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8 September 2017 Financial Analysts Journal Book Review

The Weekend That Changed Wall Street: An Eyewitness Account (a review)

  1. Ronald L. Moy

This book is more than a recapitulation of the worst U.S. financial crisis since the Great Depression. It is also a portrayal of a broadcast journalist as she pieces together the facts of a breaking story and lines up the interviews to report it to her viewers.

In his last interview as U.S. Treasury Secretary, Henry Paulson confided in Maria Bartiromo during a commercial break, “In six months, you will understand why we did what we did.” At the time, Bartiromo was perplexed by the statement, but in the ensuing weeks, the meaning of Paulson’s remark became apparent. The government had spent more than $1 trillion in bailing out banks without revealing which institutions received the money, largely to hide Citigroup’s dire financial situation. Only a journalist who had established her credibility through long-term professional relationships with Paulson and other financial luminaries could have elicited such a comment.

Certain dates stand out as turning points in U.S. history: 4 July 1776, 7 December 1941, 11 September 2001. Another historic turning point began on 12 September 2008, when many of Wall Street’s top bankers were summoned to the Federal Reserve Bank of New York on that rainy Friday evening. For the average American, the start of that weekend holds no special significance. The events of the next two days, however, marked the beginning of a financial crisis that reverberated from Wall Street to Main Street and then to the entire world.

As the anchor of CNBC’s Closing Bell with Maria Bartiromo and from her appearance in the movie Wall Street: Money Never Sleeps, Bartiromo is perhaps the most recognizable financial journalist in the United States. Her prominent position has gained her unparalleled access to a broad array of top players in the financial markets. This access afforded her a unique perspective on the events of that historic weekend when Lehman Brothers failed, setting off a cascade of financial crises.

On that gloomy evening, the Fed and the U.S. Treasury unsuccessfully tried to broker a deal with major banks to save one of their competitors, Lehman Brothers. In The Weekend That Changed Wall Street: An Eyewitness Account, Bartiromo takes readers through the events as they occurred, making them feel as though they were there. Rather than cover the entire history of the crisis, she focuses on the fateful weekend, adding only as much historical information as necessary to tell her story.

Bartiromo does use several historical flashbacks to set the stage. In the first, she recounts a holiday party at the apartment of Blackstone Group CEO Stephen Schwarzman in December 2006, when many of the lions of Wall Street displayed sheer exuberance for the markets. Another flashback concerns interviews she conducted at the World Economic Forum in Davos, Switzerland. In those interviews, Bartiromo asked leading executives about the most important issues facing business. Surprisingly, she reports that four top U.S. executives viewed external factors as the source of greatest concern, even though the financial markets, as subsequently became clear, were close to meltdown. For example, Thomas Russo, vice chairman of Lehman Brothers, and Victor Chu, chairman of First Eastern Investment Group, viewed avian flu as the greatest threat. Even as late as January 2007, Bartiromo found David Rubenstein of the Carlyle Group voicing expectations for another great year.

Although numerous books have been written about the financial crisis, what sets Bartiromo’s apart is her access to the major figures as the crisis was emerging. Many of the other authors were able to interview the key players only months later. The passage of time can distort memories and dissipate much of the emotion and tension of a recalled event. Bartiromo interviewed the movers and shakers as the crisis was unfolding, when none of them knew how events would play out.

A key insight of the book is that Lehman Brothers CEO Richard Fuld was sure that a deal would emerge to save his firm. He clung to the hope that Bank of America would buy Lehman Brothers or that Korea Development Bank would make a sizable investment—either transaction might have averted the bankruptcy. In the end, however, Paulson’s unwillingness to guarantee Lehman Brothers’ bad assets prevented any deal from being consummated.

Unlike many authors of books critical of the actions taken by the banks and the government during the financial crisis, Bartiromo maintains her objectivity. Not until the final chapter, “Capitalism in the Balance,” does she offer her opinion on whether the bailout was necessary. Even then, her judgment is simply a one-sentence answer to a question posed by her friend Garry Kasparov, the former world chess champion.

The Weekend That Changed Wall Street is more than a recapitulation of one of the most significant financial crises in U.S. history. It is also a portrayal of a broadcast journalist as she pieces together the facts of a breaking story and lines up the interviews to report it to her viewers. The book is a quick and enjoyable read for anyone interested in Bartiromo’s eyewitness account of these historic events.


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