed s chief regulator, for two pages He told me that Tarullo and the other regulators at the Fed share a maniacal belief that the financial system would not have survived the 2008 financial crisis without a federal bailout, you tell us Ok, so did Fichthorn know you also think that Or do you actually agree with Fichthorn And if so, why did we bail them out in 2008 if we would have been fine anyway Which is it going to be the nanny state or the Wild West And does this line of questioning maybe help you understand that my anger over the bailouts might not be solely out of ignorance of the system itself It s often what Cohan doesn t say in this book that s eveninteresting He seems to think we, the public, need to be informed that banks lend capital out so others can invest it for businesses, home loans and the like, but he dismissively discusses MBSs and CDS instruments like we all studied it at Harvard Business already He bitches about what regulation has done to LIBOR, but doesn t say a word about the LIBOR interst rate fixing scandal which cost us all money in the long run He would have been much better off extending his discussion of the Federal Reserve, an entity that many Americans truly are ignorant of, and one which most of us myself included can t explain the function of satisfactorily, except Cohan cuts this discussion short and pivots to an exposition of several lunatics attempts to blow it up in the nineteenth and early twentieth centuries I guess we can all grasp the point there Watch out for anti Wall Street protestors, or it s your life If you go by this book, Wall Street has been crippled and under attack at least since the Great Recession all the regulation has led to slow growth at one point, Cohan hyperbolizes and claims zero growth, but let that pass , bankers too scared to lend capital and help ordinary people thrive or get mortgages, and maybe even a public too scared stupid to not vote for Donald Trump The solution, according to him, is to get off all the bankers backs and let them go to work, after we reform the incentive system, although and here, you can hear the thud as he drops the ball there doesn t seem to be any appetite for doing this in the industry, and our politicians can t be trusted to understand any of this anyway, and besides, you wouldn t want to live without Wall Street, would you IPhones, remember IPhones I call bullshit No one, absolutely no one, is arguing for dissolving the financial system No one credible, anyway No one is arguing we dismantle capitalism and take us back to the Stone Age, like he claims, or the Middle Ages, like one of his sources claims as if, absent mortgage backed securities, we d all go back to drinking out of our sewage system or something And if breaking up the big banks is totally pointless and won t do any good, Cohan is going to have to write a followup book arguing this pointeffectively As has been pointed out before, big banks are powerful banks and can stand against any government that has the audacity to demandresponsible behavior That s a problem, and it s one that he all but ignores here He also ignores the greater context of the twenty first century All this anger and outrage has not stemmed from total ignorance In too many parts of the book, Cohan s gaze is myopically towards Wall Street itself and the people who work in it many of whom, I don t doubt, are as honest and hardworking as he says they are , as opposed to the American public which he simultaneously attempts to reassure and patronize I didn t see any interviews with small time business owners or parents trying to put their kids through college where they d get a chance to explain this fear of investing he talks about, but I did see three pages towards end of the book devoted to comments from an unnamed Wall Street executive condemning regulation and arguing for like the third time in the book overall that the Fed s bailout of Wall Street was what the Fed was established to do, and that the government made a 15.3 billion profit on the bailout It s probably the only government program in history where it actually made a profit, this unnamed genius tells him Ok Great I mean, I m pretty sure government programs led to piddly things like jet planes, fiber optics and the Internet, but whatever, the bailout made Uncle Sam some cheddar, that s wonderful Still, let s not gloss over the fact that the Fed bailed out Wall Street It did not bail out at an equivalent level the homeowners and investors you know, people who got screwed by the crisis It was supposed to remember Neil Barofsky He gave it a go , but the minute there was talk of that 20 billion or so of TARP funds going to homeowners so they could stay in their homes and make their mortgage payments, boom, you had Rick Santelli s epic meltdown on CNBC and the birth of the Tea Party, which led to further polarization in our media and politics and which probably did help lead to the election of Donald Trump I personally lost tens of thousands of dollars in the crash, and over the years, as a result of owning property I ve been unable to sell, I don t even want to guess how muchI lost And I got off lucky other people lost homes, lost jobs, sometimes even lost their lives Meanwhile, the big banks are bigger than ever, they re richer than ever, their alumni were working in the White House under Obama and now evenso under Trump, nobody went to jail and by all accounts they re back to subprime loans, robosigning and God knows what else while the rest of us work our 50 hours a week with a wary eye on our earnings reports, dreaming of a retirement we probably won t be able to afford So I don t want to hear a goddam word about the poor Wall Street bankers so demonized by meddling politicians and regulators and how we re condemned to zero percent growth by intrusive policies America is still angry at Wall Street, and brushing off our concerns like this only makes us angrier We don t look at Dodd Frank and say Oh no, J.P Morgan needs to raiseliquidity than they want to I can t invest We look at our bank accounts and holdings and go Oh shit, what if those lunatics crash the economy again and decide not to do anything Time for Wall Street to do some public relations of its own and explain what it s doing to protect us from itself If the world of high finance is too opaque, as Cohan says, then let some sunlight in Yes, I like my iPhone I still hate Goldman Sachs Convince me I shouldn t. Claims we don t need to regulate Wall Street. A surprisingly decent foundation for understanding why financial institutions exist I will have to listen to it again to truly get the most out of it, and honestly, I wish it was longer, to give the subject matterspace for in depth analysis and explanation That being said, it s piqued my interest to do someself educating to understand the why to why does finance seem so distant and opaque. This will not address the argument made by Mr Cohan, but rather the formatting and content in general I do not take a position either way as to whether Wall Street Matters 1 The first 20% of the book can be lopped off, full stop I wonder if Mr Cohan or the editors said your argument is too short to sell for x, add some fluff content to make it longer Thus we have a several page description of the 1920 Wall Street bombing, down to describing limbs and body parts in the streets, the now familiar tale of how buildings there still have pockmarks, etc This is in addition to the description of anarchist attacks on bankers, etc This is, presumably, all to support the single statement that Animosity against Wall Street is nothing new paraphrased That s fine, I didn t need 10 pages of filler Just make the ing argument and stop wasting my time It s not even all that interesting, as I ve read it all before, as have most people with a basic working knowledge of WS history A history of the actual Wall Street, the wooden wall that protected the Dutch from Native American threat, etc All this can be scrapped I came to read an argument, and almost put the book down because, literally, the first 20% of the book is all fluff with no argument, or even an expository statement.2 Wall Street is both not defined, and at the same time defined in contradiction to an earlier definition The author asks What is Wall Street and then goes off on a tangent about how it may or may not be just the banks on Wall Street, and how no Wall Street banks still have Wall Street, and then doesn t answer it Later, by way of a definition, Cohan states that Warren Buffet came in as an outsider to bail out part of Wall Street a bank , when even later Cohan intimated that Buffet and his type of venture capital investment is part of Wall Street Poor writing and shabby editing.3 The title of the book is Why Wall Street Matters One would, then, expect an argument in the classical sense Halfway through the book, we hear how Wall Street has been the source of some crises, the solution to others, and has been falsely blamed for yetThis is good, but the author never explains how this ties in to his theorem This is just one example of writing without argument.4 Criticism without data Cohan uses phrases like obviously this is wrong, without explaining why This is a political speech tactic, where the speaker writer makes an observation, says that obviously this is wrong right, and lets the listener fill in their own reasons why, which, psychologically speaking, strengthens the listener s stance on the issue because the brain thinks it has come up with the reasons itself You can then, later in your narrative, give reasons why which, at this point in time, will now support the position the listener has taken Again, this is a tactic of speechwriters Sad to see it in a book Obviously this would be bad for the American economy, and that is the beginning and end of the argument 5 Criticism without data 2 Cohan notes that yes, there are behaviors that need to be curbed, and that we should continue to use existing law to prosecute and scare others into compliance Again, without taking sides in the argument, he says that there are behaviors that are permissible under the current set of laws that should not be, and then says that we should use current laws for enforcement, not install new ones Forgetting your position on the matter, this is the mark of a weakly thought out argument, and in fact is not a cogent argument at all.5 Criticism without data 3 Related to 2, Cohan notes again and again that the laws proposed in the 114th and 115th Congress would not have prevented the most recent financial crisis That may be Cohan does not, however, argue whether the proposed legislation would curb some other ill It s akin to saying the new laws on food safety would not have prevented the recent listeria outbreak, while not investigating whether it might help with salmonella in the same industry Again, forgetting where the reader stands on the legislation mentioned in the book, this is bad logic and a weak argument.I take no position on the arguments made here They are often incomplete or contradictory, so it makes little sense to do so.This is a poorly written book, content aside And a fifth of it need not even exist I would bet that, cut down to perhaps 10 15 pages and with another editor, this would make an engaging white paper As a book, it fails miserably. Why Wall Street MattersWhy Wall Street Matters by David Cohen functions as a beginners guide to how Wall Street works and why Wall Street is the way that it is It also functions dually as an attempt at easing the tension between big banks and the common person After the economical collapse of 2008 the public was furious at the risk taking of the banks and their fall back on tax payer dollars without inducing any consequence themselves To describe this Cohen uses a very down to earth method of story telling and and allowing the reader to understand Wall Street at its most basic core From the first national bank to the current day monstrous investment banks, Cohen skims over the necessities on which Wall Street has built its history upon Despite the implication of a heavily opinionated piece Cohen does a great job of allowing the reader to form their own opinion before he introduces his own ingenious solution Aside from the principles of his solution, his theories are very well warranted Although I may not fully agree with his solutions or causes of certain outcomes, I certainly respect them and was obliged to at least consider their veracity Why Wall Street Matters is a great book for anyone skeptical of the real importance of Wall Street and confirms the hopes of anyone still in good favor with Wall Street This book is not for the advanced business minded reader nor anyone with little interest in Wall Street I would give this book a 3.5 5. I like to fancy myself someone who reads across the political spectrum So a book called Why Wall Street Matters drew my interest when I saw it featured on a list of short books that pack big ideas Although the review was tepid or worse , I wanted to read an argument defending the much pilloried heart of finance in America In its pages, I found some interesting history but mostly a dearth of evidence or reporting on its central question Wall Street democratizes capital, creates liquidity in markets, and is the engine of economic growth Cohan also concedes that it isn t perfect But instead of diving into the nuances of the debate on regulation versus freedom, Cohan mostly repeats his attacks on people like Senator Elizabeth Warren and his accolades of Wall Street insiders This sort of thing, which reminded me of Cable News, is not very compelling to me I don t think any serious person contends that Wall Street is unnecessary But no serious person also contends that it works perfectly His final claim that the small but impactful change in incentive structures for Wall Street employees feels incomplete.Because it was a quick read, I didn t mind much finishing this book But I was left unimpressed with his take on the topic This is a massively interesting question This industry has an outsized impact on our politics It is given an unsatisfying treatment in this book. `Download ↠ Why Wall Street Matters ⇨ A Timely, Counterintuitive Defense Of Wall Street And The Big Banks As The Invisible Albeit Flawed Engines That Power Our Ideas, And Should Be Made To Work Better For All Of UsMaybe You Think The Banks Should Be Broken Up And The Bankers Should Be Held Accountable For The Financial Crisis InMaybe You Hate The Greed Of Wall Street But Know That It S Important To The Proper Functioning Of The World Economy Maybe You Don T Really Understand Wall Street, And Phrases Such As Credit Default Swap Make Your Eyes Glaze Over Maybe You Are Utterly Confused By The Fact That After Attacking Wall Street Mercilessly During His Campaign, Donald Trump Has Surrounded Himself With Wall Street Veterans But If You Like Your Smart Phone Or Your Widescreen TV, Your Car Or Your Morning Bacon, Your Pension Or YourK , Then Whether You Know It Or Not You Are A Fan Of Wall StreetWilliam D Cohan Is No Knee Jerk Advocate For Wall Street And The Big Banks He S One Of America S Most Respected Financial Journalists And The Progressive Bestselling Author Of House Of Cards He Has Long Been Critical Of The Bad Behavior That Plagued Much Of Wall Street In The Years Leading Up To TheFinancial Crisis, And Because He Spent Seventeen Years As An Investment Banker On Wall Street, He Is An Expert On Its Inner Workings As WellBut In Recent Years He S Become Alarmed By The Cheap Shots And Ceaseless Vitriol Directed At Wall Street S Bankers, Traders, And Executives The People Whose Job It Is To Provide Capital To Those Who Need It, The Grease That Keeps Our Economy Humming In This Brisk, No Nonsense Narrative, Cohan Reminds Us Of The Good These Institutions Do And The Dire Consequences For Us All If The Essential Role They Play In Making Our Lives Better Is Carelessly CurtailedPraise For William D Cohan Cohan Writes With An Insider S Knowledge Of The Workings Of Wall Street, A Reporter S Investigative Instincts And A Natural Storyteller S Narrative CommandThe New York Times Cohan Is One Of Our Most Able Financial JournalistsLos Angeles Times A Former Wall Street Man And A Talented Writer, Cohan Has The Rare Gift Not Only Of Understanding The Fiendishly Complicated Goings On, But Also Of Being Able To Explain Them In Terms The Lay Reader Can Grasp The Observer London